Anne Gibson

Anne Gibson is the Property editor of the NZ Herald

Fletcher has eye on mega contracts

Fletcher has bucked a profit downgrade trend for the sector, pleasing one research firm. Photo / File
Fletcher has bucked a profit downgrade trend for the sector, pleasing one research firm. Photo / File

Fletcher Building is aiming to win contracts worth billions, it has revealed in an investor presentation.

Graham Darlow, chief executive of the construction division, outlined how the company hoped to score some huge deals, such as the $900 million Transmission Gully job, $900 million Auckland central city rail link and the $650 million Christchurch Hospital project.

"Large projects are getting bigger," he said, telling of more interest from international firms, how there was a strong push for more homes in Christchurch and Auckland, and that transport and water projects were strong.

Fletcher has bucked a profit downgrade trend for the sector, pleasing one research firm.

Morningstar described New Zealand's biggest listed company as "a good business operating in a difficult sector" and expressed satisfaction at confirmation of the $560 million-$610 million ebit guidance given at an investor briefing.

New Zealand continued to benefit from more housing approvals as well as the massive pipeline of infrastructure and reconstruction work in Christchurch, Morningstar said.

"Cost reductions remain the focus in Australia with both the residential and commercial construction markets still soft."

However, Morningstar said long-term earning potential of the business had been overestimated and it had a reduce tag on the stock.

Fletcher targets

*Transmission Gully PPP $900m
*Auckland City Rail Link $900m
*Christchurch Hospital $650m
*Christchurch Commercial Precinct $400m
*SkyCity International Convention Centre $310m

- NZ Herald

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