Fletcher Building: Moving in the right direction but...

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Fletcher Building: Moving in the right direction but...

Fletcher Building UBS Research

FBU Forecast changes

We have updated our FY26 EBIT forecasts to take into account 4Q26 volumes, trading

update and industry feedback. FY26 EBIT has increased from $377m to $400m which is

in line with guidance of $400m - $403m. We have made no changes to our FY27

EBIT forecast which is ~10% below Visible Alpha consensus and assumes flattish trading

YoY (ex one off property gains and benefit of sale of loss making businesses).

Key changes include:

1. Light Building products (~50% of EBIT): We have increased our FY26 volumes

for Iplex and Comfortech (insulation) and better than expected volume recovery in

Australia (with some market share gains). This has resulted in FY26 EBIT forecast

increasing from $223m to $226m.

2. Heavy building products (~25% of EBIT): No major changes. Volumes are still

flat to down compared to PCP. For example Winstone Aggregates volumes were

5% below 4Q25 as renewal of road maintenance contacts were delayed and some

large non resi projects have taken longer to mobilise.

3. Residential and Development: FBU took 220 residential and apartment units to

profit in 4Q26 (cf UBSe 84 estimate).We have increased our FY26 EBIT from $26m

to $33m with a more 2H26 skew than we forecast previously.

4. Asset sales (profit on sale): We have increased our profit on sale from property

from $40m to $52m as per guidance. The main changes relate to the profit on sale

of Cheltenham propery in Australia: (i) $9m of costs reclassified as Sig items for

Cheltenham property; and (ii) $3m for lower costs associated with the sale.

5. Asset sales cash received: All three property sales will have cash received in

FY26. Previously we assumed 50% of the South Australian property sale proceeds