KEY POINTS:
Construction giant Fletcher Building has reported a full year net profit of $484 million, up 28 per cent from $379 million the previous year.
The increase of $105 million, after tax and minority interests, for the year to June 30 included a $70 million one-off taxation benefit previously
advised to the market, the company said.
Operating earnings - before interest and tax - were up 4 per cent to $703 million, including a net $5 million of unusual items.
The increase reflected some benefits from acquisitions, ongoing productivity improvements and the unusual items, with some offset due to more difficult market conditions, the company said.
The lift in earnings had enabled the eleventh consecutive dividend increase, with a final dividend of 23 cents per share, with full New Zealand and Australian tax credits. The total dividend for the year increased from 40cps to 45cps.
Chief executive officer Jonathan Ling said the increase in operating earnings in a softer trading environment provided further validation of the group's strategy to build earnings reliability.
"The balance of exposures between different geographical regions and market sectors is serving us well," he said.
"All our divisions have performed well in the market conditions applying to them.
"At the same time we have been successful in further implementing our strategic objective to internationalise the company and provide a wider range of growth options, following the recent acquisition of Formica Corporation."
Looking ahead, the company said new housing consents were forecast to decline by 8 to 12 per cent in the current year.
That decline would be offset by a backlog of work, unsatisfied demand for alterations and additions, and ongoing commercial construction activity.
Infrastructure activity was expected to continue at similar levels to those in the latest year.
In Australia, housing was in a cyclical decline with New South Wales at very depressed levels, offset in part by strength in Queensland and Western Australia.
A gradual recovery was expected in Australian residential construction, while growth in non-residential building was expected to slow. Infrastructure markets were expected to vary in strength from state to state, with engineering construction continuing to grow strongly.
The residential and other commercial markets served by Formica Corporation in Europe and Asia were anticipated to remain strong, with some weakness in North America, Fletcher said.
Fletcher announced in May that it was buying US-based Formica for US$700m ($930.5m), making it the world leader in laminates.
Today Fletcher said that overall, Formica was expected to have a positive impact on normalised earnings per share in the current year, helped by synergies achieved in the integration with Fletcher's Laminex business.
Two analysts had predicted net profits of $462m and $493m. Fletcher Building shares closed at $12.60 yesterday, having ranged between $8.25 and $13.42 in the past year.
- NZPA