Fletcher Building has reported a 4% increase in profit for
its trading year to June - which takes into account a $32
million write-down from the sale of Pacific Steel and Hudson
Building Supplies businesses.
Revenue dipped in line with analysts' expectations, from
$8.51 billion last year to $8.40 billion, while earnings
before interest and tax (ebit) grew from $569 million to $592
million and net earnings rose from $326 million to $339
Fletcher is lead contractor in the Canterbury rebuild, where
the peak for earnings potential has been pushed out to the
end of next year, but the company was confident the New
Zealand work backlog in general would boost further earnings
Fletcher Building's chief executive Mark Adamson said the
underlying result was a strong one, despite currency
headwinds and subdued trading conditions in Australia for
much of the year.
''We would have met the top end of our guidance range had the
New Zealand dollar not strengthened the way it has over the
past year,'' Mr Adamson said.
Craigs Investment Partners broker Peter McIntyre said the
result was ''in line'' with expectations, noting strength
from New Zealand and weakness in Australia, and the latter
hit by foreign exchange losses, albeit with expectations of
Demand in New Zealand was expected to remain strong in all
sectors, and positives from the Canterbury rebuild were
expected to continue, Mr McIntyre said.
''In Australia, residential and commercial activity is set to
improve, but the mining and infrastructure sectors will be
subdued,'' he said.
Forsyth Barr broker Andrew Rooney said Fletcher's earnings
were in line with expectations, with a strong New Zealand
performance seeing ebit here rise 27% for the year.
''Activity levels in New Zealand are also highlighted by the
current construction backlog, now at $1.82 billion compared
to ... $1.02 billion at June 2013,'' Mr Rooney said.
The outlook for New Zealand remained ''very positive'',
residential, and non-residential sectors continuing to
benefit from rising activity levels, while Fletcher was
talking of a ''marginally better picture'' for the Australian
Fletcher's outlook said that in the 2015 financial year, the
strong activity levels experienced in the New Zealand market
were expected to continue, noting the Canterbury Home Repair
Programme was expected to be ''substantially complete'' by
the end of December.
''It's expected that further earnings growth will be achieved
in the year ahead, with a strong construction backlog in New
Zealand and further benefits from FBUnite [restructuring],''
the company said.