FY20     |   19 February 2020

Fletcher Building announces FY20 half year results and dividend

For more information, please contact:

MEDIA INVESTORS AND ANALYSTS
Christian May
General Manager - Corporate Affairs
+64 21 305 398
christian.may@fbu.com
Aleida White
Head of Investor Relations
+64 21 155 8837
aleida.white@fbu.com

Auckland, 19 February 2020:  Fletcher Building today announced its results for the first half of FY20. 

Summary:

  • Revenue of $3,961 million, in line with market conditions
  • EBIT before significant items of $219 million, compared to $248 million in HY191
  • Net Profit After Tax of $82 million, compared to $89 million in HY19
  • Balance sheet remains strong, with improved cash flow
  • Interim dividend of 11 cents per share declared, to be paid on 9 April 2020
  • FY20 Group earnings guidance in the range of $515 million to $565 million reconfirmed

Fletcher Building Chief executive Ross Taylor said: “HY20 results are in line with our expectations and those set out at our Annual Shareholders’ Meeting in November 2019. Our business is now stabilised and focused, providing the foundation to drive consistent performance and growth into the future.”

Group revenue was $3,961 million, 5% down on HY19 as anticipated, owing to reduced revenue on legacy construction projects and tougher market conditions in Australia. EBIT before significant items was $219 million. Trading cashflow from continuing operations (excluding legacy projects) increased to $88 million from $36 million in HY19 due to ongoing improvements in working capital.

“Our New Zealand core businesses outside of Steel delivered a solid performance, with earnings in line with last year and improved operating margins in several areas. In Steel, trading conditions remain challenging, though we have seen volumes and margins improving as we enter the second half.

“Residential house sales are benefiting from strong demand, with a large volume of committed sales due for settlement in the second half. Construction has secured new work in target areas, and there is no change to the legacy project provisions. Insurance will respond to loss and damage to the NZ International Convention Centre caused by the October 2019 fire, and an extensive work programme to determine the rebuild plan, timeframes and cost is now underway.

“In the context of a challenging Australian market, we are seeing the benefits of the cost out programme, as well as our investments in digital and product innovation flowing through. With the reset well advanced, we have assessed our portfolio and decided to divest the Rocla business and are now focused on driving growth and operational performance in our other Australian businesses. The sale process is expected to be completed through calendar 2020.

“We continue to make investments in innovation and local manufacturing to drive long-term, sustainable growth for our shareholders.

“An example of this is the new state-of-the-art plasterboard facility we are building in Tauranga, Bay of Plenty, which we also announced today. The facility is a firm commitment to local manufacturing, which will enable us to meet customer demand for the long term. It will also create around 100 permanent regional jobs and supports our goal of reducing carbon emissions by 30% by 2030.

“Our balance sheet remains strong, with our leverage ratio below the bottom end of our target range.

“In September 2019 we commenced an on-market share buyback of up to NZ$300 million to deliver value to shareholders. We continue to make good progress and have acquired 27.9 million shares for $141 million, representing 3.3% of issued capital.

“The Board has declared an interim dividend of 11 cents per share. This will reflect a more normal first-half, second-half weighting for FY20 and will be paid to shareholders on 9 April 2020.

“As reported at the Annual Shareholders’ Meeting, Group EBIT (excluding significant items) for FY20 is expected to be in the range of $515 million to $565 million with earnings weighted to the second half owing to the Australian cost out programme benefit, residential settlements and improved steel performance flowing through,” concluded Mr Taylor.