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Fletcher Building (ASX:FBU) has confirmed significant losses for the fiscal year ending June 30, with the departure of the CEO, chair, and several key directors signaling that the results are even worse than initially expected.
As a result, there will be no dividend payout for the year, and the prospect of resuming dividends will depend heavily on the health of the construction and building sectors in both Australia and New Zealand.
Interim CEO Nick Traber provided a cautious outlook on Wednesday, ahead of the new CEO's arrival at the end of September. Traber hinted that the upcoming fiscal year may pose even greater operational challenges than FY23-24, though the company aims to avoid repeating the one-off issues encountered.
"We expect the year ahead to remain challenging, with macroeconomic pressures likely to persist," Traber noted. "Currently, we anticipate market volumes in our materials and distribution businesses to be 10% to 15% lower year-on-year compared to FY24. However, we are prepared for further market weakening.
"In this environment, we will continue to focus on tightly managing costs and cash flows. Our priority will be protecting our people, delivering on our commitments to customers, and positioning our businesses for growth when the market recovers."
Group revenue from continuing operations was NZ$7,683 million, flat year-over-year, with increased revenue in Residential and Development and Construction offset by a sharp decline in the materials and distribution divisions.
EBIT fell by 35% to NZ$509 million, down from NZ$785 million in FY23, but still within the company's guidance range. The EBIT margin from continuing operations dropped significantly to 6.6%, compared to 10.2% the previous year.
The company also reported significant charges totaling NZ$333 million from continuing operations, largely due to FCC legacy provisions and Higgins impairment, along with a net loss of NZ$141 million from Tradelink, which is classified as discontinued operations.
