File pic Photo: Unsplash / Abdul Zreika
Fletcher Building has reported a full year loss of $227 million, with revenue little changed from the year earlier.
The building company's underlying profit was at the low end of expectations at $509m but still down 35 percent on the year earlier.
Key numbers for the 12 months ended June compared with a year ago:
- Net profit $227m vs $235m (included $301m in one-time items)
- Revenue $7.683b vs $7.679b
- Underlying profit $509m vs $785m
- Full year dividend nil vs 34 cents per share
Acting chief executive Nick Traber said the result reflected slowing demand, inflation and competitive pressures.
He said market volumes fell over the year, with New Zealand down 25 percent and Australia down 15 percent on the year earlier.
"We expect the year ahead to remain challenging, with macro-economic pressures likely to persist through the year," he said.
"At this point, we are planning for FY25 market volumes in our materials and distribution businesses to be 10 percent to 15 percent lower year-on-year compared to FY24, however we remain vigilant to further market weakness."
He said the loss was primarily due to a $117m non-cash impairment and write-down in the carrying value of its Higgins business, and $180m in additional provisions required to complete legacy construction projects announced earlier this year.
"After factoring in the Tradelink discontinued operations, we recorded a net loss after tax of $227m, compared to net earnings of $235 million in FY23."
Fletcher's return on funds employed before significant items was 10 percent, compared with 17 percent the year earlier.
Looking for investment capital
Traber said the residential and development division was performing well with strong profit margins and a return on capital of 15 percent.
"We think it is the right time to explore capital partnership options for residential and development, to invest in and drive the next phase of the business's success.
"Consequently, we have engaged Jarden to explore options with both local and international investors."
Leaky pipes a focus
Traber said the company's subsidiary Iplex remained focused on resolving plumbing matters in Perth, with legal action pending.
"Constructive negotiations continue and Iplex is intent on trying to reach an agreement in principle with the government and key parties in the near term," he said.