17 Feb 2016

Fletcher Building posts 51% first half profit rise

11:03 am on 17 February 2016
A screengrab from a Fletcher Building video showing construction work.

Photo: SUPPLIED / Fletcher Building video

New Zealand's largest construction company made a net profit for the six months ended December of $172 million, compared with last year's $114m which was hit by restructuring costs.

The company said revenue was up 2 percent to $4.43 billion, driven by strong performances in the Building Products and Distribution businesses, but offset by lower residential development and construction earnings.

The underlying profit of $288m included one-off net gains of $10m, from the sale of Rocla Quarries' joint venture assets, which were offset by closure of the manufacturing plants.

The net profit result topped expectations of $170m.

"We saw increased earnings from most of our manufactured building products businesses in New Zealand and Australia, and continued strong growth in earnings from our distribution division," said Fletcher Building Chief Executive Mark Adamson.

"This was partly driven by the strength of the broader construction market, particularly in New Zealand, but also resulted from the efforts we have made to lift performance across our business portfolio."

He said the outlook for the contruction business was encouraging, with a 65 percent increase in future contracted work of $3.3bn compared with $2bn last year.

Last month, Fletcher Building bought local road building firm Higgins Group, as well as reorganising its company structure.

Fletcher Building is the lead contractor in the earthquake rebuild programme for Christchurch, the Sky City convention centre and hotel, and Precinct Properties' Commercial Bay project.

It makes a borad range of building products from steel roof tiles to timber products, which it exports to Asia, Europe and the Americas.

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