Announcements     |   11 February 2004

Fletcher Building Half Year Results for the 6 Months Ended 31 Dec 2003

Directors today announced the interim results for the 6 months ended 31 December 2003.  Net profit after tax and minority interests was $111 million, compared to $83 million in the previous corresponding period.  There were no unusual items.

Fletcher Building achieved operating earnings, that is earnings before interest and tax, of $216 million in the six months to 31 December 2003 - 35 percent ahead of the same period in 2002. The result reflected strong demand throughout the period, and ongoing benefits of operational improvements, together with a full 6 months result for Laminex which was acquired on 13 November 2002, and 3 months of Tasman Building Products acquired on the 30 September 2003.

The lift in earnings has enabled a further increase in dividends - the interim dividend will increase to 11.0 cents per share from 9.0 cents per share in the previous year.  Total shareholder return was a creditable 20 percent for the 6 month period.

All divisions either equalled or lifted their operating earnings for the second successive year on a continuing operations basis.   Building Products operating earnings were $74 million (previously $58 million). Concrete earned $42 million (previously $42 million). Construction earned $20 million (previously $16 million). Distribution earned $36 million (previously $27 million). Laminates & Panels earned $48 million (previously $16 million) which includes the earnings of both Fletcher Wood Panels and Scott Panel and Hardware for both periods.

The Chief Executive Officer, Mr Ralph Waters, said "the results highlighted the progress made by the company.  The 23.9 percent annualised return on average funds employed was significantly ahead of the cost of capital. Meanwhile, the Laminex and Tasman acquisitions, both of which continue to exceed acquisition expectations, had transformed the company, from one that was essentially captive to the New Zealand market to a truly Australasian business with enhanced earnings and growth prospects".

Mr Waters said the outlook for the next six months remained positive.  Beyond that directors expect some softening in both the New Zealand and Australian residential building markets, but directors also expect that to be somewhat offset by pent-up demand in alterations and additions, and stronger markets in non-residential and infrastructure construction.

Key Points

  • Operating earnings up 35 percent to $216 million.
  • Group net earnings (after interest, tax and minority interests) up 34 percent to $111 million.
  • Interim dividend of 11 cents per share with full New Zealand tax credits plus 50 percent Australian franking credits.
  • Cashflow from operations up from $127 million to $189 million.
  • Annualised return on average funds employed of 23.9 percent.
  • Earnings per share of 25.9 cents.

Contact:

Ralph Waters
Chief Executive Officer
Phone: +64 9 525 9169
Fax:  +61 9 525 9032

Bill Roest
Chief Financial Officer
Phone:  +64 9 525 9165
Fax:  +64 9 525 9032