25 Mar 2020

Fletcher Building pauses dividend, share buybacks

11:31 am on 25 March 2020

Fletcher Building has scrapped its full year guidance, cancelled its interim dividend and suspended its share buyback in response to measures designed to slow the spread of the Covid-19 coronavirus.

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 government has banned all non-critical construction activity over the Level 4 four-week lockdown, which goes into effect from midnight.

One of Fletcher's largest customers, Precinct Properties, announced it was closing down the construction of the nearly $900 million Commercial Bay development.

Non-essential work to repair the International Convention Centre, under construction by Fletcher Construction in Auckland, which was severely damaged by a fire in October, would also be affected.

Its construction work on Auckland's City Rail Link was also put on hold yesterday.

"Since the FY20 half hear results announcement in mid-February, our businesses have continued to trade largely in line with expectations," Fletcher Building chief executive Ross Taylor said.

"However, it is now clear that Covid-19 and the significant escalation of government protection measures in New Zealand and Australia will have a material impact on our operations and our FY20 financial results."

He said the board was focused on preserving the company's liquidity through what was likely to be a challenging trading period for an unknown duration.

The company would also pause the planned divestment of the Rocla business.