Fletcher Building's latest result not all "consolidation"

By NZHJ August 20, 2015 Industry News

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.



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.

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