Fletcher To Benefit As New Zealand Housing Stages Swift Coronavirus Recovery; Lifting FVE by 6%

While we’d anticipated Fletcher would benefit from an inevitable recovery in the New Zealand, or NZ, housing market, the rebound has arrived sooner than we’d previously anticipated. With the cyclical earnings recovery within Fletcher’s NZ building products, distribution, concrete and construction businesses--which contribute a cumulative 80% of group EBIT excluding corporate overheads--in the first half of fiscal 2021 tracking materially ahead of our full-year expectations, we increase our fiscal 2021 EBIT estimate by a sizeable 25% to NZD 614 million. Our upwardly revised fiscal 2021 EBIT estimate sits near the lower end of Fletcher’s full-year fiscal 2021 EBIT guidance range of NZD 610 million to NZD 660 million.