Fletcher, Ross Taylor

Fletcher Building has made a $190 million loss, only the second time since listing on the NZX in 2001 that it slipped into the red, shareholders will get no dividends for the full year and no trading update has been provided.

The company with a market capitalisation of $5.8 billion this morning released its annual result for the year ended June 30.

It declared a loss of $46m in 2009 and said today FY19 earnings guidance would not be provided until the annual shareholders’ meeting later this year.

The $190m loss for the June 2018 year is a big turnaround from the $94m profit for the June 2017 year.

“In line with the company’s dividend policy to pay dividends in the range of 50-75 per cent of net earnings before significant items, no final dividend was declared in FY18. The company expects, subject to satisfactory trading performance, to be in a position to resume dividends in FY19,” it announced to the NZX this morning.

“FY19 earnings guidance will be provided at the 2018 annual shareholders meeting,” it said.

Operating earnings – before significant items, and excluding Building + Interiors – were $710m which Fletcher said was within the company’s earnings guidance of $680m to $720m.

“B+I losses have been maintained at the $660m announced to the market in February,” Fletcher said.

Revenue for the year was $9.4b, up 1 per cent year-on-year “and driven by a solid sales performance across core businesses in New Zealand and Australia, offset by a reduction in construction revenues.”

Cash flow from operations of $396m was up $153m on the prior year, “reflecting improved working capital management, offset partly by continued outflows on the B+I projects”.

“In New Zealand the residential and development division performed strongly, growing revenue and earnings and significantly increasing the volume of units sold from 499 in FY17 to 714 in FY18. The distribution, building products, concrete and steel divisions all grew revenue, however this was offset in a number of businesses by raw material and supply chain cost pressures,” Fletcher said.

Shane Solly, Harbour Asset Management portfolio manager, director and research analyst said this morning’s result indicated the company was forming “a more solid foundation.”

Shareholders hope dividend payouts will resume next year. However, the outcome of chief executive Ross Taylor’s restructuring plan is yet to be seen, some say.


Source: NZ Herald