Fletcher shares down 3pc after profit slump

Shares in Fletcher Building dropped by 3.1 per cent after the company announced that its net profit, before restructuring and impairment charges, fell by 12 per cent to $317 million in the year to June.

The result was near the bottom end of its own earnings guidance, issued in February, which was for a profit of between $310m and $340m.

By 10.50 am, Fletcher Building shares were down 21c at $6.45.

The company said its net earnings - including restructuring and impairment charges - came to $185m for the June year compared with $283m in the previous year.

Restructuring and impairment charges totalled $132m, after tax.

Operating earnings - earnings before interest and tax - were $403m, 18 per cent lower than the $492m achieved in the prior year.

The restructuring and impairment charges included $38m in costs incurred in restructuring the Laminex business, $20m of closure costs for the Formica plant in Bilbao, Spain, and a $74m reduction in the carrying value of the insulation business in Australia.

Fletcher Building said a final dividend of 17c per share, bringing the total for the year to 34c.

In June, Fletcher Building announced that Jonathan Ling would retire as chief executive, effective from September 30.

He is to be replaced by Mark Adamson, the company's chief executive of the laminates and panels division.

Fletcher Building shares closed on Tuesday at $6.66.