Chief executive Andrew Reding expected market conditions to remain challenging in the near term. Photo: Supplied / Fletcher Building
Fletcher Building has posted a smaller half-year loss as the company continues to clean up its long-list of legacy issues, while business remains challenging.
Key numbers for the six months ended December compared with a year ago:
- Net loss $11m vs $134m loss
- Revenue $3.37b vs $3.58b
- Revenue from continuing operations $2.87b vs $2.85b
- Profit from continuing operations $45m vs $88m loss
- Significant items $7m vs $177m
- No dividend
Chief executive Andrew Reding said Fletcher was making progress in difficult trading conditions.
"The first half of [financial year 2026] was another demanding period for the building industry, with subdued markets across New Zealand and Australia," he said.
"Conditions differed between a particularly weak first quarter and a more stable second quarter," Reding said. "In that environment, our core manufacturing businesses held up well, supported by disciplined cost control and better operational execution."
Fletcher's interim result last year was affected by $177 million in one-off items related to its legacy projects, compared to $7m in one-offs in the latest period.
Revenue from continuing operations was flat on the prior year, with lower New Zealand volumes and ongoing competitive pressure, which was offset by stable performances in its core manufacturing businesses.
Last month, Fletcher announced the sale of its construction division, as the company worked to simplify the business after years of pressure from delayed projects and cost overruns.
"The sale of Construction is a major step in reshaping Fletcher Building into a simpler, more focused building products manufacturing and distribution group," Reding said.
"Combined with the cost and capital discipline we have put in place, it positions the Group well to benefit as market conditions recover."
Reding expected market conditions to remain challenging in the near term.
"In New Zealand, residential and civil demand is likely to remain relatively subdued through [financial year 2026], with a more meaningful recovery not anticipated until calendar year 2027," he said.
"In Australia, early signs of stabilisation are emerging in parts of the portfolio, although conditions remain uneven."
Something for the 'bulls and the bears'
Brokerage firm Forsyth Barr said Fletcher's operating earnings of $145m, broadly flat on last year, was slightly ahead of its expectations.
In a note, senior analyst Rohan Koreman-Smit said Fletcher's light building products division performance (which includes GIB & Insulation), and lower overhead costs, more than offset a weaker than expected result in its distribution division (which includes Placemakers).
He said the result had something for "both the bulls and the bears".
"For the bulls, the core materials divisions are performing well at the bottom of the cycle, there are signs of some cyclical volume momentum, costs are being reduced with more to come ... and legacy issues are being closed out," Koreman-Smit said.
"For the bears the result was weaker consensus expectations with Distribution particularly poor, net debt ticked higher ... and outlook comments suggest operating conditions remain subdued in [the second half of the year] and supported by one-off land sales."
