Fletcher Building has reported a first half net loss after tax of $120 million alongside major board and leadership resignations with chairman Bruce Hassall and group chief executive Ross Taylor stepping down.
The building and construction giant’s net loss for the six months to December 31 compared to a net profit after tax of $92m for the same period a year prior.
Revenue for HY24 was down 1% to $4.2 billion and EBIT before significant items was down 27% to $264m.
Taylor says the result was against the “backdrop of materially weaker trading conditions”, particularly in the New Zealand residential sector where volumes declined 20%.
“Disappointingly, the result was heavily impacted by the $165 million significant items provision on the New Zealand International Convention Centre announced on February 5 and a $122 million non-cash impairment and write-down on the Tradelink Australia business,” Taylor says.
In New Zealand, revenue for the materials and distribution divisions (building products, concrete and distribution) was 8% lower than HY23.
This compares to overall market volumes which were 15% lower compared to HY23. The market decline was driven primarily by the residential sector, which weakened by around 20%, to which Fletcher’s divisions have a 60% exposure.
Looking ahead, the group expects FY24 EBIT before significant items to be in a range of $540m to $640m.
Following the leadership resignations, an international and domestic search for a new group chief executive will be progressed, Fletchers says.
The search process will be led by non-executive director Barbara Chapman who chairs the company’s people and remuneration committee.
Taylor has a six-month notice period, which he will serve in full if required, to facilitate an orderly handover to his successor.
Fletcher chairman Bruce Hassall commented: “The board, Ross and I believe it is in the best interests of the business and the team that he handover to a new leader and that I hand over to a new chair at the time of the ASM in October.”
Taylor commented: “Fletcher Building is a great business, and it has been an honour and pleasure to have the opportunity to work with such a committed team of people.
“I remain committed to the business and facilitating a smooth and orderly transition to my successor who will be able to focus on leading the organisation through the next strategy cycle and beyond,” he says.
