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NZ Herald
04-08-2025
- Business
- NZ Herald
Possible sale of Fletcher Construction end of a proud building era
The books are said to be a 'story of war and peace, of success and failure, and how New Zealand's premier builder coped in the face of many challenges'. Fletcher Construction may soon be sold and analysts suggest it could be worth up to $340 million. Photo / Getty Images Today's Fletcher Building is a shadow of the former Fletcher Challenge of the last century. And Fletcher Construction itself is a shadow of what the great company once was. Fletcher flagged the potential Fletcher Construction sale at its investor day on June 11 and again on July 22 in an NZX notice. Fletcher Construction is: Higgins, the civil construction company that Fletcher bought in 2016; Brian Perry Civil, bought by Fletcher in 1986; Fletcher Construction (major projects) division, part of the original 2001 float on the NZX. Fletcher Living, the company's home-building business, is not included in the sale. Fletcher Living doesn't come under Fletcher Construction. It is a separate division, headed by the accomplished, experienced Steve Evans, in that role for more than a decade. Andrew Reding heads Fletcher Building and is looking at divestment options for the Construction businesses. On the possible Fletcher Construction sale, CEO and MD Andrew Reding said in July: 'Given the quality and strong recent performance of our Construction businesses, and the role they will play in New Zealand's growing infrastructure pipeline, we were not surprised to receive inbound interest for them, which has motivated us to test whether there are attractive divestment options. 'No decision has been made to sell at this time, and we will carefully consider the value of any options presented from this process before deciding whether to move ahead.' The business says Fletcher Construction has 3700 staff working across the three brands. 'Since 1909, our people have planned, built, maintained and managed significant national infrastructure for the benefit of communities in New Zealand and the South Pacific. We have safety at our core and invest in innovation for the future,' Fletcher Construction said. In more recent years, Fletcher Construction had three jobs that caused problems: Auckland's new $1 billion-plus NZ International Convention Centre for SkyCity; Auckland waterfront's Commercial Bay for Precinct Properties; Justice & Emergency Precinct in Christchurch. In 2018, the Herald reported on 14 of 73 projects on its books that are loss-making or on watch. SkyCity Entertainment Group's NZ International Convention Centre has been a problem project for Fletcher Construction. Photo / Michael Craig Jobs had gone over the original bid cost and taken far longer than expected. Underbidding and lack of information flow to the board were two issues blamed then. The now former-CEO Ross Taylor said in 2018 that Fletcher Building would not be bidding for any further vertical construction work in New Zealand while it concentrated on completing existing projects. The company said at the time that the building and interiors market 'continues to be characterised by high contract risk and low margins', adding, 'we will no longer work in these conditions'. SkyCity is suing Fletcher Building and the Fletcher Construction Company for $330 million, saying it had taken 10 years instead of three to build the NZICC. The claim seeks damages for losses incurred by SkyCity arising from ongoing delays in the completion of the project, including those that resulted from the 2019 fire. In response, Fletcher said it had already flagged risks associated with the convention centre, it was committed to delivering the project and would vigorously defend itself. But SkyCity said the NZICC was now nearly six and a half years behind the contractually agreed delivery date of January 2019. Despite its problems, Forsyth Barr analysts have estimated Fletcher Construction could be worth $230m to $340m. More may be said about the sale at the company's annual results announcement on August 20. Anne Gibson has been the Herald's property editor for 25 years, written books and covered property extensively here and overseas.
RNZ News
21-07-2025
- Business
- RNZ News
Fletcher Building considers sale of its construction division assets
Fletcher Building was considering selling off some assets. (File photo) Photo: supplied Fletcher Building is considering the sale of its construction division assets following a strategic review of the business. The company said it was exploring potential divestment options for its Higgins, Brian Perry Civil and Fletcher Construction Major Projects business units, including the appointment of financial advisers. The company was testing the market, though no decisions had been made to sell, Chief executive Andrew Reding said. "Given the quality and strong recent performance of our construction businesses, and the role they will play in New Zealand's growing infrastructure pipeline, we were not surprised to receive inbound interest for them, which has motivated us to test whether there are attractive divestment options. "We will carefully consider the value of any options presented from this process before deciding whether to move ahead." Last month Fletcher Building announced hundreds of millions of dollars of new restructuring and impairment costs. 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. Sign up for Ngā Pitopito Kōrero , a daily newsletter curated by our editors and delivered straight to your inbox every weekday.
RNZ News
23-06-2025
- Business
- RNZ News
Fletcher Building announces hundreds of millions more in restructuring costs
Fletcher Building chief executive Andrew Reding said a strategic review of the business revealed its losses. Photo: Supplied 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. Sign up for Ngā Pitopito Kōrero , a daily newsletter curated by our editors and delivered straight to your inbox every weekday.
RNZ News
10-06-2025
- Business
- RNZ News
Fletcher Building selloff generating interest, company says
In a brief statement to the NZX, Fletcher said its review was creating interest (file image). Photo: RNZ / Cole Eastham-Farrelly Potential buyers are lining up to buy Fletcher Building businesses. New chief executive Andrew Reding initiated the review as the company sought to improve its financial performance. In a brief statement to the NZX, the company said its review was creating interest. "Fletcher Building advises that, following the announcement of the strategic review, it has received ongoing inbound inquiries from parties interested in its businesses, including the construction division, amongst others. "The company advises that no decisions have been made to sell any of its businesses." It said it would give more details at an investor day later in the month. The construction division has been a source of major losses for the Fletcher group, and is at the centre of a $330m lawsuit by casino company SkyCity Entertainment over delays in completing the build of the International Convention Centre in Auckland. The company has previously signalled that it would look at its residential business, and last year sold Australian assets . It has also restructured its operations by abolishing specific Australian operations and bringing them into unified trans-Tasman units. Sign up for Ngā Pitopito Kōrero, a daily newsletter curated by our editors and delivered straight to your inbox every weekday.
