It was always going to be a significant loss for Fletcher Building (ASX:FBU) for the year ending June 30. The departure of the CEO, chair, and other directors and managers is a strong indication that the results will be worse than initially anticipated.
Therefore, there will be no dividend for the year ending June 30, and judging by the guarded outlook, the resumption of dividends depends on the state of the construction and building industries on both sides of the Tasman.
The interim CEO, Nick Traber, provided a cautious outlook on Wednesday, ahead of the new CEO starting at the end of September. In fact, the outlook suggests that the year ahead will be more challenging operationally than 2023-24, although the company hopes to avoid similar one-off problems.
“We anticipate that the coming year will remain challenging, with macroeconomic pressures likely to persist throughout the year. At this point, we are planning for market volumes in our materials and distribution businesses to be 10% to 15% lower year-on-year compared to FY24. However, we remain vigilant to further market weakness.
“In this environment, we will continue to focus on tightly managing costs and cash flows. We will also prioritise protecting our people, delivering on our promise to customers, and positioning our businesses well for when our markets return to growth.”
Group revenue from continuing operations of NZ$7,683 million was flat year-over-year, with higher revenues in Residential and Development and Construction offset by significantly lower revenues in materials and distribution divisions.
EBIT decreased 35% to NZ$509 million compared to NZ$785 million in FY23, but within the guidance range. The company’s EBIT margin from continuing operations fell sharply to 6.6%, from 10.2% in the previous year.
The company incurred significant items of NZ$333 million from continuing operations (mainly FCC legacy provisions and Higgins impairment) and a net loss of NZ$141 million from Tradelink (discontinued operations, including impairments).
As a result, the company reported a net after-tax loss of NZ$227 million, compared to a net after-tax profit of NZ$235 million in 2022-23.