The Fletcher Building Limited (ASX: FBU) share price could rise today in response to a strong update from the property business.
What happened with Fletcher Building?
Fletcher Building is holding an investor day presentation for shareholders which could boost the Fletcher Building share price.
Included in that group financial presentation is an update on its guidance for FY21 underlying EBIT (EBIT explained). EBIT, excluding significant items, is expected to be in the range of $650 million to $665 million, which is at the top of the previous guidance range.
Due to the strength of its financial performance, the business has decided to undertake a capital return to shareholders of up to NZ$300 million through an on-market share buyback.
Fletcher Building said that its balance sheet is in a strong position, with its debt levels expected to remain below its target range in the medium term. That position provides it with the capacity to recommence capital management, with the most effective method being an on-market share buyback.
Ross Taylor, CEO of Fletcher Building, said: “We continue to make material progress on executing our strategy and achieving key financial targets. We are seeing a broadly stable market environment with trading conditions in the second half of FY21 largely consistent with the first. Despite some supply chain constraints and input cost pressures, we continue to see good margin performance from the business. Forward indicators for market activity are pointing to ongoing robust volumes in New Zealand and Australia, with our businesses focused on delivering above market growth and improved profitability in this environment.”
