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Highlights
- Fletcher Building posted a strong FY21.
- FBU is focused to drive medium-term growth with investments in base numbers.
- The Group remains on track to deliver key objectives for continued performance.
Fletcher Building Limited (NZX:FBU) posted a robust FY21, reporting net earnings of $305 million and revenue of $8.1 billion for the period.
The Group also fared well across all aspects of cash management through the financial year. FBU had a strong balance sheet at the end of FY21, with net debt of $173 million and liquidity of $1.6 billion.
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The strength of the balance sheet also permitted FBU to encourage share buyback, new wallboards plant and required inventory rebuild.
Growing pipeline of opportunities
Fletcher is looking at a growing pipeline of more solid prospects. Some of these are as follows:
- Growing residential housing business by nearly 550 housing units annually over the next 3 years.
- Scaling up its offsite housing manufacturing business, Clever Core, to get new business and use lesser annual working capital for every house.
- Introducing ground volcanic rock into its standard concrete mixes to lower embedded carbon and win more market share through greener concrete.
- Disrupting the kitchen cabinetry market with FBU’s Haven Kitchen’s offer in Australia.
The Board also remains focused on propelling strong results across a variety of ESG measures and drives a performance culture on safety, sustainability and innovation.
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The Group continues to make progress to lower carbon emissions by 30% by 2030. FBU also plans to advocate investment in all parts of its value chain to increase the strength of its business.
FBU on track to deliver its EBIT margins
The Group remains on track to get its overall EBIT margins to near 10% by FY23. The Group plans to achieve this by raising margins in Australia into the 5-7% range, lifting construction margins to more than 3% and propelling margin expansion across NZ core businesses.
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The Group also remains focused on driving top-line growth. FBU’s growth efforts include new products, new localities, customer services that can be expanded, and increasing its e-commerce sales volumes.
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FBU has set aside nearly $50 million to $100 million of its base capex spend, and around $30 million to $40 million of its base overhead spend each year to maintain its growth focus and momentum.
On 13 December, FBU ended the trading session at $7.18, up 1.7% from its previous close.
Bottom Line
Fletcher’s operating fields and business situations remain in a good shape, leaving it well positioned in the present environment to propel ongoing performance improvements and growth.
(NOTE: Currency is reported in NZ Dollar unless stated otherwise)