New Zealand's biggest listed business, Fletcher Building, has just reported net earnings of $339 million for the June 2014 year, up on last year's $326 million.

The result included significant items totalling $32 million. Net earnings before significant items were $362 million, 11 per cent higher than the prior year.

Operating earnings (earnings before interest and tax) were $592 million, compared with $569 million in the prior year. Operating earnings excluding significant items were $624 million, up 10 per cent on the prior year and within the previously announced guidance range of $610 million to $650 million.

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Significant items of $32 million were incurred during the year principally from the sale of the Pacific Steel and Hudson Building Supplies businesses. The expense reflects the difference between the sale proceeds and asset carrying values together with transaction costs.

Cash flow from operations was $489 million, compared with $559 million in the prior year. The reduction was due to increased residential land acquisition activity in Auckland, higher inventory levels for the Formica plants in emerging markets, and the timing of customer payments for major construction projects

Fletcher, trading this morning around $9.09, is New Zealand's biggest NZX listed company, with a market capitalisation of $6.25 billion.

The building materials manufacturer and distributor with strong positions in residential and commercial construction was picked by Forsyth Barr analysts to make around $355 million normalised net after tax profit and analysts at Deutsche Bank in Sydney to make around $366 million. The peak for the Christchurch rebuild had been pushed out to 2016 and CEO Mark Adamson's restructuring should push up next year's earnings, the Sydney analysts said.

Shares look cheap and Adamson's moves could add $50 million in cost reductions in the 2014 financial year, they forecast.

Fletcher Building Annual Financial Results:

• Revenue $8,401m, down from $8,517m
• Net earnings $339m, up from $326m
• Net earnings before significant items $362m, up from $326m
• Operating earnings (EBIT) $592m, up from $569m
• Operating earnings (EBIT) before significant items $624m, up from $569m
• Cash flow from operations $489m, down from $559m
• Basic earnings per share 49.3 cents per share, up from 47.6 cents
• Basic earnings per share excluding significant items 52.7 cents per share, up from 47.6 cents
• Final dividend 18.0 cents per share, up from 17.0 cents per share


See the latest Fletcher Building financial presentation here: