Fletcher Building announces hundreds of millions more in restructuring costs
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Fletcher Building has announced hundreds of millions of dollars of new restructuring and impairment costs, and continued a suspension of its dividend as it focuses on paying down debt.
At an investor day briefing it disclosed estimated losses for the current financial year between $573 million to $781m of significant items which will hit its full-year results to be announced in August.
Chief executive Andrew Reding said a strategic review of its businesses revealed the losses.
"We expect FY25 EBIT (earnings before interest and tax -- before significant items) to be in the range of $370m to $375m."
Specific provisions detailed included the already disclosed $251m writedown of its Australian plumbing business Iplex; $58m lost on the sale of Australian distribution business Tradelink; $12m-$15m on the International Convention Centre; $10m-$15m for defending legal action for the West Australian leaky pipes issue; and just disclosed $16.4m loss on the Puhoi to Warkworth highway.
Reding said the additional losses related to restructuring and redundancy costs, goodwill and brand impairments, closure costs and exiting onerous technology contracts.
The company said there would be no dividends for shareholders until its net debt level has fallen to the mid-range of $400m to $900m, when the dividend policy would be reviewed.
The new guidance was subject to market conditions for the remainder of June which is Fletcher Building's financial year-end. The uncertainty in the estimates related to the timing of housing settlements in its Fletcher Living unit.
The company's share price tumbled nearly 4 percent to $2.96 in early trading.
In materials presented for the investor day the company said it had made savings of about $200m and cut staff by about 620 full time positions.
It said its medium term focus would be on manufacturing and distribution of building products and materials, in a simple and decentralised structure.
In February, Fletcher Building reported half-year losses of $134m, and said it expected economic pressures to persist for the remainder of the year.
The strategic review has been aimed at streamlining its businesses in New Zealand and Australia, but it did not release any details of businesses that might be sold.
The company is also being
sued by Sky City Entertainment
for hundreds of millions of dollars over delays in completing the International Convention Centre in Auckland.
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