Announcements     |   20 February 2013

Fletcher Building Half-Year Results for the Six Months Ended Dec 31, 2012

Fletcher Building today announced its unaudited interim results for the six months ended 31 December 2012. The group recorded net earnings after tax of $146 million, compared with $144 million in the prior corresponding period.

Auckland, 20 February 2013 – Fletcher Building today announced its unaudited interim results for the six months ended 31 December 2012.  The group recorded net earnings after tax of $146 million, compared with $144 million in the prior corresponding period. 

Operating earnings (earnings before interest and tax) were $262 million, 2 per cent higher than the $256 million achieved in the first half of the 2012 financial year. Cashflow from operations was up strongly at $204 million compared with $129 million in the prior period.

The interim dividend will be 17.0 cents per share. In line with the company’s approach to allocating tax credits, the dividend will be fully franked for Australian tax purposes but will not be imputed for New Zealand tax purposes.

Total revenue for the group decreased 3 per cent to $4,380 million, in part due to the sale of several businesses in the past year.

Chief Executive Officer, Mark Adamson, said the result was driven by improved trading conditions in New Zealand, offset by weak construction markets in Australia and the costs of further restructuring.

“The pace of new residential construction in New Zealand has improved substantially over the past six months in both Canterbury and Auckland, and this has positively impacted those businesses exposed to this sector. In addition, we have seen strong momentum in rebuilding activity in Canterbury. These factors drove a 31 per cent increase in our New Zealand operating earnings,” Mr Adamson said.

“By contrast, in Australia, weak market conditions have continued in the residential and commercial construction sectors. Most of our Australian businesses experienced volume declines and as a result Australian operating earnings declined by 12 per cent,” Mr Adamson said.

In other regions, results were mixedwith revenues ahead in South East Asia, flat in North America, and down in China and Europe.

During the period, further restructuring was undertaken in a number of businesses including Laminex and Stramit in Australia. The consolidation of Formica’s operations in Spain was completed with the closure of the Bilbao plant, with additional costs incurred of $3 million beyond those provided for previously.

Mr Adamson said good progress had been made in establishing the business transformation programme which was outlined at the annual shareholders meeting in November. The programme involves a systemic review of the existing business model and will encompass a fundamental redesign of how products and services are delivered. The programme includes work streams around shared services, procurement, distribution, logistics, operational excellence and digital strategy.

“While it is early days, we have made an excellent start in commencing a number of these work streams. Our goal is to further improve our competitiveness. While we expect some gains from these initiatives to accrue in the next financial year, this is a multi-year transformation programme and we expect that the scale of the benefits will continue to evolve and will take longer to flow through the business,” Mr Adamson said.