21 Aug 2019

Fletcher Building posts $164m full year profit

9:20 am on 21 August 2019

Fletcher Building has posted a solid full year profit but continues to be dogged by a weak Australian housing market and underperformance in some of its businesses there.

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 net profit for the year ended June was $164 million, compared with the previous year's loss of $190m.

Revenue was down $164m to $9.3 billion.

However, revenue rose $97m from its continuing operations to $8.3b, which excluded the sale of its Roof Tile, Formica and Dongwha & Sims Pacific Metals operations.

The net profit from the continuing operations was also stronger at $246m.

The company turned itself around after losing close to $1b in its building and interiors division (B+I) over the previous two years, because of delays and cost blowouts on major projects.

"FY19 was an important transition year for the company and we made significant progress on our five-year strategy," said chief executive Ross Taylor.

The company sold major assets, restructured itself, quit bidding for big building projects, and had a cash injection.

"In New Zealand our core building products and distributions businesses delivered good results, maintaining strong market positions and revenues despite operating in a highly competitive environment," he said.

A slowdown in the Australian residential market was the main negative in the result with earnings, with rising costs and poor operating results in some areas.

Mr Taylor said the company's turnaround plans were well underway in Australia, and expected to deliver growth in the year ahead.

The company reinstated dividend payments during they year with a total dividend of 23 cents a share, which included a final payment of 15 cents a share.

"We have landed a leaner organisation and end the year with a more manageable footprint and a strong balance sheet.

"Looking ahead, we will drive performance across the business in FY20," Mr Taylor said, without specifying guidance for the year.

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