Fletcher Building has reported a net loss of $419 million for the year to June 30, as the company grappled with weak demand, one-off costs, and legacy projects.
The net loss deepened from $227 for the year prior. Revenue fell 9% to $7 billion, while earnings before significant items dropped to $384m, down $125m on the previous year. The EBIT margin narrowed to 5.5% from 6.6%.
Managing director and chief executive Andrew Reding says the year has been “one of the most demanding years in recent memory, both for Fletcher Building and the industries in which we operate”.
“Our businesses faced tough market conditions, as well as undertaking significant internal change, and addressing legacy issues. However, significant progress has been made on our strategic plan to reposition the business for more sustainable returns going forward,” Reding says.
Despite the weaker earnings, Fletcher reduced net debt to $999m from $1.77b a year earlier, supported by a capital raise, the sale of Tradelink, and tighter cost control.
Operating cash flow was $501m, down from $588m in FY24. Capital and investment expenditure also dropped to $313m from $420m.
The company confirmed reviews of potential divestments in its construction and residential and development businesses, part of a wider effort to simplify the portfolio and sharpen its operational focus.
“These reviews are designed to simplify our portfolio, sharpen our operational focus, and unlock value for shareholders,” the company says.
“While there is no certainty that they will result in transactions, any potential cashflow and cost-out benefits are expected to begin flowing through from FY27.”
Fletcher said it had made progress in resolving legacy issues, including a settlement with the New Zealand Transport Agency on the Puhoi to Warkworth motorway and insurance claims linked to weather and landslips affecting the project.
Work on the New Zealand International Convention Centre is on track for handover in 2025, ahead of a planned opening in early 2026.
In Australia, the company signed an industry response on plumbing issues in Western Australia, with a provision of A$155m (NZ$170m) recognised earlier in the year.
Fletcher expects subdued market conditions to continue in New Zealand through FY26, with mixed indicators in Australia.
“While the near-term environment remains uncertain, our focus on cost control, operational discipline, effective capital allocation and portfolio simplification is positioning Fletcher Building well to both navigate current headwinds and deliver stronger, more sustainable returns over the medium to long term,” Reding says.
He also paid tribute to staff and shareholders.
“I would like to thank our people for their hard work, resilience, and commitment during what has been an extremely challenging year.
“I also want to acknowledge our shareholders for their ongoing support as we execute on our strategy to boldly reposition Fletcher Building for long-term success.”
