1 00:00:00,080 --> 00:00:03,920 Speaker 1: Jeremy Hutton, Milford Aidt Management is with me, Hi, Jeremy. 2 00:00:04,000 --> 00:00:04,760 Speaker 2: Good evening, Heather. 3 00:00:05,040 --> 00:00:07,080 Speaker 1: Right, so we've had a bunch of results. Let's start 4 00:00:07,080 --> 00:00:10,800 Speaker 1: with Fletcher Building. What's the market reaction being to this announcement. 5 00:00:12,680 --> 00:00:15,720 Speaker 2: Yeah, it was a reasonably subdued reaction today from the 6 00:00:15,720 --> 00:00:18,759 Speaker 2: market for Fletcher Building. The share price was largely flat. 7 00:00:19,840 --> 00:00:21,640 Speaker 2: I would just note that the share price had had 8 00:00:21,680 --> 00:00:24,280 Speaker 2: a pretty strong run over the back part of last year. 9 00:00:24,280 --> 00:00:27,000 Speaker 2: I was up around twenty twenty five percent, and a 10 00:00:27,000 --> 00:00:30,680 Speaker 2: lot of investors were being early movers on the New 11 00:00:30,760 --> 00:00:34,559 Speaker 2: Zealand cyclical recovery story. Now I would note again at 12 00:00:34,560 --> 00:00:37,280 Speaker 2: the results, they're still highlighting that the construction market in 13 00:00:37,280 --> 00:00:40,760 Speaker 2: New Zealand is still very subdued. So perhaps the share 14 00:00:40,760 --> 00:00:44,400 Speaker 2: market that got a little bit ahead of itself. But 15 00:00:44,440 --> 00:00:47,640 Speaker 2: investors are looking really closely at the space. I mean, 16 00:00:47,680 --> 00:00:50,160 Speaker 2: the listed companies exposed there, Fletcher As being one of them, 17 00:00:50,520 --> 00:00:52,800 Speaker 2: are of a lot of interest to see that cyclical recovery, 18 00:00:52,840 --> 00:00:54,800 Speaker 2: and I think if you see some of that evidence 19 00:00:54,840 --> 00:00:56,960 Speaker 2: come through in the hard data, then the share prices 20 00:00:56,960 --> 00:00:58,960 Speaker 2: of these companies should react pretty strongly. 21 00:00:59,480 --> 00:01:01,920 Speaker 1: They said that they are not expecting things to improve 22 00:01:02,040 --> 00:01:04,240 Speaker 1: very much until twenty twenty seven. So investors are going 23 00:01:04,280 --> 00:01:05,360 Speaker 1: to have to be patient, aren't they. 24 00:01:06,400 --> 00:01:08,800 Speaker 2: Yeah, yeah, they will have to remain patient at this point. 25 00:01:08,840 --> 00:01:13,440 Speaker 2: I mean, the business has another strategy of just simplifying things, 26 00:01:13,440 --> 00:01:16,160 Speaker 2: you know, focusing on their core strengths, which is the 27 00:01:16,200 --> 00:01:19,720 Speaker 2: building materials products. You know, this is hopefully putting a 28 00:01:19,720 --> 00:01:22,679 Speaker 2: little bit less risk, a bit more predictability into into 29 00:01:22,720 --> 00:01:25,640 Speaker 2: the earnings, and in the theory, the market should reward 30 00:01:25,680 --> 00:01:28,479 Speaker 2: this with a high evaluation. And they have taken some 31 00:01:28,480 --> 00:01:30,880 Speaker 2: steps towards this. I mean, some of the legacy issues 32 00:01:30,920 --> 00:01:34,360 Speaker 2: that's plagued the business in the past appear very contained, 33 00:01:34,520 --> 00:01:36,640 Speaker 2: and they've sold their construction division, which which has been 34 00:01:36,680 --> 00:01:38,920 Speaker 2: a little bit of a headache. But I think the 35 00:01:38,959 --> 00:01:41,880 Speaker 2: main thesis for investors they will hope that the economic 36 00:01:41,959 --> 00:01:44,200 Speaker 2: cycle will improve things from here. But you know, the 37 00:01:44,200 --> 00:01:47,680 Speaker 2: business is doing a good job, you know, positioning itself 38 00:01:47,680 --> 00:01:49,360 Speaker 2: to take advantage of any upswing. Yeah. 39 00:01:49,360 --> 00:01:51,040 Speaker 1: And then on Spark, we were just speaking to the 40 00:01:51,080 --> 00:01:54,400 Speaker 1: ce as another company that's been struggling. What's the market 41 00:01:54,440 --> 00:01:55,560 Speaker 1: thinking about this result? 42 00:01:57,120 --> 00:02:00,680 Speaker 2: Yeah, very in line results from Spark today and I 43 00:02:00,720 --> 00:02:04,160 Speaker 2: think given some of the disappointing updates they've had. They'll 44 00:02:04,200 --> 00:02:07,920 Speaker 2: probably take this one, but they do produce some really 45 00:02:07,960 --> 00:02:10,400 Speaker 2: interesting read throughs for the wider economy, I mean the 46 00:02:10,440 --> 00:02:13,440 Speaker 2: mobile market that's still growing really really slowly. I mean, 47 00:02:13,560 --> 00:02:18,760 Speaker 2: low immigration isn't helping. But also unfortunately for Sparky, they 48 00:02:18,760 --> 00:02:20,639 Speaker 2: are still losing a little bit of market share and 49 00:02:20,760 --> 00:02:23,440 Speaker 2: mobile to cheaper alternatives. So you are you are seeing 50 00:02:23,480 --> 00:02:26,040 Speaker 2: trading down in the mobile market. And then you know, 51 00:02:26,120 --> 00:02:29,919 Speaker 2: the business and government spending still pretty weak and continues 52 00:02:29,960 --> 00:02:33,560 Speaker 2: to pull back, so you know, continues to highlight Kiwi's businesses. 53 00:02:33,639 --> 00:02:35,960 Speaker 2: They are remaining very tight with their spending. 54 00:02:36,000 --> 00:02:39,040 Speaker 1: Still, is this the bottom do you think for spark? 55 00:02:39,160 --> 00:02:41,320 Speaker 1: Is spark now an attractive option for investors? 56 00:02:43,120 --> 00:02:45,519 Speaker 2: Yeah, will be attractive to some investors. I mean it's 57 00:02:45,560 --> 00:02:48,680 Speaker 2: traditionally viewed as a very steady business and that pays 58 00:02:48,680 --> 00:02:52,600 Speaker 2: a big dividend, and it was important that they've stabilized 59 00:02:52,600 --> 00:02:54,520 Speaker 2: the financials. I think they've done. One result of this, 60 00:02:55,560 --> 00:02:58,280 Speaker 2: they're retained therefore earnings guidance and cash flow numbers, so 61 00:02:58,400 --> 00:03:01,720 Speaker 2: that's important and as long as they continue to defend 62 00:03:01,720 --> 00:03:04,440 Speaker 2: that dividend, I mean, it is trading it at multi 63 00:03:04,520 --> 00:03:06,760 Speaker 2: year highs that dividend yield, so that will be attractive 64 00:03:07,000 --> 00:03:08,639 Speaker 2: and if they can put a string of good results 65 00:03:08,680 --> 00:03:11,160 Speaker 2: together then it should get back in favor again. 66 00:03:11,240 --> 00:03:12,800 Speaker 1: That stuff, Jeremy, always good to talk to you. Thank 67 00:03:12,800 --> 00:03:15,080 Speaker 1: you so much, mate, Jerem Hutton of Milford Asset Management. 68 00:03:16,160 --> 00:03:19,320 Speaker 1: For more from Hither Duplessy Allen Drive, listen live to 69 00:03:19,400 --> 00:03:22,440 Speaker 1: news talks. It'd be from four pm weekdays, or follow 70 00:03:22,480 --> 00:03:24,200 Speaker 1: the podcast on iHeartRadio.