Fletcher Building turns losses to profits, no dividend reinstatement yet

The business had moved at pace to improve and the strategic reset last year was now starting to deliver tangible results.

Fletcher Building chief executive Andrew Reding (left) with Prime Minister Christopher Luxon at the NZICC opening in February this year. Photo / Michael Craig

“Our portfolio has been simplified with the divestment of the construction division and other non-core operating units, and we used the proceeds to strengthen our balance sheet,” he said.

The company has raised $450m for debt repayment from many asset sales under Reding.

Those are the sale of its construction business for $315m, Fletcher Reinforcing and Wire for $15.7m, South Australian property for A$20.05m ($24m) and Laminex Cheltenham property for A$53.8m.

The board has kept dividends suspended.

That policy will be reset only once the group is generating positive free cashflow and is in the lower half of the net debt target range, Reding said today.

Reding gave a relatively downbeat outlook for this current financial year. Photo / Michael Craig

Group earnings per share of 21.2c were positive for the first time since 2023.

Core manufacturing divisions performed well in a difficult trading environment, Reding said.

“There is still more work to do to achieve our targeted returns on capital. However, the group is now more focused, more resilient and better positioned to benefit once market conditions start to recover,” Reding said.

The group is actively progressing with selling its Vivid Living retirement village operations.

New Vivid Living homes beside where Fletcher has built many houses at Red Beach. Photo / Greg Bowker

The board has decided that Vivid met the requirements to be classified as held for sale, the company said today.

Winstone Wallboards’ sales volumes rose 4% annually, led by a strong South Island market where sales rose 11% as well as renovation activity.

PlaceMakers’ frame and truss volumes improved and internal production rose 27%.

Reding issued a relatively downbeat outlook.

House prices remained under pressure, with inventory levels high. The impact on new build activity uncertain, although there is a robust additions and alterations market.

Heightened levels of New Zealand residential consenting reflect pent-up demand that should be realised, however, timing remains uncertain.

Market volumes recovered gradually through the second half of the 2026 financial year but the economic, political and geopolitical backdrop remains uncertain, he said.

That was expected to weigh on performance in the first half of FY27. A meaningful recovery in underlying volumes is not expected until calendar year 2027, Reding said.

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