Businesses which formerly fell under the ‘Australia’ umbrella will now be integrated into 2 new trans-Tasman divisions: light building products – in which Oliveri Australia, Iplex Australia, Laminex Australia and Fletcher Insulation will join Fletcher Buildings New Zealand products business – and heavy building materials – which will bring together Fletcher’s concrete-related businesses with Australia’s Stramit and the New Zealand steel businesses.

Fletcher’s other 3 divisions – Distribution, Construction and Residential and Development – will remain unchanged.

Former Chief executive of the Concrete Division, Thornton Williams, will lead the Heavy Building Materials division, while former chief executive of New Zealand Building Products – Hamish McBeath – will head up the new Light Building Products division.

And the restructuring has resulted in another executive shift: with former chief executive of the Australia division, Gareth O’Reilly, set to leave Fletcher.

Alongside these changes, Fletcher is aiming to bank approximately $15 million worth of savings in the short term through a further review of the company’s corporate structure. This will add to the approximately $200M of cost out targeted for the 2025 fiscal year.

Managing director Andrew Reding said these changes would drive improvements and growth at the company.

“Fletcher Building is strategically positioned in the growing markets of Australia and New Zealand, where our businesses target leadership in segments with attractive long-term fundamentals,” he said.

“Our operating companies are deeply embedded in their local markets, giving them strong insight into customer needs, agility in decision-making, and the ability to respond quickly tochanging market dynamics.

“We want to leverage these strengths, evolving Fletcher Building into a more decentralised, high-performing portfolio company.”

Fletcher shares have been trading at $3.13.

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The deal with US decking company Azek, has seen a swift and heated backlash from major investors, including AustralianSuper and UniSuper, after James Hardie issued 35% more shares and raised the prospect of migrating its primary listing to the New York Stock Exchange.

The crisis was exacerbated amid a weakened US housing market, elevating investor concerns about the timing and extraordinary price which was set at a 37% premium to Azek’s share price.

Analysts and fund managers lashed James Hardie for paying too much and ratcheting up its exposure to excessive financial risk amid a slowing US economy.

The ASX says its decision aligned wth established legal frameworks, aimed at reducing deal costs and execution risks.

But amid escalating pressure from investors like Aware Super, HESTA, and Fidelity Australia, ASX CEO Helen Lofthouse says the exchange would review the appropriateness of such waivers.

The review will update a 2017 analysis of shareholder approval thresholds for mergers and acquisitions, with further consultation planned.

Notwithstanding the review, James Hardie’s merger will close under existing waivers.

Investors reactions highlight their view that the acquisition unnecessarily exposes shareholders to significant cyclical risks, with US homebuilders reporting declining demand and rising construction costs.

Fund managers underscored James Hardie may be subject to additional earnings downgrades and potential capital raisings in the event the US housing market deteriorates.

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The companies have entered a definitive agreement in which James Hardie will take on AZEK with the total transaction value – in both cash and shares – also encompassing AZEK’s net debt, which was $386 million at the end of 2024.

The terms of the merger will see James Hardie shareholders hold around 74% of the resulting entity; AZEK shareholders will own 26% when the deal goes through.

The latter will receive $26.45 in cash plus 1.034 ordinary James Hardie shares to be listed on the NYSE for each share of AZEK common stock they own.

It’s anticipated the combination of the two companies will facilitate a growth platform built around exterior and outdoor living building products, with material replacement as a major factor, with this underpinned by AZEK’s reputation for low-maintenance and environmentally sustainable products.

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The merger is also expected to produce, at minimum, $350 million additional annual EBITDA.

James Hardie has been trading at $46.80 this morning.

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The material provided in this article is for information only and should not be treated as investment advice. Viewers are encouraged to conduct their own research and consult with a certified financial advisor before making any investment decisions. For full disclaimer information, please click here.

The conglomerate often known as Soul Patts – which also runs TPG Telecom and Pengana Capital – said its total dividend for FY2024 was up 9.2% at 95cps (cents per share), from 87 cps in the prior corresponding period.

Managing director and CEO Todd Barlow said the company had successfully ticked off three key goals: increasing cash generation, growing its portfolio and managing investment risk, during FY2024.

“Our strategy of long-term commitment to building value, strength in conviction when making investment decisions, and unconstrained mandate to invest where we can extract the highest quality returns, continues to deliver for our shareholders,” he said.

Soul Patts’ net cash flow was up 10.3% to $468 million, as a result of growing cash generation from private equity, emerging companies and credit portfolios within the conglomerate’s umbrella.

Meanwhile, Brickworks Ltd (ASX:BKW) said its statutory profit in the 2024 fiscal year had slumped 130% to a loss of $119 million, mainly influenced by property sales and non-cash property revaluations, with these registering a loss of $231 million during the year.

Also significant was the impact of non-cash building products, which fell by $135 million (post-tax) during FY2024.

The company’s full year dividend was 67 cents fully franked, up 3%.

Chairman Robert Milner said economic headwinds around the world were having an impact on Brickworks’ bottom line.

“The significant property devaluation was reported in the first half, and reflects capitalisation rate expansion across the industry, in response to higher interest rates,” he said.

“Pleasingly, conditions have stabilised across the property industry over the past six months, as many central banks around the world begin to pivot towards expansionary monetary policy.

“The Building Products impairment was recorded in the second half, and primarily relates to Austral Masonry and Brickworks North America. Both of these businesses have been impacted over the past six months by a deterioration in building activity across key markets.”

It appears that Brickworks’ results were not as problematic to investors as they appeared on the surface, with the company’s stock rising on Thursday. At 13:45 AEST, Brickworks shares were trading at $28.61 – a rise of 7.56% since the market opened, while Washington H Soul Pattinson & Company was $34.20 – a rise of 0.68%.

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Mr Sladen argues there’s room for growth for the group that recently bought Steelmasters and also has a range of stores across Australia and New Zealand including Konnect Fastening Systems, Nubco, Fraser Coast Bolts, Artia Cabinet Hardware Systems and NZ Plank Hire.

CYG has been trading around $1.43 today.

Talk Ya Book was created by Chris Judd in 2019 as a show where fund managers could share their highest conviction investment idea but more importantly showcase their investment framework to the public.

In 2023, Chris joined the people he interviews in the world of funds management by creating the Cerutty Macro Fund. Chris is the founder and portfolio manager of the fund which looks to invest in long term, secular, macro trends.

Disclaimer: Juddcorp Pty Ltd ACN 635 629 631 is a corporate authorised representative (CAR) (CAR Number 1300536) of Boutique Capital Pty Ltd ACN 621 697 621 AFSL 508011.

The material provided in this article is for information only and should not be treated as investment advice. Viewers are encouraged to conduct their own research and consult with a certified financial advisor before making any investment decisions. For full disclaimer information, please click here.

Chief analyst Dale Gillham and co-host senior analyst Filip Tortevski tip that if it breaks through the $40 mark, trade could head towards an all-time high.

ARB was trading above $38.50 yesterday (July 8, 2024).

The ‘Proceed with Caution’ stock is crop protection (fungicides, herbicides, insecticides) and seed technologies company, Nufarm (ASX:NUF). Nufarm’s half yearly results posted in March were considerably lower than the previous corresponding period.

It has been trading just above $4.50.

The ‘not hot’ pick is NZ construction company, Fletcher Building (ASX:FBU) which has seen its share price already down nearly 50% over the past year. It was trading at $2.64 yesterday).

Dale Gillham is Chief Analyst at Wealth Within and international bestselling author of How to Beat the Managed Funds by 20%. He is also the author of Accelerate Your Wealth—It’s Your Money, Your Choice, which is available in bookstores and online at www.wealthwithin.com.au

Disclaimer: While Wealth Within holds an Australian Financial Services License (AFSL:226347) the information featured in this program is general in nature and therefore should not be relied upon. Before making any investment decisions, you should consult a licensed professional who can advise whether your investment decisions are appropriate for you.

The material provided in this article is for information only and should not be treated as investment advice. Viewers are encouraged to conduct their own research and consult with a certified financial advisor before making any investment decisions. For full disclaimer information, please click here.

WA is leading the nation with dwelling approvals up 11 per cent, followed by Queensland which saw a 10.7 per cent increase and New South Wales 9.6 per cent.

However, Australian Bureau of Statistics (ABS) Building Approvals data today showed approvals this financial year to be well down – more than 10,500 down – from the same time last year, with 55,029 approvals from July to October this year.  

ABS head of construction statistics, Daniel Rossi said approvals were low this financial year.

The Real Estate sector traded down more than one per cent after the data was released today.

“Approvals for private sector dwellings excluding houses increased 19.5 per cent, following a 3.4 per cent fall in September,” Mr Rossi said.

“Approvals for private sector houses rose 2.2 per cent, following a 4.7 per cent September decrease.

“Despite the monthly increase, total dwellings approved have been low this financial year, in original terms, 55,029 dwellings were approved between July and October in 2023, compared with 65,599 over the same period in 2022.”

Some states and territories were down, dwelling approvals were down 14.4 per cent in Tasmania, 7.2 per cent in South Australia and 1.4 per cent in Victoria.

The value of new residential building rose 8.9 per cent to $6.36 billion, while the value of non-residential building values rose 6.2 per cent to $5.91 billion, rebounding from a 7.6 per cent fall in September.

Master Builders Australia chief executive officer Denita Wawn expressed caution, noting that rising interest rate could erode the positive gains.

She called for sustained momentum, stating that over the calendar year to date, only 166,236 homes had been approved, well short of the 200,000 homes required.

“Achieving the 1.2 million new homes in five years as envisaged under the Housing Accord will be a huge challenge,” she said.

The organisation’s chief economist Shane Garrett said the total number of new home building approvals rose to 14,223 in seasonally-adjusted terms during October.

“This was 7.5 per cent up on the previous month and represents the highest result since May,” he said.

“October’s solid gain came in the wake of the four-month pause in RBA interest rate hikes.

“During October, there was a particularly large increase in the volume of higher density home building approvals (+19.5 per cent).

“This is important because the rental market is currently in desperate need of more medium and high-density homes.

“The shortage of rental accommodation recently drove rental price inflation to its fastest pace in almost 15 years.

“ Delivering more increases in higher density housing output will help to further dilute rental market pressures.

“New detached house approvals saw modest growth of +2.2 per cent during October.

“However, activity on the detached housing side of the market remains at a low ebb due to development-ready land shortages and the detrimental effect of interest increases.”

In addition to building approvals, the ABS released new capital expenditure data today.

Private new capex rose 0.6 per cent in the September quarter (seasonally adjusted, chain volume measures) to be 10.7 per cent higher than a year ago, with a 0.7 per cent increase in capex for buildings and structures in Australia.

The highest capital expenditure growth was in the mining sector, which saw a 5.6 per cent rise.

ABS head of business statistics Robert Ewing said the mining industry was the main driver.

“This was offset by a fall in non-mining industries, down 1.3 per cent after large rises in the previous four quarters,” he said.

“Capex was up 0.5 per cent for new equipment and machinery and 0.7 per cent for buildings and structures.

“The increase in building and structures investments was driven by mining, up 5.4 per cent. This industry raised its spending on iron-ore projects and battery-related mineral developments. It was offset by a fall in non-mining industries, down 2.2 per cent.

“The construction industry was the largest contributor to the rise in equipment and machinery capex. It grew by 15 per cent as supply-chain disruptions continued to ease.

“This allowed businesses to take delivery of new vehicles and heavy machinery,” Mr Ewing said.

Western Australia had the largest rise, up 7.5 per cent in the September quarter. This was offset by a large fall in Queensland, down 10.8 per cent in the wake of large rises in the March and June quarters.

Western Australia led overall growth (24 per cent) followed by Victoria (20.1 per cent).

“Growth in Western Australia was dominated by the mining industry, while growth in Victoria reflects a continuing recovery from steep declines during the pandemic,” Mr Ewing said.

Figures released today also include updated expectations of planned capital expenditure for the financial year. Businesses revised up their expectations by 8.5 per cent (in current prices) since the last estimate three months ago.

“The strength in planned capital investment shows that businesses expect continued growth in new capital expenditure over the rest of this financial year,” Mr Ewing said.

“The information media and telecommunications industry had a particularly large rise based on planned investment in new data centres.”

However, Building Approvals data from the Australian Bureau of Statistics (ABS) today showed approvals this financial year were still down more than 10,500 from the same time last year, with just over 55,000 approvals from July to October. WA is leading the nation with dwelling approvals up 11 per cent.

The ASX 200 has traded marginally up – by just .15 per cent today – industrials stocks have been the best performing, adding .77 per cent, whilst utilities have been struggling, losing 1.36 per cent.

Today’s new ASX listing Freedom Care Group Holdings (ASX:FCG) has been trading flat at 20 cents.

The company was previously Resource Generation, which was placed into voluntary administration in mid-2021 when it failed to raise funding for a South African coal mine.

Resource Generation has bought Western Sydney-based Freedom Care Corporation in a scrip deal and has a new identity to start providing NDIS services.

It raised $3.2 million with 20-cent shares through its IPO.

Origin Energy (ASX:ORG) has been down about 2 percent after the company’s Board ruled the revised takeover bid by a Brookfield-led North American consortium “not in the best interests of Origin or its shareholders.” 

The board argued the new proposal was incomplete and didn’t provide sufficient certainty for Origin shareholders.

ORG has been trading at $8.22. 

Augustus Minerals (ASX:AUG) has gained more than 9 percent at times throughout the session, on finding a large lithium soil anomaly at the Peak Bore prospect in its Ti-Tree Project in Western Australia.

The soil samples collected at a spacing of 100 metres by 400 metres confirmed the presence of lithium oxide exceeding 100 parts per million and rubidium at up to 400 parts per million.

The AUG technical team is already working on exploration programs for 2024 and will use these findings to redefine priorities in the Gascoyne region.

AUG last traded at 11.5 cents.

Little Green Pharma (ASX:LGP) has added about 2 percent on its half-yearly results to the end of September. Revenue from ordinary cannabis activities is up 37 per cent to more than $12.5 million.

The company ended the quarter with an adjusted EBITDA up 112 per cent from a loss of $5.9 million to positive $700,000. 

LGP also decreased its debt by 72 per cent to just over $2 million.

LGP has been trading at 12.2 cents. 

And Dreadnought Resources (ASX:DRE) is up 4.5 per cent on upgrading its resource estimate at its Yin Rare Earth Elements Ironstone Complex within the company’s Mangaroon Project in the Gascoyne region of Western Australia. 

The JORC Mineral Resource at Yin – which includes significant neodymium and praseodymium – now totals 29.98 million tonnes at 1.04 per cent total rare earths oxide. The Mangaroon resource is up to 40.82Mt at 1.03 per cent TREO. 

DRE has been trading at 3.4 cents.