22 Aug 2018

Fletcher Building announces $190m loss

9:44 am on 22 August 2018

Fletcher Building has made a worse than expected full year loss as the problems with major projects overwhelmed the earnings of the rest of the group.

Fletcher announces $486 million increase in the projected losses for Fletchers' troubled Building and Interiors (B&I) division on 16 major construction projects.

Fletcher Building chief executive Ross Taylor. Photo: RNZ / Dan Cook

The country's biggest construction firm made a net loss for the year ended June of $190 million, compared with the previous year's profit of $94m, which reflected the $660m loss in the now defunct building and interiors (B+I) division announced in February.

The underlying profit, which excluded B+I's losses and other one-time costs, was $710m and near the top of the company's guidance range.

Revenue was little changed, rising just 1 percent to $9.47 billion, with nearly a third of the sales generated in Australia.

"We have seen volume and revenue growth across a number of our New Zealand and Australian businesses, but these gains have been more than offset by increased costs and our need to invest ahead of plan to meet higher than anticipated market demand," chief executive Ross Taylor said.

Most other parts of the business reported a drop in underlying profit, apart from the residential group, which showed a 5 percent rise.

The corporate division made a $111m loss, as a result of restructuring.

"With a new strategy in place we have started the new financial year with clear priorities and an operating model that will support us to deliver against them," he said, adding that the focus for the current year was on growing the core businesses, stabilising the construction division, and completing the divestment of non-core businesses Formica and Roof Tile Group.

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