|Stay away from waterfront stadium, Fletcher Building told
|Tuesday November 14, 2006
By Alistair Bull
A Fletcher Building shareholder says the company could suffer if it gets involved in building any part of a new waterfront stadium in Auckland.
The construction and building supplies company last week said one of its subsidiaries had been giving the Government advice on the proposed waterfront stadium, and it is understood to have secured the contract to build the base for the stadium should Auckland local authorities support it.
The Government last week said it preferred a new waterfront stadium for the 2011 Rugby World Cup finals, and gave Auckland local bodies two weeks to choose between it and Eden Park.
Chairman Roderick Deane told the company's annual meeting today that Fletcher Building did not want to take part in the debate about where the stadium should be.
However, shareholder Coralie Van Camp said the company's public standing would suffer if it got involved.
"It's four to one against in public opinion and even if you did build the piles I think we would forever be the bad guys," Ms Van Camp told the meeting.
"If you proceed and it isn't completed on time we would be the fall guys. But if you displayed some integrity and encouraged the Government to build in an appropriate place, possibly North Harbour, we would be the good guys."
Shareholders' Association chairman Bruce Sheppard expressed some concern about the company working on such a high-profile project with the Government.
Dr Deane said the meeting was not the appropriate place to debate where the stadium was built, but said the company would consider applying for the building contract for any stadium as it would any other building project.
"The company doesn't have a view about where the stadium should be built. That is a matter for local bodies and the Government to decide," Dr Deane said.
"I can assure you that once the decision is made about where the stadium is to be located, we would very much like to help to construct it, providing of course we can do that with an appropriate balance of risk and reward.
"The company in its construction division has been very conservative in that respect now for quite a long period of time and that's why it's been so successful. It sets high standards of service and quality, but at the same time tries to minimise our risk."
Chief executive Jonathan Ling said he was confident the company had enough staff to build a stadium in time despite an $802 million construction project backlog.
"Engineering has a number of its projects that are concluding over the next few months, and so they will have a number of people that will be freed up for this project and we're in good shape for that," he said.
If the waterfront stadium was chosen, Mr Ling said he would hope regulatory issues would be addressed in time for construction to start early next year.
He was unconcerned that investors who helped push the company's share price up last week might be putting more weight on a potential stadium contract than they should be.
"The first announcements on the Auckland stadium were with Trevor Mallard's media release on Friday afternoon. Prior to that we'd already gone through the $10 mark before there was any announcement," he said.
"I think the actual share price movement as a consequence of an announcement last Friday afternoon has been relatively minor if negligible."
The stadium was the main topic raised by shareholders at an otherwise uneventful meeting.
Dr Deane said the company was performing slightly ahead of last year despite slowing markets, and was happy with annual forecasts.
The company also said it was in a position to continue pursuing acquisitions due to its moderate debt levels and strong cash flows, with the focus currently outside Australia and New Zealand.
"We expect to report another satisfactory result for the current year, with the company's involvement in commercial building and infrastructure markets offsetting the continued softening in housing markets," Dr Deane said.
Net earnings for the first four months of the financial year were slightly ahead of last year, and the market forecast annual earnings at $388 million, he said.
"Based on results to date, and the expected successful resolution of the insurance arrangements for the Taupo MDF plant and the Pacific Steel transformer failure, directors are comfortable with this consensus forecast."