18 Dec 2018

Fletcher Building sells off more assets

12:55 pm on 18 December 2018

Fletcher Building has sold a major asset and plans to resume paying dividends to shareholders next year.

Fletcher Building announces a $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 company said it's going to sell its Formica laminates business to Dutch based company Broadview Holding for $US840 million ($NZ1.22 billion).

Chief executive Ross Taylor said the sale is part of Fletcher's plan to quit non-core businesses and stay in its home markets.

"Our five year strategy is to refocus Fletcher Building's capital and capability behind our New Zealand and Australian businesses, with building products and distribution at our core."

Fletcher Building bought the Formica business, which employs more than 3,400 people in North America, Europe and Asia, in May 2007 for $947m.

Last month it sold its roofing business for $57m to a Canadian firm.

The restructuring and asset sales follow Fletcher's losses of close to $1 billion over two years in its big projects construction business.

The big losses and a breach of its banking agreements forced Fletcher Building to beef up its finances by selling new shares, selling assets, and suspending dividend payouts to shareholders.

Mr Taylor said the company is now in a position to resume dividends.

"The decision to reinstate the dividend was based on Fletcher Building board's confidence in the company's trajectory and return to profitability in FY19 (financial year 2019)."