Photo: RNZ / Cole Eastham-Farrelly
Fletcher Building says trading has been in line with expectations in its new financial year, but is pointing to mixed house sales amid the market slowdown.
In a trading update, the company reaffirmed its 2023 operating earnings target of $855 million or better, compared to $756m for the year ended June 2022.
Trading in the products and distribution divisions across both sides of the Tasman remained in line with expectations, with volumes forecast to remain at or around current levels for the rest of 2023.
"We are watching lead indicators closely and we have a clear playbook if activity shows any signs of softening in the next six to nine months," Fletcher chief executive Ross Taylor said.
In its residential and development division, house prices and margins were running as expected, about 10 percent below the peak levels from December last year.
"House sales volumes have been mixed; solid through July and August, softer in September, but customer visitation levels have been picking up positively into the spring sales season," Taylor said.
"Group earnings and cash flows are expected to be weighted to the second half of 2023, this is due to the timing of revenues and working capital builds in the residential and development and construction divisions."
Fletcher Building also outlined a refreshed sustainability strategy, including a new commitment to achieve net zero carbon emissions by 2050.
"Our sustainability strategy reflects our genuine commitment to making a positive impact through delivery of both aspirational and achievable goals. We are already on track to reduce our CO2 emissions by over 30 percent by 2030.
"We believe businesses like ours have an important role to play in creating positive future outcomes. Our people and society expect us to act responsibly," Taylor said.