Trading in Fletcher Building shares has been suspended ahead of announcements tomorrow about its profit outlook, a review of last year's loss-making projects, and a new chief executive.
Fletcher Building is New Zealand's biggest construction company. Photo: 123RF
The company has been under pressure all year following revelations of major cost blow-outs on two major building projects, and big losses in the value of several overseas investments.
The company, which is the country's biggest construction company, reported a net loss of $292 million for the year ended June, primarily because of losses on two major projects, believed to be the international convention centre in Auckland and Christchurch's Justice Precinct projects.
The chief executive Mark Adamson resigned as a result of the problems, and accounting firm KPMG was hired to look into the two big projects.
"The company is reviewing the financial performance of its Building and Interiors (B and I) business unit, which is being informed by the independent KPMG review of the two largest B and I projects, and the impact of that financial performance on earnings guidance for the 2018 financial year," Fletcher Building said in a statement to the stock exchange.
"The company is taking the necessary time to carefully consider this matter."
Fletcher Building's annual meeting promises to be a testy affair with a group that promotes the interests of small shareholders promising to ask questions of the board and to try to unseat one of the directors.
"Fletchers has been a serial under performer for a number of years, it's not just the recent issues. We would like to see some effort made at a strategy level to address some of the more long standing concerns," said the Shareholders' Association's chief executive Michael Midgely.
Several groups of workers from the Fletcher Building group have walked off the job today and are also planning to picket the annual meeting.
Fletcher shares last traded at $7.96 on Friday. So far this year the stock has fallen more than 25 percent while the stock exchange's benchmark to-50 index has risen 16 percent.
