Fletcher will get no profit from convention centre

Fletcher Building will make no profit from building Auckland's International Convention Centre or Christchurch's Justice Precinct and had not expected to win both projects, chairman Sir Ralph Norris said today.

Speaking after the company's annual meeting where the board was questioned by shareholders, including former Shareholders Association chairman Bruce Sheppard dressed as a priest, Norris was clear.

"We will not be making any profit or margin [from the convention centre]. The same is true from the Justice Precinct."

Norris said later during a conference call with analysts that the company had not expected to win both contracts.

The company advised shareholders that its Buildings and Interiors division (B+I) would incur an estimated loss of $160 million in the current financial year.

About $100m of that was due to losses on the Justice Precinct and Convention centre.

"It is fair to say that we probably did not expect to win both contracts," Norris said during the call.

"Even though the board was very exercised about whether or not we had the resources to be able to undertake those contracts simultaneously, the previous management of B+I was very certain and gave the assurances that that could actually be achieved," he said.

"That has proven not to be the case," Norris said.

This loss at B+I will drag down Fletcher's full year profit to a range of between $520m to $560m.

The company has put in place a new management team and a significantly improved bid process which involves direct oversight by the board to prevent similar situations from occurring again.

But Norris said he could not give any "cast iron" promises that the losses attributed to the convention centre wouldn't increase in coming years.

The convention centre isn't due to be completed until 2019.

Salt Funds Management's Matt Goodson questioned whether or not this was "the last hit" for the construction business.

"That would probably be a brave call at this point"

During the meeting the board was also questioned about its lack of diversity - it only has one female board member - and lack of construction experience.

Sir Ralph said up until recently it had had two woman board members but one had recently been poached by another construction firm.

The board was looking to appoint two new members and one would have construction experience. It was also looking to broaden its diversity.

New director Bruce Hassell, a former chief executive of PwC, was re-elected to the board but not before colourful shareholder Sheppard had his say.

Sheppard said Fletcher Building had still not learned lessons of the past - that bigger was not beautiful, all that glistens was not gold and that too much debt always killed companies.

He described the meeting as an A&E meeting - one of absolution and exorcism - and called for the audience to vote on whether they absolved the board for its mistakes which was met with a luke-warm response.

Sheppard said he gave his personal support to the board and hoped other shareholders would continue to support it.

But he hoped to see the company's margins improve from here.

Norris said a lot of effort had gone in to ensure it did not repeat past mistakes.

Hassell was re-elected while fellow director Cecilia Tarrant was also under pressure from the Shareholders Association which believed she should leave the board as she was the only person from the audit and risk committee to be standing for re-election and should be held to account.

Despite the pressure Tarrant was re-elected.

Fletcher's shares fell more than 5 per cent at market opening regained some ground during trading and close for the day down 3.64 per cent at $7.67.