Fletcher Building today reported net earnings before unusual items of $359 million for the year ended 30 June 2011. The result compares with $301 million recorded in the previous year.
Operating earnings (earnings before interest and tax) pre-unusual items were $596 million, up 14 percent on the $521 million achieved in the previous year. Results included three months of operating earnings from Crane Group Limited (“Crane”) which was acquired during the year. Consistent with the announcement in March, net earnings were approximately $20 million lower than earlier market guidance due to the disruption caused by the earthquakes in Canterbury.
Unusual items after tax totalling $76 million were incurred during the year. These relate to costs associated with the acquisition and restructuring of Crane, inventory and goodwill write-downs in the Australian insulation business, and adjustments to the carrying value of other assets. Net earnings were $283 million compared with $272 million in the previous year.
Cashflow from operations was $402 million compared with $522 million in 2010, with the reduction due principally to an increase in working capital.
A final dividend of 17.0 cents per share will be paid on 19 October 2011, with full New Zealand tax credits attached, bringing the total dividend for the year to 33.0 cents per share.
Chief Executive Officer Jonathan Ling said the result reflected the very mixed trading conditions seen in the key markets in which Fletcher Building operates.
“The result was driven by strong performances in our Infrastructure and Laminates & Panels divisions, together with the initial contribution from Crane”, Mr Ling said.
“Most divisions reported stronger trading performances from their Australian operations. Formica also reported good growth from its Asia operations and a strong improvement in North American earnings despite flat volumes in that market.
“Businesses exposed to the New Zealand market generally reported flat or lower earnings, as a consequence of the slowdown in construction activity seen during the course of the year and also as a result of the significant disruption from the earthquakes in Canterbury”, Mr Ling said.
“Market conditions have been tougher than we anticipated at the start of the year, with no recovery evident in New Zealand, and Australia showing clear signs of having slowed in the second half. Looking ahead, we remain uncertain around the timing and pace of a recovery in the New Zealand construction industry, but are well positioned for the upturn when it comes”, Mr Ling said.
“The inventory and goodwill write-offs in our Australian insulation business are disappointing. We’ve seen significant disruption to the market since the termination of the government’s retrofit insulation scheme last year and no sign of any improvement. As such, we have had to confront the financial reality and adjust asset values accordingly”, Mr Ling said.
Results overview
Total revenues of $7,416 million, up from $6,799 million in 2010
Operating earnings before unusual items increased to $596 million from $521 million in 2010
Net earnings excluding unusual items of $359 million, up from $301 million in 2010
Net earnings of $283 million, up from $272 million in the previous year
Cashflow from operations of $402 million, compared with $522 million in the prior year
Final dividend of 17.0 cents per share with full New Zealand tax imputation credits giving a total dividend for the year of 33.0 cents per share
Interest cover at 5.1 times
Basic earnings per share excluding unusual items were 57.1 cents, up 15 percent on the 49.7 cents in the prior year
Total shareholder return for the year was 14 percent, compared with 24 percent in the prior year
The dividend reinvestment plan will be operative for this final dividend payment
For further information please contact:
Philip King
General Manager
Investor Relations
Phone: + 64 9 525 9043
Mobile: + 64 27 444 0203
ENDS