Announcements     |   12 February 2003

Fletcher Building Limited Half Year Results for the 6 Months Ended 31 Dec 2002

Fletcher Building achieved operating earnings (i.e. earnings before interest and taxation) of $160 million in the six months to 31 December 2002. The result included an $8 million contribution from the Laminex group, acquired on 13 November 2002.

The latest result continues a trend of strong earnings growth over the past two years, driven by internal improvement programmes and buoyant market conditions. Operating earnings before unusual items had been $78 million in the 6 months to 31 December 2001, and $127 million in the six months to 30 June 2002.

Net earnings (i.e. after taxation and minority interests, and after unusual items) were $83 million in the latest six months, compared with $41 million in the December 2001 period and $93 million for the full 2002 year.

The result has enabled the company to further increase dividends. The interim dividend will be 9 cents per share, with full tax credits, compared with 6 cents per share for the interim period one year earlier and 8 cents per share for the subsequent final dividend.

The Chief Executive Officer, Mr Ralph Waters, said all divisions of the company had lifted earnings in the December half-year. "Market conditions in both New Zealand and Australia remained strong, and our operations were positioned well to take advantage of this following improvements in operational efficiency, overheads and prices during the past two years."

"From a strategic point of view, the highlight of the period was clearly the acquisition of the Laminex group in Australia, which diversified the company's revenue and earnings base. The sale of the company's operations in Bolivia was also a significant development. These changes were accompanied by a series of initiatives to provide acquisition funding and refinance the company's existing borrowings."

Mr Waters said the operational performance of the company remained strong. It was possible that economic growth in both New Zealand and Australia could begin to level off within the second half of the current financial year, and that earnings will be affected by the strength of the New Zealand dollar against the Australian and other currencies. Overall, however, another satisfactory full year result is anticipated.

Key Points

  • Operating earnings up 105% to $160 million
  • Net profit after tax and minority interests up 102% to $83 million
  • Operational cash flow up from $56 million to $127 million (including $16 million from Laminex)
  • Annualised return on average equity of 24.5%
  • Annualised earnings per share of 44.8 cents
  • Acquisition of the Laminex group
  • The sale of the operations in Bolivia
  • Major refinancing completed
  • Interest cover improved from 5.8 times at 30 June 2002 to 8.8 times

Dividend

  • Interim dividend of 9 cents per share, with full tax credits

Outlook

  • Operational performance remains strong
  • Possibility of slower market growth beginning during the current half year
  • Some negative impact from the increase in the New Zealand dollar
  • Another satisfactory full year result is anticipated
  • Full details on the company's trading results are attached.

For further information, please contact:

Ralph Waters
Chief Executive Officer
Telephone  + 64 9 525 9169
Fax  + 64 9 525 9032

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