Focus Live: Fletcher Building boss confirms fire started where blowtorches were being used on bitumen
The devil will be in the detail of the insurance policies for both SkyCity and Fletcher Building, an investment expert says as firefighters continue to fight the blaze at the International Convention Center.
This morning Fletcher opened down another 15c, or 3.2 per cent at $4.50 and SkyCity is down12c, or 3.1 per cent at $3.75. However, by 2pm SkyCity had recovered to be down 4c, or 1.03 per cent, at $3.83 while Fletcher shares were up 5c, or 1.08 per cnet at $4.70.
In separate statements ahead of a press conference this morning, SkyCity and Fletcher Building said they were covered by insurance.
"The briefing may answer some questions but in terms of the market impact, it's doing to come down to the nature and extent of the insurances," Salt Funds managing director Matt Goodson said.
"Both have said they have insurance cover. The extent of that will be the question." "For SkyCity, clearly there will be significant delays at least, given the fact that the thing has not been built yet.
"One wonders if there could be some impact on Sky City further down the line, relative to current earnings forecasts, but the devil will be in the detail."
Goodson added the fire could create some collateral damage for Auckland International Airport as it was likely to have an impact on future visitation numbers at a time when arrivals data is already showing a slowdown.
It is not known which insurance provider the two companies use. There have been unconfirmed reports the fire was started when an unattended blow torch ignited flammable material on the roof.
A sample of accoustic layering used in the International Convention Centre that is fuelling a massive blaze at the construction site New Zealand Herald photograph by Michael Neilson
Insurance giant Vero has information on its website regarding site cover policy for contracts works for commercial building projects.
When it comes to hot work, it says the policyholder will "make all contractors aware that when any hot work is carried out by their employees or sub-contractors that the following procedures should be complied with:
• hose reels or adequate portable fire fighting equipment must be kept at hand within the vicinity of any hot work operations;
• waste material is to be removed from the contract site at least once weekly. In addition, any combustible waste is to be cleared from the vicinity of any hot work performed at the end of each working day;
• the area of any hot work is examined one hour after the work has been finished;
• any hot work is to be carried out under the supervision of the site foreman, or equivalently designated person responsible for the performance of the insured contract;
• adequate protection will be given where necessary to any other part or parts of the contract works. "Hot work" means work such as grinding, cutting or welding operations, the use of blow lamps and torches, the application of hot bitumen or any other heat producing operation.
Asked at a press conerence whether the insurance cover would be null and void if there was any negligence or misconduct involved in the fire breaking out, Fletcher chief executive Ross Taylor said:
"I don't think that's the case."
"Again, we have to do the investigation."
Takeover speculation
Meanwhile, Australian media have recently reported speculation that Fletcher Building may be subject of takeover activity.
The Australian newspaper reported there was talk of Irish building materials company CRH being interested, although other sources said expressed doubt that the global group would be a suitor.
Another possibility, the paper said, was Perth-based Wesfarmers, which now has former New Zealand Prime Minister Bill English as a director.
Fletcher Building swung back into the black in 2019 financial year, reporting a $246m net profit from continuing operations after plunging $239m into the red in the prior year.
