Under pressure

Fletcher Building's surprise $110 million earnings down-grade has left unhappy investors questioning whether chief executive Mark Adamson should shoulder more of the blame.

The down-grade came less than a month after its half year result in which the company pointed to a one-off loss estimated to be worth around $30 million by one analyst.

Market players questioned why the company did not know about the bigger losses before then as there had been talk in the market for several months about issues.


Fletcher's has said it only found out the night before a trading halt was put in place.

One market player said management should have known about issues far earlier.

"It's very surprising that they were saying that they had no issues at the time of their result just a few weeks earlier when rumours were rife in the building sector.

"It raises questions both about management systems and the culture."

Adamson, who has a reputation for ruthless job-cutting, has been chief executive since 2012.

Castle Point fund manager Stephen Bennie said he would be very surprised if a performance review of the chief executive is not on the agenda at Fletcher's next board meeting.

"The necessary oversight has been lacking and this needs to be addressed and understood by the board."

Asked if the board continued to have confidence in Adamson a spokeswoman said Fletcher Building's media policy was to not comment on individual employment matters.

Regulators respond

The stock exchange has confirmed it is "considering matters" relating to the disclosures made by Fletcher Building on March 20.

But it isn't saying anything more about what exactly it is considering.

An NZX spokeswoman said: "As a general policy, NZX does not comment publicly on matters currently under consideration.

"This to ensure the integrity of our markets, and in the interests of due process to encourage open and frank communication between the parties."

The spokeswoman said it was also looking at the trading ahead of the price sensitive announcements.

"Separately, and in accordance with NZX's routine surveillance processes, trading ahead of such price sensitive announcements will be assessed in detail. NZX has no further comment on the matter at this time."

Market watchdog the Financial Markets Authority said it had received one letter from the public relating to the Fletcher Building announcement.

"We do not have any open inquiries into these matters but we are in dialogue with the NZX which holds the frontline responsibility for monitoring and reviewing continuous disclosure issues."

A Fletcher Building spokeswoman said as of yesterday Fletcher Building had not been contacted by the NZX with a request for information.

"Fletcher Building would fully comply with any request for information from the NZX."

Telco Tussle

It seems Vodafone might have stuck one on rival Spark who went on the offensive during the recent failed Vodafone and Sky TV merger talks.

Vodafone this week revealed it had reached a deal to buy a 70 per cent stake in TeamTalk's rural broadband and satellite business BayCity Communications for $10 million cash.

Spark has made a takeover offer for TeamTalk which TeamTalk has rebuffed strongly.

But Castle Point fund manager Stephen Bennie said the deal would effectively scupper Spark's takeover bid.

"A little spot of revenge for the interference that Spark ran during the Vodafone/Sky TV merger."

TeamTalk shares have risen significantly in the last week but yesterday closed down 16c at 91c.