Fulton's managing director, Nick Miller, yesterday rebutted speculation in the Australian Financial Review that the Dunedin-founded company was being prepared for sale because it had engaged the services of investment banks Credit Suisse and its New Zealand counterpart, First NZ Capital.
Mr Miller said the paper's speculation that Credit Suisse was aboard to sell the company ''was totally incorrect''.
''As part of standard, prudent governance, the investment banks concerned are simply advising on options to optimise Fulton Hogan's balance sheet,'' he said in a brief statement yesterday.
Finance sector sources, who did not want to be named, fuelled further speculation, suggesting Credit Suisse's involvement might be to advise Fulton Hogan on raising bonds in the debt market, or floating Fulton assets on the sharemarket.
''There's another angle, in that Fulton could be considering off-loading underperforming Australian assets,'' a source said.
Attempts were made to contact Mr Miller yesterday but the company declined to elaborate beyond the statement released.
A month ago, Fulton released guidance that it had ''performed strongly'' in the first half of the 2012-13 year, but gave no financial details other than repeating that its strongest-ever forward-order book stood at $3.7 billion.
While Fulton has its brimming $3.7 billion of orders, its full-year result to the end of June last year booked staggering declines in before-tax and after-tax bottom lines, plunging the company into its worst result for a decade.
Led by a variety of woes in Australian operations, Fulton Hogan's earnings before interest, tax, depreciation and amortisation plunged 47% to $130.9 million and after-tax profit crashed almost 90%, from $73.9 million to $7.9 million.
The finance-sector source noted Fulton Hogan's predicament reflected other New Zealand companies' attempts to ''rush into markets'' in Australia only to have to retreat, when they could have trialled taking a ''more modest'' share in the sector of interest.
Mr Miller said last year that while revenue during the previous financial year was $1 billion from New Zealand and $1.7 billion in Australia, the Australian construction business posted losses.
That was due to management challenges, prolonged wet weather, growing pains from an earlier acquisition, underperforming projects and restructuring costs to address performance issues and stabilise the company.
His statement yesterday said Fulton Hogan had a strong, stable and committed shareholder base and ''no current or foreseeable plans for fundamental changes to our ownership'' beyond the buy-back of the cornerstone Shell shareholding that had been in train since 2009.
Mr Miller said in November last year that management restructuring and cost-cutting had been put in place, as had the sale of non-core assets, including land in Queenstown and elsewhere and an almost 3000ha forest block in Otago. These assets totalled more than $10 million, he said.
All those measures meant Fulton Hogan would ''not be undertaking any form of capital-raising [from shareholders or elsewhere]'', he said at the time.
When asked to describe banking relationships and covenants, he said they were ''strong''. Some of the five banks concerned had been with the company for more than 50 years and they were being supportive, given the order book stood at $3.7 billion.
