Fletcher Building Limited (FBU) Earnings Call Transcript

[Foreign Language] Good morning, ladies and gentlemen. I am Bruce Hassall, Chair of your company. On behalf of the Board, it is my pleasure to welcome you to Fletcher Building's 2022 Annual Shareholders Meeting at the home of Rugby. Today's meeting is being held both in person after 2 years and online via the Computershare online meeting platform. It's going to be back in person after 2 years of online meetings. We welcome our shareholders, proxies and guests both here in the room and joining online. Before we start the formal business of the meeting, I'd like to remind people in the room to ensure their mobile phones are on silent, please. In the unlikely event of an emergency, if we need to evacuate the building, please leave by the nearest safe exit as directed by staff and security. Assembly is on Walters Road. As a quorum is present and due notice of this meeting has been given, I declare the meeting duly constituted and open for business. I will now introduce my fellow directors. On my right, your left, starting from the far end is Martin Brydon and Barbara Chapman. On my left from the far end, we have Rob McDonald, Doug McKay, Cathy Quinn and Peter Crowley. Your CEO, Ross Taylor, is seated on my immediate left and the Group General Counsel, Andrew Clarke, is seated to my right. We also have an attendance members of our leadership team and our auditors, EY. Moving on to the agenda. Today's meeting will commence with addresses from me as Chair and from Ross Taylor, CEO. We'll then move on to the resolutions that are outlined in the Notice of Meeting. The resolutions will be decided by poll. Questions on a resolution will be dealt with before they are voted on. At the conclusion of the formal business, we'll then take the opportunity for your general questions from the floor and online. For those attending online, you can start submitting questions now. Please note that questions will be moderated to avoid repetition and to summarize lengthy questions. We won't address questions that, in my opinion, are not reasonable in the context of this meeting or that repeat previous questions and do not allow all shareholders a fair chance to have their questions heard. Thank you also to the shareholders who have submitted their questions in advance. Ross and I will speak to the more frequently asked ones in our addresses. Finally, if for some technical reason, we don't have the opportunity to answer your question, we will answer them in due course via e-mail. At the conclusion of the meeting, we invite you to stay and enjoy some light refreshments. On behalf of the Board, I'm pleased to report that Fletcher Building delivered a very strong set of financial results in FY '22. Given that the year continued to feel the impacts of the global pandemic, this performance takes into account the significant COVID disruptions and lockdowns, which occurred during the first quarter. The group delivered improved year-on-year revenue, profit and margins while return on funds employed was ahead of target. EBIT was up 13% for the year, and net earnings improved significantly to $432 million, up 42% on FY '21. Cash management has been an important focus throughout the disruptions in the year. Cash flow from operating activities were solid at $592 million, and our balance sheet remains very strong. Against this backdrop of continued operational improvements and the strong financial results, the Board was pleased to pay total dividends of $0.40 per share for the financial year. The up to $300 million buyback program was also completed during the year. The results continue to demonstrate we remain on the right track and are achieving key milestones for continued performance and delivering stable results for success. The Board remains very focused on driving strong outcomes across a range of ESG measures and continuing to drive a performance culture. As with our financial performance, we also made progress on our key nonfinancial measures and outcomes during the year. The left-hand box on this slide shows the continued improvement on safety. TRIFR was 3.4 at the end of the year, 32% down on last year. This translated to 90% of our sites being injury-free through the year. The Board will continue to prioritize these critically important outcomes, focusing on making -- achieving 0 injuries every day possible and that everyone returns home from work safely. After the challenges of resetting our cost base through the early stages of the COVID years, the Board was pleased to see overall employment engagement improving to 69%. We will maintain our efforts so this continues. We've overseen the implementation of a materially enhanced parental leave policy, gender affirmation leave and improved remuneration structure, and we are continuing to work towards pay parity across the group. Moving to sustainability on the left-hand side of the slide. We believe sustainability in what we do and the products we make is central to building a better tomorrow. Over the past few years, we have focused our energies on decarbonizing, recycling, minimizing waste and continually innovating to produce better, more sustainable products and homes. We continue to make good progress on reducing carbon and improvements on other sustainability initiatives. Group carbon emissions are now 12% below our 2018 base levels and we diverted 51% waste from landfill. We also published our first climate-related disclosure report. Finally, on this slide, the COVID disruptions that occurred to demand and supply chain over the last couple of years impacted on our customer Net Promoter Score, which softened slightly to 36 through the year. The Board acknowledges this has been a difficult time for many of our end customers. The lessons regarding the supply chain challenges over the last 2 years have been learned, and we have changed our operational and risk management processes as a result to help safeguard against them occurring again. But looking forward, most building product supplies, including plasterboard, are moving back into balance. Capacity has been added and international and local supply chains are starting to sort themselves out. Beyond this, we are very focused on improving our own performance and value proposition to our customers, including driving e-commerce and innovative product solutions. Overall, we are pleased with the progress we are making on safety, our people, sustainabilities and our customers, but we recognize there is still work to do. Finally, on the slide, as we're looking ahead to drive the long-term success of Fletcher Building, the Board is focused on a number of key themes. Firstly, continue to oversee the performance culture that has becoming embedded to deliver long-term sustainable performance across both financial and nonfinancial metrics. To this end, we are today announcing our commitment to an enhanced sustainability strategy and targets. As Ross will outline shortly, these initiatives are ambitious, but we see that we need to continue to play our part in the communities we operate and drive leadership across a number of fronts. Climate change is an urgent global priority, and we are committed to minimizing our impact and managing the climate-related risks to our organization, including on carbon and waste. We want to lead the way with continued innovation and producing sustainable products and are committed to driving a circular economy. We value the importance of diversity and inclusion of our people by fostering an inclusive culture and having better gender and ethnicity balance in leadership. Importantly, this focus is aligned to driving meaningful outcomes for our people and our customers. Despite all the uncertainty and disruption of the past year, and there's been a lot, as a Board, we never lose sight of our agenda. We never lost sight of our agenda and core responsibilities to ensure Fletcher Building has the right strategy and execution, talent and risk management to deliver value in the near and long term. The investments we are making across the business will further enhance the strength of our business and is critical for future success in delivering stable returns to our shareholders. We are very confident about the current momentum and the direction Fletcher Building is on for delivering continued success and is very well positioned for the future, both in New Zealand and Australia. Before handing over to Ross, I'd like to express my thanks on behalf of the Board to our people who have worked so hard to deliver a successful year, particularly amidst the uncertainties of COVID. We also thank our shareholders for your continued support. With that, I now invite Ross to provide his address, Ross.

[Foreign Language] Thanks, Bruce. And I'd also like to add my welcome to those joining our shareholder meeting today, both here in the room and online. Having delivered a strong set of results in FY '22, which Bruce just outlined. Our sites are now set on continuing to improve our operational performance and growing the top line. This slide summarizes on one page what we've been doing to achieve this. And I'll briefly talk to the 5 key areas we remain focused on going forward. We have a belief that all injuries are preventable, and we want to get everyone home safely each and every day. We want to see each business absolutely focused on its customers, making sure the solutions and service that they're offering are better than what anyone else in the market can achieve. We need to be ever vigilant that we have our costs under control against both local and global competition. To achieve this, we will relentlessly benchmark, evolve and invest to ensure we maintain this position. We want the economic performance of each of our businesses to be in the top quartile of similar businesses globally, not just our local competition. And finally, we need to take advantage of both our relative scale in New Zealand and Australia in our distance from the larger Northern Hemisphere markets. This allows us to innovate and drive sustainability as a fast follower and to disrupt our home markets and ourselves before others do. This done well should allow us to readily achieve above-market growth across all of our business lines. In going after our growth in revenue and profits, it's important we make sure we stay true to our purpose, improving the world around us through smart thinking simply delivered. We measure progress -- our progress against this commitment across a number of areas, ensuring our workplace is safe, diverse, and inclusive, putting our community at the heart of what we do, moving progressively to achieve a net positive impact on the environment, looking to sell only sustainable building products and solutions and embedding circular economic principles across all of our businesses. I'll now talk to each of these areas in a bit more detail. We want the makeup of our business to reflect the communities we operate in and for our people to be able to bring their whole selves to work each day and importantly, return home safely at the end of that day. We are making good progress on safety with 90% of our sites injury-free last year. We have set gender targets in management goals and we're starting to see year-on-year improvements in the number of women generally and importantly, those in leadership roles. We're ensuring our facilities, our policies, the forms we run and the way we behave support and foster a diverse and inclusive organization and culture. And pleasingly, while there remains much to do we are seeing our overall employee engagement scores increasing off the back of this work. As a large business in our sector, we touch many customers and communities around New Zealand, Australia and the South Pacific. Doing great things for our customers is clearly aligned with our business, but equally important is how we support and enhance the communities where we operate. We are very active across both these areas. For our customers, we're providing digital tools to better support them in their business, driving leading e-commerce and online sales options, focusing on providing better stock and service levels in our competition and constantly bringing innovations and smart ideas to them. We measure our performance constantly and looking to get all of our businesses to world-class levels in the coming years. Across our communities, we do many things, both broadly and at the local level. Our larger programs are focused around educational sponsorship and support -- educational sponsorships and support. All of our businesses are active at their local levels as well and quite often working with our suppliers and customers on specific things that matter to those communities. Through FY '22, these activities resulted in donations and sponsorships totaling around $3 million. We are absolutely convinced that good business has to be good for the environment, and we're committed to both achieving this ourselves and doing what we can to influence the broader sector. Our carbon emissions are now down 12% on our 2018 levels. We have detailed plans on getting to a 30% reduction by 2030 and we are committed to net zero by 2050. We're achieving this through many technology innovations and plant upgrades, but also through the clever reuse of waste streams that would otherwise go to landfill. For example, we have substituted 50% of the coal we use at the Golden Bay Cement plant with waste tires and waste wood. We're also focused on maintaining or improving biodiversity at and around our quarry operations in our larger residential development projects. We have found that these types of operations can be done sustainably. There is work to do over the coming years to define our targets and pathway to achieve a net positive environmental impact but we're convinced this is absolutely doable. Innovation in products and solutions are increasingly intertwined with sustainability, and we expect that trend to increase. Interestingly, this is not generally coming at additional costs. Sustainable products are progressively replacing the older products at the same or lower cost point. We are very well positioned to both take advantage of this and to drive it within our industry. Already, 61% of our revenue comes from sustainably certified products, and we expect this to be above 75% in 3 years' time. And we're actively looking at how we drive and introduce sustainable solutions. A good example is our LowCo home, which has been designed to operate through its life to limit global warming to less than a 1.5-degree increase in temperatures. And the final piece of the puzzle is to consciously eliminate waste across all our operations and to create ways to reuse both our own and others end-of-life products. As of last year, we have diverted 51% of our waste from landfill and expect that to be above 70% in 3 years' time. We're making equally strong progress in our circular economy commitment, with many exciting examples emerging. We have diverted [ 80,000 tonnes ] of other people's waste from landfill at Golden Bay Cement. And our ambition is to double this and by 2030, become 100% coal-free. Our insulation and plastic pipes businesses already extensively use both recycled product and general recycled plastics and glass. And our plasterboard operation will be able to reuse recycled plasterboard when the new plant at Tauriko opens next year. While I'm the first to admit that much remains to be done, we're well on the path of driving both strong financial returns and growth while at the same time, living up to our promise to improve the world around us through smart thinking simply delivered. Turning now to a trading update and the outlook for FY '23. Trading in the products and distribution divisions across New Zealand and Australia remains in line with expectations. And customer indicators point to volumes remaining at or around current levels for the balance of FY '23. We are watching lead indicators closely, and we have a clear playbook if activity shows any signs of softening in the next 6 to 9 months. In our Residential and Development division, house prices and margins are in line with our expectations and are running at around 10% below the peak levels we reached in December '21. House sale volumes have been mixed, solid through July and August, a bit softer in September but customer visitation levels have been picking up positively in the spring sales season. Group earnings and cash flows are expected to be weighted to the second half of FY '23 and this is due to the timing of revenues and working capital builds in our Residential and Construction divisions. And finally, we reconfirm our FY '23 EBIT target of $855 million or better. When we look at our strategy, we remain confident we're well positioned to drive shareholder value, both in the short and longer term. We expect to see solid profit growth in FY '23. We continue to have both plans and runway to further drive margin improvements above what we're achieving now. We have an established pipeline of growth opportunities that will start to mature over the next 3 years. Our balance sheet and financial position is strong, and we intend to keep it that way, and we remain ready to act if we see demand staying to ease in the next 6 to 9 months. Before I hand back to Bruce, I'd like to thank our people for their commitment and resilience through what has been a very demanding couple of years. It is through their efforts that we've been able to get Fletcher Building to a place where we can now focus on the many exciting opportunities that are in front of us. And I'd also like to acknowledge all our customers and thank you, our shareholders, for your ongoing support. [Foreign Language]

Thanks, Ross. I now move on to the formal business of the meeting, which is to vote on the resolutions outlined in the Notice of Meeting to all shareholders in September. All resolutions are ordinary resolutions. To be passed, they require the approval of a simple majority of the votes of those shareholders entitled to vote and who vote on the resolution. I advised at the beginning of the meeting that we will vote on the resolutions by way of a poll. Any undirected proxies votes given to the Chair of the meeting or any director will be voted in favor of the resolutions. Any directed proxies given by the shareholder will automatically be cast as directed. For eligible online attendees, voting on the resolutions is now open, and you can vote at any time until I declare the voting closed. For shareholders and proxies in attendance in the meeting, I invite you to place your completed and signed voting proxy form in one of the ballot boxes, which will be passed around the room after all resolutions have been introduced to the meeting. If anyone in the room is unsure how to complete the voting form, I invite you to go to the registration desk where someone will be able to help you. I will now turn to the resolutions. It is now my pleasure to move that Peter Crowley be reelected as a Director of the company. Peter was appointed to the Board on 1 October 2019. He's a member of the Audit and Risk Committee, a member of the Nominations Committee and a member of the Safety, Health, Environment and Sustainability Committee. That's a mouthful. The Board has agreed that he is an independent director. His credentials are outlined in the explanatory notes to the Notice of Meeting. The Board unanimously recommends that shareholders vote in favor of his reelection. I now extend to Peter the opportunity to address the meeting in support of his reelection Peter.

Thank you, Chair. Good afternoon, fellow shareholders, ladies and gentlemen. It really has been a privilege to serve as a Director of Fletcher Building Limited over the past 3 years. And today, I'm again seeking your support for election to the Board. As Bruce and the documents you've received indicate, I have a background of over 40 years as an Executive and a Director in the building products and construction materials industries in Australia and New Zealand. With this experience, I bring a strong mix of operational and governance skills to the Board. These skills and experiences are highly aligned with the interest of our shareholders, employees, customers and the communities which the company serves. As an Australian resident, I am passionate about the building products and wholesale distribution industries in Australia and provide my own governance insights to drive opportunities in these markets. Improving performance from the Australian operations is an integral part of the company's strategy, and I'm pleased that steady progress is being achieved. Over the past 3 years, I have served and this is back to the mouthful of committees on the Safety, Health, Environment and Sustainability Committee; the Audit and Risk Committee and the Nominations Committee. In fulfilling my duties with these various committees, I along with my Board colleagues have been able to visit many sites across Australia and New Zealand. During the COVID-19 lockdowns in 2020 and subsequently 2021, I made a special effort to visit as many East Coast Australian sites as I could to maintain a connection between the Board and our workforce. And across all my interactions with our employees, I've encountered a strong customer focus and a culture where improving safety is a #1 priority to every employee. Looking forward, I am excited by the opportunities ahead for Fletcher Building. The company is now on a strong financial footing and can invest to better meet our customers' product and service needs while also significantly reducing carbon emissions and waste. I truly believe Fletcher Building is in a unique situation to take a leadership position in New Zealand and establish our future as a sustainable business. Fletcher Building is also bringing innovative new products and services to our markets. Some of these innovations have been developed within the company, while others are great ideas adopted from overseas. These ideas and innovations will benefit our customers and broader communities. It's been great, gaining insights into some of the significant innovation and growth opportunities, which have emerged to date. For example, at Laminex, we're using, what was formally considered, waste material to create new high-quality building products. While at Golden Bay, new cement products and the use of alternative fuels will lower the carbon dioxide produced in making cement and concrete. This will contribute to delivering a low-carbon future for New Zealand. Ladies and gentlemen, we have a clear strategic plan with the financial capability and people to deliver it. With your support, I look forward to continuing to work with my fellow directors, with Ross and the management team to create new -- to create value for our shareholders and the broader stakeholders in Fletcher Building. Thank you.

Okay. Thank you, Peter. I now invite discussion on the resolution. Are there any questions that shareholders would like to ask Peter Crowley? If you're in the room, I invite you to please raise your hand and a microphone will be handed to you. Before you ask your question, please state your name. Okay. Are there any -- doesn't seem to be any in the room? Are there any questions online? Sorry, I couldn't quite see behind it. Go for it.

[Foreign Language] [ Delan Roberts ]. In reference to visiting Australia, could you tell us what percentage of ethnic aboriginal people you might be employing in Australia [indiscernible].

Ross, would you like to make a comment? Perhaps you could...

Yes. Look, in defense of Peter, look, it's a very low percentage. It's in the 1% to 2% level. The reflection broadly of the background of communities. The thing I'd add to it, though, is that we've just started the recognition of First Nations process business over there. So it's a very important step for us because it's about the reconciliation process. So it's a journey, and it's been an important one for us to start because it just lets us engage with the broader First Nations community across the country. So we take that obligation very seriously.

Okay. No other questions and there are -- no questions online. Okay. Not only -- we haven't got to general business yet, we're a bit there. We'll now move to the second and final resolution. I now move that the directors be authorized to fix the fees and expenses of the auditor. EY is the company's auditor and is automatically reappointed under the Company's Act 1993. This resolution authorizes the Board to fix the fees and expenses of the auditor. EY audit partners are present at the meeting should shareholders have any questions of them concerning this resolution. I now invite discussion on the resolution. Are there any questions in the room? Are there any questions online? Thank you. We'll now vote on the resolutions. Please now cast your vote on resolution 1, the reelection of Peter Crowley. And please cast your vote on resolution 2 that the directors be authorized to fix the fees and expenses of the auditor. The voting on the 2 resolutions will close shortly. So it will just take a minute for that to take place, and there's people walking around the room with boxes, you can put them in. [Voting]

Okay. All the resolutions have been collected. Okay. So voting on the resolutions is now closed. You will now see on the screen the results of the proxy voting received ahead of the meeting for the 2 resolutions. The company's auditor, EY, will act as scrutineer for the polls. Please note that the final results of voting on the resolutions will be advised to the NZX and ASX this afternoon. Ladies and gentlemen, finally, we turn to the part of the meeting where shareholders have the opportunity to raise further questions. I'd now like to give any shareholders both present here and online, the opportunity to ask questions. While we wait for your questions first in the room, we will address the presubmitted questions received ahead of the meeting, which haven't been specifically answered through my or Ross' address already.

We received a question from Alexander Wards mostly relating to the road closure at Fletcher living development and Lincoln, the South Island earlier this year. We've responded to this already. The road is now fully sealed and local residents are enjoying a much improved Fletcher road. Well done. We'll now answer questions starting with those in the room. Please raise your hand if you have a question and wait for the microphone to come to you.

My name is Robert Gray, shareholder. This business last year, where you couldn't supply GIB board, people have been importing it. How much damage do you reckon has been done for the future supply? These big construction companies are likely to keep importing it. Then you'll come to a situation where there's price wars between the 2 of you and the ones imported. The overseas company that is supplying it, they'll probably want to keep the business. So they will probably lower their prices and in competition to yours. And how much damage do you think has been done?

Okay. Thank you. Good question on GIB. So first of all, if we sort of go back, I mean, the challenge we had with GIB is with many building products at the time is that there were surges in demand. And during last year, demand effectively went up 200%. So it was impossible for the market, and we're a big part of that to supply that. So that compounded that problem. And then we also had a number of importers that have been in the market for in New Zealand for a while that withdrew from the market because they could sell the product more easily in their home markets. So in the context of where we are now, as we've stated, we're now back to supply starting to sort of normalize back to 3 to 4 weeks, pretty similar with most building products, and we are very focused on delivering to our customers. We are confident that we will -- we are in good position, and there will be no long-term impact on the business. Very confident about that. And that also reflects the fact that the Winstone Wallboards has a great customer service model and their proposition has generally been unmatched by competitors. So we're pretty comfortable. It's been challenging. It's caused challenges for us and obviously for builders and customers -- end customers, but we're coming out the other side of it. And we do not believe there will be any long-term damage to the business. Any other question down the back there.

[ Edwin Stranahan ]. I'm a shareholder. Question I had relating to the use of sand that you're taking out of the Kaipara Harbour. A lot of the information that I actually gained was from a consultant's report that was done as an appeal regarding the taking of sand from [ Pakiri ]. They were saying that in about 5 years' time, there was going to be about 1 million tonnes taken out of the Kaipara. Do you see that as sustainable? Because if you do, where is it being replaced from. The Kaipara has actually got a buildup of sludge in above the sand, and that sludge [indiscernible] monitoring that every 3 months to see what damage is being done to the marine life, particularly the smaller ones. I know of one [indiscernible] up there actually had its whole farm wiped out because of the amount of sand that's being taken out. Do you see an alternative source for that sand to be obtained from?

Okay. Thanks. Detailed question. Ross, why don't you pick that up?

The first thing I'd say, look, I understand your concern. What occurs when we're into, what I call, those more dynamic resources like, sand or gravel out of riverbeds, is they get constantly assessed as terms environmentally. And while you may have other data, we are heavily scrutinized with the authorities, and we have to review those each and every year as we take those resources. And the reason I call them dynamic is to the extent there then becomes over use of a resource or that looks like a potential, then we have to pivot to different places and do it that way. So in regards to resource, you're talking about I'm absolutely confident that it's actually getting scrutinized and getting reviewed. I can't talk to the specific issue you mentioned. But what we do, do take seriously as the comments I made in my thing is we are very focused on how we impact the environment in the broader environment, including biodiversity. And if we thought that what we were doing was having a systemic impact we would actually think twice or we'd actually change what we're doing with that resource. So I don't have the facts in front of me exactly on what you're talking about, but I can assure you, we do look at that.

The Mt Rex Shipping Company that's actually taking it out of the Kaipara. I guess they've actually got a license for that. That is usually well perhaps always for a finite period. Do you know when that license...

No. Off the top of my head I don't. And as I said, there's 2 things that [ lends ] as we look at this through across all our operations. We may have a license or a right but we also test ourselves as the right thing to do. And a reality, the size of company and the impact we have is you've got to conduct yourselves appropriately. And I mean that quite generally. It doesn't mean we get everything right all the time, but we actually take that very seriously. So we will always be looking at what is our license and legal rights around things as well as what do we feel the right thing to do is as a company.

And you're quite happy with what you're doing is all right?

I know it's reviewed. I just don't know the specific details off the bat. And I can assure you, I'll go back and have a look at it after this and just have another dig around it.

We can drop you an e-mail on that. Any other questions? Question right down the front there.

Can you hear me?

Yes.

Okay. Thank you. My name is [ Shabbir Badj ]. I've got some 3 questions. First thing I would like to congratulate you for your excellent performance. But I want to know because you see you people are very broad and vague in giving any specifics. So I want to know if there is any specific initiative which you are taking, taking advantage of the good financial balance sheet that you have as of today? The second question is, are you taking any steps for NZ government to achieve its housing targets? And my third step -- third question is -- you're talking about the sustainability and all that, whether you have any specific program to raise trees and all that, like other people are doing? And what specific action you are taking so that you can -- your industry is in wood building and all that, everything. So are you there in any project because I heard the government is taking a lot of initiative in developing the forest and all that.

Okay. Let's try to deal with it. So the first one was what specific initiatives we're taking, leveraging our strong balance sheet. Thank you for acknowledging our strong balance sheet. So as we've sort of said, we have a range of growth initiatives that we're focused on. So the largest one that's been running for quite a while is obviously the New Wallboards plant at Tauriko down in Tauranga. But we've also announced in the last sort of 12 months, we -- investments in relation to a new wood panels plant for Laminex down in Taupo. Insulation business, Comfortech. We are significantly increasing capacity there in light of the changes to the increased insulation requirements, frame and trust we're looking to build a new facility there, [ New Steel ]. So we are looking -- we have a range of growth initiatives, which are obviously organic ones. And we also continue to look at growth investments, which are maybe alongside where we currently operate. So there could be adjacencies. So we are appropriately and carefully looking at growth opportunities, conscious that we're spending your money. And we're doing that in a very disciplined manner. Next one was around sort of the housing shortage in New Zealand. We're doing our very best, one, to run our plants as hard as we can to produce building products right across the spectrum and investing and increasing capacity with new plants and material upgrades. And also Steve Evans, who runs our residential business has got ambitious targets to -- in relation to their own building houses. So sort of a 4- to 5-year plan is to look that significantly. So we are very focused on that. And the last one was around trees. So that -- do we -- are we -- if we got any plans to go into sort of trees. It reminds me of many years ago of Fletcher Challenge to proceed to Fletcher Building had Fletcher Forests. So no, at this stage, there are no plans to do that. But we do -- I mean, we currently don't have a timber business. But we do obviously buy a lot of timber. PlaceMakers is probably the largest purchaser of timber and board in New Zealand. And we obviously do work across the industry to encourage trees. I mean New Zealand, we're lucky in many respects. We have a sustainable wood industry where our trees grow particularly ready out of pine, which we use mostly of over 26- to a 28-year cycle versus in Northern Europe made the trees take 100 years to grow. So again, we're lucky and it's sort of sense, but -- and we're working collaboratively across the industry to encourage their whole sustainability around trees and forest. Okay. Are there any other?

I'm Coralie van Camp, shareholder. I can't remember where the saying came from, but there's money in muck is a very true one. When I last checked, EnviroWaste was owned by Cheung Kong Infrastructure of Hong Kong and the Chinese owners of Waste Management are in the process of selling to a fund management company out of Singapore waiting overseas investment approval. So I would like to put a hypothetical question to you, seeing as you're very interested in recycling and sustainability and that 46% of your products are recycled. But if National and Act form a government next year, would Fletcher be conducive in building in partnership a big recycling plant in Auckland to take all our household rubbish and instead of trying to send it overseas, I believe, there's a plant in the South Island, but we need one in Auckland. Would you be conducive to considering doing that?

Haven't currently given it any thought or is interested in looking carefully at opportunities. I would say that a lot of the material that we currently recycle, we actually are recycling and then obviously using it as -- whether it's a fuel source or if it's plastic or glass that goes under insulation. So we are -- we probably have, for a number of years, being one of the biggest recyclers of waste material in New Zealand. Probably haven't got the credit for it, but we have been. And -- but at the moment, are we actively looking to move into running a giant recycling plant. I mean interesting, I was in Denmark recently, if you go to Copenhagen, they have one of those in the area. But no, it's not currently on our agenda, but we're always looking for opportunities...

And also, in those Nordic countries, they burn a lot of their rubbish for electricity. So it's just a thought.

Yes. Thank you. Interesting idea. You got that in your memory bank, Ross.

I do.

Question over here. And then we'll come up the front here.

Mohammed [indiscernible] , shareholder, I've got some data here, resource from Morningstar with one of the major bank securities. The -- Okay, the COVID started in 2019, in year 2020. I got a data from November 21st, the share price was $7.25, right? Our valuation according to Morningstar research is $6. Now we slide it down. I checked it on Friday because I didn't have a chance in the morning, the price was $4.90. So there is a variation of $2.35 in between the period. In comparison to the similar sort of company who haven't paid dividend for the -- I can't name the company, they haven't paid the dividend for the last 2 years, their variation has been only $0.75. And there has been a big demand for residential and commercial properties within this period despite the COVID and all that, don't throw the excuses on COVID, [ Ukrainian war ] and all that. I would like some sort of -- can you throw some light on this why the variation was so big from $7.25 to $4.90?

Happy to comment on that. So look, when -- if you just think in the context of we've just delivered a really strong financial performance and our share price doesn't seem to reflect that. Why is that? It's a good question. And it's largely to do with a range of macro factors. There's no doubt that what's happened is there's a view on -- there's a global view on the New Zealand economy and that's actually had an impact on us. And then there's also been a perspective on, if you look at the major building products companies that are sort of in our peer group in Australia, the share price has been affected. So this sort of macro view on the economy, global challenges, shipping, Ukraine, wars, inflation, interest rates rising, all of the above. And that's the primary challenge for us at the moment. And that's what's impacted on share price. I think there's another thing is that Fletcher's over the last sort of 4 or 5 years that I've been on the Board, the first part of it, we were dealing with, what I call, the near-death experience of construction. And in recent times, Ross and the management team have reset the business and are focused on growth going forward. There's no doubt the markets have a view as to whether we'll -- the economy, if we look -- talk about next year, what the economy is going to be like. And I think what we have to demonstrate that if the market demand comes off, that we can still manage this business very well. So how the company performs, through the cycle will be very, very important in relation to the share price. Okay. Thank you. We've got another question down the front here.

It's Brian Farley, shareholder. I'm just interested how we deal with the pollution that is probably caused by burning tires and wood to make cement.