2 Jul 2012

Fletcher Building stock up 2%

6:46 pm on 2 July 2012

Fletcher Building's stock has jumped more than 2% after it sold metals distribution businesses that are part of the Australian-based Crane Group for $70 million.

Austral Wright Metals and Mico Metals have been sold to AW Distribution and Wakefield Metal, respectively.

The businesses were acquired by Fletcher Building as part of the Crane Group purchase last year

Last week, Fletcher Building said it would close one of its two laminate making plants in Spain, due to weak residential demand in the struggling country.

Craigs Investment Partners private wealth research head Mark Lister says both moves are part of a rationalisation of the company's portfolios.

Mr Lister says he does not believe the sale is a response to the criticism that Fletcher Building paid too much, when it bought Crane for $1 billion.

"They've obviously identified a part of the business that's not core and they're happy to divest that to a purchaser who is focussed on that business a little more and is happy to pay them a reasonable price."

Fletcher Building shares have risen 19 cents to $6.06 each on Monday.