Described by CEO Mark Adamson as being in “consolidation mode”, Fletcher Building yesterday reported net earnings of $270 million for the year ended 30 June 2015, compared with $339 million in the 2014 financial year.

Buoyed somewhat by strong performances from its NZ divisions (which were +24% on operating earnings), the overall result was nevertheless stymied by “significant items” totalling $150 million.

Said “significant items” included $32 million written down on Forman Group, $30 million on Australia's Stramit, $15 million on Tasman Insulation and $1 million on Humes Pipeline Systems.

 

DISTRIBUTION DOING WELL, MERGING TRANS-TASMAN OPERATIONS

The Distribution New Zealand division (Building Supplies and Steel Distribution) did rather better with $1.76b of gross revenue (+6% on 2014), and a giant +29% added to its EBIT ($108m), thanks to growth in both Building Supplies and Steel Distribution (+9%).

The EBIT of Building Supplies – PlaceMakers, Mico and Forman Distribution – made an even bigger leap (+42% to $75m), detail highlights including Mico turning around from a loss of $2m to a profit of $7m (including a property gain of $3m) and +26% in PlaceMakers earnings.

Distribution Australia’s operating earnings were $18 million, +6% on the prior year, although revenue in domestic currency was –8% on the prior year (AU$766m), due mainly to the sale of Hudson Building Supplies. Tradelink revenue, excluding Hudson Building Supplies was (AU$732 million or +3% on the prior year).

Related news is Fletcher Building’s 3 August announcement that it would be combining its NZ and Australian distribution businesses into a single division.

Distribution NZ CEO Dean Fradgley will therefore be taking an Australasian view of things, with recruiting a GM for struggling Tradelink across the ditch an obvious priority.