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Speaker 1: Just like that.

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Speaker 2: Fetch a building sold it's a construction arm for at

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Speaker 2: least three hundred and fifteen million dollars to a French

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Speaker 2: multi national by the name of Vancy Vanci Construction. The

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Speaker 2: Overseas Investment Office and Commerce Commission will have to approve

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Speaker 2: the deal. But what does this mean for the company.

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Speaker 2: One of our oldest John Tukey, is a professor of

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Speaker 2: construction management at aut enjoins me. Now, good morning to you. John,

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Speaker 2: Good morning, sad day for an old company. But was

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Speaker 2: it the right move?

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Speaker 1: Well logical sell off the most profit or one of

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Speaker 1: the big high ticket items of your family silver to

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Speaker 1: raise the revenue, which is fine. The question is going

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Speaker 1: to be whether or not the removal of the construction

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Speaker 1: arm is going to significantly negatively affect the profitability and

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Speaker 1: indeed the sales of the building product side of things,

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Speaker 1: because obviously, when you're not reliant on one side of

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Speaker 1: the business generating business and the other side of the business,

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Speaker 1: it becomes harder.

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Speaker 2: Wascher building badly run or was it just unlucky.

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Speaker 1: Combination of circumstances. There were some very questionable decisions that

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Speaker 1: were made. If anybody thinks of that. Back to the

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Speaker 1: point where Fletcher's CEO announced that he was getting rid

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Speaker 1: of the quote old farts back in the day was

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Speaker 1: a great thing you can look of online. You know,

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Speaker 1: these were the risk managers of the business at the

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Speaker 1: same time as he was taking on board more risk

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Speaker 1: by expanding the book. So you know, yeah, you have

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Speaker 1: to ask whether or not that was a particularly transible move,

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Speaker 1: but it's a yeah. It's been a combination of circumstances. Obviously,

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Speaker 1: you had a big fire at the convention center, and

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Speaker 1: you had COVID and all the other things, which yeah,

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Speaker 1: generated a basically the perfect storm of circumstances.

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Speaker 2: Is this going to significantly shrink the company and its

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Speaker 2: influence on the inside X and the economy.

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Speaker 1: It will significantly shrink the company. It will make the

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Speaker 1: company much more profitable because construction operations are not particularly profitable.

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Speaker 1: Part they generate a lot of cash flow, but they

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Speaker 1: don't generate massive amounts of profitability per se. That having

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Speaker 1: been said, there is a there is a you know,

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Speaker 1: some of the long term infrastructural type of stuff that

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Speaker 1: flesh construction we're dealing with, generates a lot of business,

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Speaker 1: generate a lot of positive revenue. When they were when

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Speaker 1: they were run optimally, they most certainly generated a lot

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Speaker 1: of profits over the year. It's just a great shame

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Speaker 1: to see iconic brand for New Zealand as a whole

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Speaker 1: lose one of its principal issues, you know, every and.

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Speaker 2: I guess, I guess it. Let me make money if

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Speaker 2: they can sell the materials to the new constructor, which

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Speaker 2: is now called Vancy. And so what do we know

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Speaker 2: about Vancy from France.

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Speaker 1: A big successful organization. It is tempting to say that

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Speaker 1: they're likely to want to molt the asset more than

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Speaker 1: anything else. And you know, on the upside, they could

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Speaker 1: be potentially bringing some technologies, techniques, personnel capabilities that have

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Speaker 1: been lacking historically. I tend not to think that there's

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Speaker 1: going to be a major increase in profitability capability, let's

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Speaker 1: put it that way. But the downside, as I say,

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Speaker 1: you know, just from national prestige point of view and

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Speaker 1: the fact that you know, the government's always had a

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Speaker 1: contractor of first resort to go to to be able

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Speaker 1: to generate stuff and keep the money in house to

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Speaker 1: a certain degree. So yeah, it's just not a happy space. No.

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Speaker 2: John Ticky from the a U T and I thank

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Speaker 2: you for your time. For more from Earlily Edition with

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Speaker 2: Ryan Bridge, listen live to news talks it'd be from

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Speaker 2: five am weekdays, or follow the podcast on iHeartRadio