Strong performances by Fletcher Building's distribution and building products divisions underpinned a more than 50% gain in half-year after-tax profit, and reaffirmed its full-year financial guidance.
Committed construction contracts have risen from $2billion a year ago to $3.3billion.
Total revenue for the six months to December was up 2% to $4.34billion, earnings before interest and tax (ebit) grew 29% to $288 million and after-tax profit jumped 51% to $172million.
The result included a one-off $10million gain on the sale of Rocla Quarries joint venture assets in Australia.
Fletcher's chief executive, Mark Adamson, said the result was driven by strong performances in the company's building products and distribution divisions, but offset by lower residential development and the timing of key construction contract earnings.
‘‘We saw increased earnings from most of our manufactured building products businesses in New Zealand and Australia, and continued strong growth in earnings from our distribution division,'' he said in a statement yesterday.
Fletcher declared a 19c interim dividend. Following the announcement, its shares were up more than 2% to $7.
Forsyth Barr broker Suzanne Kinnaird said the result was consistent with Fletcher's annual shareholder meeting commentary in November, but ‘‘modestly lower'' than ‘‘our optimistic forecasts''.
Underlying ebit of $278million was down 4% against the previous year.
"Despite better performance in both in Australia and New Zealand, the rest of world dragged on the half-year performance,'' she said.
Formica, in particular, had ‘‘a very challenging six months'' with business unit ebit of just $6million on external revenues of $485million.
However, cash flow generation was robust with working capital gains, after adjusting for land bank costs, Mrs Kinnaird said.
Craigs Investment Partners broker Peter McIntyre said the result was in line with expectations, with conditions in New Zealand remaining supportive and Fletcher improving operations in several business.
‘‘However, the Australian and European environments remain tough.
‘‘Fletcher expects the strong New Zealand conditions to continue in the second half of the year, benefitting the building products business, while Australia is more mixed.
‘‘North America should remain steady, but Europe will be tough,'' Mr McIntyre said.
Mr Adamson said earnings from the residential development business were lower than for the corresponding period last year due to a reduction in earnings from the Stonefields development.
‘‘However, we have made good progress in sourcing new land for future development and in bringing other developments to market sooner,'' he said.
‘‘The outlook for our construction businesses is encouraging, with committed future contracted work now standing at $3.3billion compared with $2billion a year ago,'' he said.
Fletcher affirmed its guidance for the full-year 2016 ebit to a range of $650million to $690million, up from $653million last year.
