Auckland, February 20, 2014 – Fletcher Building today announced its unaudited interim results for the six months ended December 31, 2013. The group recorded net earnings after tax of $154 million, compared with $146 million in the prior corresponding period.
Operating earnings (earnings before interest and tax) of $281 million were $19 million or 7 per cent higher than the first six months of the 2013 financial year.
Adjusting for the adverse effects of foreign currency translation, operating earnings would have been up $32 million or 13 per cent in the period.
Total revenue for the group decreased 2 per cent to $4,273 million, as the strong New Zealand dollar more than offset underlying revenue growth. Adjusting for foreign exchange translation effects, revenue would have been $99 million higher, up 2 per cent.
Cash flow from operations was $179 million, down from $204 million in the prior period due to the acquisition of residential land in Auckland, increased inventory levels for the new Formica plant in China, and the timing of customer payments for major construction projects.
The interim dividend will be 18.0 cents per share, up 6%, and will be paid on April 16, 2014. The dividend will not be franked for Australian tax purposes nor imputed for New Zealand tax purposes.
Fletcher Building chief executive Mark Adamson said the improved result was driven by further increased activity levels across most sectors in New Zealand and improved conditions in the USA, in addition to early benefits realised from restructuring and the FBUnite transformation programme.
In New Zealand, where residential housing consents have recovered to levels last seen in 2008, the continued improvement in house building activity is expected to underpin trading results for the rest of the year, with additional activity driven by rebuilding work in Canterbury.
“Across most of our Australian businesses, sales volumes were mixed with declines in the steel and concrete pipe businesses, while volumes in the insulation and laminates and panels businesses were steady and increased in the plastic pipes and quarry sands businesses. In our Tradelink distribution business we enjoyed improved earnings as a result of the business improvement initiatives underway in that business,” Mr Adamson said.
In other regions, European activity levels stabilised with earnings improving following last year’s restructuring, while volumes in the USA continued to improve. In Asia, the new $77 million Formica plant, commissioned in Jiujiang, China in November will provide a platform for further growth in that region.
The business transformation programme FBUnite continued on track and has already delivered pleasing results in its first full-year. The annual total benefit from FBUnite is expected to be approximately $100 million per annum once the rollout of all initiatives has been completed.
“I’m pleased with the progress we are making towards a more unified and agile company and our business units are already experiencing real financial benefits from the various FBUnite work streams,” Mr Adamson said.
“Importantly, we are delivering on our earnings growth targets while at the same time implementing a programme of business enhancement initiatives that will underpin our operational and financial performance in the medium-term and beyond”, Mr Adamson said.
Fletcher Building’s financial outlook for the 2014 financial year remains unchanged from that given at the annual shareholders meeting in October 2013, with earnings before interest, tax and significant items expected to be in the range of $610 million and $650 million.
$4,273 million, down from $4,380 million
$154 million, up from $146 million
Operating earnings (EBIT)
$281 million, up from $262 million
Cash flow from operations
$179 million, down from $204 million
Basic earnings per share
22.4 cents per share, up from 21.3 cents
18.0 cents per share, up from 17.0 cents per share
For further information please contact:
Group General Manager
Investor Relations & Capital Markets
Phone: + 64 9 525 9043
Mobile: + 64 27 444 0203