Fletcher Building today provided an update on year-to-date trading for its 2021 financial year. Trading for the four
months ended 31 October 2020 (“the period”) compared to the four months ended 31 October 2019 (“the comparative period”)
(unaudited results):Group revenues up 1%Group EBIT before significant items of $227 million, up $80 millionGroup EBIT margin up 2.9ppts to 8.4% due to improved operating efficiencyCash flow and balance sheet remain strong: net debt $388 million, liquidity $1.4 billion as at 31 October 2020
Group revenues for the period were 1% ahead of the comparative period, supported by resilient trading conditions in both
New Zealand and Australia, especially in the residential sector. Revenues in the New Zealand Core were up 4%, with
businesses exposed to finishing trades particularly resilient. Demand for new houses has been robust, with 342 units
taken to profit in the Residential business, consistent with the Group’s objective of achieving 700-800 house sales for
the full year. In Construction, the portfolio of work continues to be rebalanced to a lower-risk model, with Fletcher
Construction being preferred on further major government alliance work in the period. In Australia, revenues were
slightly lower than the comparative period, with softer demand in the civil segment and COVID-19 restrictions impacting
Victoria.
Group EBIT before significant items of $227 million was $80 million or 55% higher than the comparative period. This was
achieved predominantly through a 2.9ppts lift in profit margins across the Group, reflecting the operational performance
and efficiency programs implemented over the last two years.
Earnings in the New Zealand Core were up 30%, led by the Concrete and Building Products divisions. Residential and
Development earnings were materially higher due to strong house sales, while planned Land Development transactions
remain on track for completion in the remainder of FY21. Construction earnings were in line with the comparative period.
Earnings in Australia increased as cost-out benefits offset the lower overall revenues. Corporate costs remain
well-controlled and were slightly lower than the comparative period.
Group cash flows and the balance sheet remain strong, with Group net debt at $388 million and available liquidity of
$1.4 billion at 31 October 2020.
Commenting on the year-to-date performance and expected trading conditions for the remainder of FY21, CEO Ross Taylor
said: “Through all the disruption and uncertainty of the past year, our people have adapted and responded superbly,
maintaining a focus on delivering for our customers. We were heavily impacted in FY20 by the COVID-19 restrictions,
resulting in a significant earnings loss for the Group of $196 million, so we are pleased to have begun the new year
well. As we look ahead, our customers are pointing to volumes remaining at current levels through to the start of the
new calendar year. However, there is uncertainty in the second half of the financial year, with the impact of broader
macro-economic factors on our markets in New Zealand and Australia not yet clear. Also, December and January are always
lower trading and earnings months for the Group. At our Annual Shareholders Meeting on 25 November 2020, we intend to
provide earnings guidance for 1H21. We will update further on trading conditions at our half-year results announcement
on 17 February 2021 and at an investor day planned for May 2021.”Gross Revenue($m, unaudited)4 mths ended 31 Oct 194 mths ended 31 Oct 20Change (%)Concrete2712876%Building Products4484654%Distribution5595753%NZ Core1,2781,3274%Residential and Development12323390%Construction503425-15%Australia1,026967-6%Intercompany and other(247)(254)-3%Group (external revenue)2,6832,6981%EBIT before significant items($m, unaudited)4 mths ended 31 Oct 194 mths ended 31 Oct 20Change (%)Concrete334332%Building Products547232%Distribution354324%NZ Core12215830%Residential and Development2143108%Construction03NMAustralia243965%Corporate(20)(16)15%Group14722755%EBIT margin(%, unaudited)4 mths ended 31 Oct 194 mths ended 31 Oct 20Change (%pts)Concrete12.1%15.1%3.0%Building Products12.1%15.4%3.3%Distribution6.3%7.5%1.2%NZ Core9.5%11.9%2.4%Residential and Development16.9%18.6%1.7%Construction0.0%0.7%0.7%Australia2.3%4.0%1.7%Group5.5%8.4%2.9%Conference call to be held today
Fletcher Building management will host a Q briefing for all investors and analysts today at 12 noon NZDT / 10:00am AEDT to discuss the trading update. Participants can register for the conference by navigating to the following link:
Upon registration you will be provided with the dial in number, passcode, and your unique access PIN. To join the
conference simply dial the number and enter the passcode followed by your PIN, and you will join the conference
instantly.
A replay facility will be available after the conference call:
Australia: 1800 265 784 / +61 7 3107 6325
New Zealand: 0800 886 078
Hong Kong: 800 930 639
Singapore: 800 101 3223
UK: 0800 031 4295
US/Canada: 1855 883 1031
Replay PIN: 10010803