Fletcher Building Limited (ASX: FBU) shares rise 3% after announcing the US$850 million sale of its Formica Group division.
Fletcher Building is one of New Zealand’s largest businesses, it’s a manufacturer, home builder, and partner on major construction and infrastructure projects. Some of its divisions include Building Products, Distribution, Concrete, Steel, Residential and Land Development, Construction, Australia.
Fletcher Building’s sale of Formica
Fletcher Building is going to sell its Formica Group division to Broadview Holding BV for US$840 million (or NZ$1.226 billion).
Formica is a leader in the design, manufacture and distribution of innovative surfacing products for commercial and residential applications.
Fletcher Building CEO Ross Taylor said: “The divestment of Formica completes our strategy to exit our non-core businesses having already completed the sale of Roof Tile Group in November 2018.”
What will Fletcher Building do with the money?
Mr Taylor said that whilst the company will be prudent with its balance sheet, it intends to reinstate dividends for FY19. It will start with an interim dividend for the half year result which will be reported in a couple of months.
Fletcher Building has seen its share price fall by 30% over the past year according to Google Finance. Building activity can be cyclical so if you’re after businesses with reliable and consistent earnings then it might be better to go for shares with proven track records such as the ones in the free below report.
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