The principle drivers for the softer performance were continued weak demand across key markets and heightened competitive activity, particularly in the New Zealand market, he said.
Andrew Reding issued a quarterly update today. Photo / Fletcher Building
A divisional update showed volumes of light building products below the prior corresponding periods. The volumes within Australia’s Laminex and Iplex were well down, he said.
Pronounced volume contractions had hit heavy building materials, and Reding cited Winstone Aggregates volumes down 4.1%.
In the distribution division, PlaceMakers Frame & Truss volumes were flat to marginally higher but margins contracted because of competitive trading conditions.
In the residential division, 88 housing and units were sold in the latest quarter compared to 90 in the previous quarter.
Reding said further cuts were planned.
“Given the continued deterioration in market conditions, we continue to carefully examine our cost base with a further cost-out programme targeting c.$100m in annualised savings,” Reding said.
About $50m in benefits were expected to be realised in the second half of FY26, with full annualised savings to be achieved in FY27, he said.
The company anticipated market conditions to remain challenging throughout the rest of the financial year through to June 30, 2026, with continued uncertainty on the timing of recovery in the residential sector.
Recent interest rate cuts by the Reserve Bank should support greater liquidity in the New Zealand housing market and there were some signs of steadying or improving market conditions in Australia.
“In the meantime, management remains focused on cash preservation, cost discipline, and maintaining a strong balance sheet to support the business through the downturn, and to position the group strongly for improved operating leverage when markets improve,” the business announced.
The company wants to sell Fletcher Construction but nothing has been announced on any deals yet.
Fletcher’s annual shareholder meeting is at 10.30am on October 22 at Eden Park.
Anne Gibson has been the Herald‘s property editor for 25 years, written books and covered property extensively here and overseas.