Fletcher Building (ASX:FBU) shares dropped another 7% on Wednesday after hours of confusion about whether it should trade during a market briefing.
The halt occurred in New Zealand, and by 10:42 a.m. Sydney time, the company was back on the boards, with the share price sliding lower.
That was after the NZ-based company announced a big loss early in the morning, with impairments totaling over $NZ300 million, along with the departure of CEO Ross Taylor and chair Bruce Hassall.
The loss on Wednesday took the drop in the company’s value to more than 13% since the start of the week. The shares spent more than a day suspended while Fletcher sorted itself and its interim results and decided on the futures of the CEO and the chair.
Fletcher Building announced a net loss of $NZ120 million ($A112.7 million) compared to the previous half-year’s net profit of $NZ92 million ($A86.4 million).
The company wrote down the value of two troubled NZ building contracts by a combined $NZ180 million but surprised with a $NZ122 million impairment of its Australian Tradelink plumbing and building supplies business, which was acquired in the $NZ1 billion takeover of Crane and Co back in 2010.
Crane and Co has now gone, but Tradelink has meandered on under Fletcher’s ownership without setting the world on fire and being out-competed in Australia by the likes of Reece, Bunnings, Mitre 10, and RWC.
Now Fletcher has lost patience, and Tradelink is on the block.
“We have concluded that while we believe there is a compelling opportunity for Tradelink, further ownership of the business is not in line with the strategic objectives of Fletcher Building,” the company said on Wednesday. “Consequently, we intend to commence a divestment process for Tradelink shortly.”
There’s no interim dividend, and unless there’s a significant improvement in the current half, a final payout for shareholders is in doubt.