Fletcher Building chief executive Ross Taylor. Photo: RNZ / Cole Eastham-Farrelly
Fletcher Building's chief executive and board chair are stepping down amid a disappointing first-half result.
The company reported a first-half loss of $120 million, which included $180m to complete legacy projects and another $122m of non-cash writedowns on its Tradelink business, which it intended to sell.
The company's shares were in a trading halt from Monday afternoon to Tuesday, to give the market time to digest the result.
Key numbers for the six months ended December compared with a year ago:
- Net loss $120m vs $92m
- Revenue $4.25bb vs $4.28b
- Underlying earnings $264m vs $360m
- Interim dividend nil a share vs 18cps
Chief executive Ross Taylor said underlying trading cash flows were robust, as good working capital management offset.
However, the board had decided against paying a dividend.
"The Board has made the prudent decision to not declare and pay an interim dividend in order to maintain our balance sheet settings," he said.
"As we look ahead to the remainder of the year, we expect FY24 Group EBIT before significant items to be in a range of $540 million to $640 million, with the mid-point assuming a continuation of current market conditions for the balance of FY24."
"Against the backdrop of materially weaker trading conditions, particularly in the NZ residential sector where volumes declined 20 percent," Taylor said.
"Disappointingly, the result was heavily impacted by the $165 million significant items provision on the New Zealand International Convention Centre announced on 5 February and a $122 million non-cash impairment and write-down on the Tradelink Australia business."
The Tradelink business was going to be sold.
"Regarding the ongoing Perth plumbing issues, our testing and expert reports on causation continue to show that that the leaks are caused by installation failures and that there is no manufacturing defect," he said.
"We remain committed to developing a workable and appropriate industry solution."
Taylor intended to serve out the six months notice of his retirement, while board chair Bruce Hassall would step down at the company's annual shareholders meeting later this year.