Fletcher Building has made a $190 million loss, only the second time since listing on the NZX in 2001 that it slipped into the red, shareholders will get no dividends for the full year and no trading update has been provided.

The company with a market capitalisation of $5.8 billion this morning released its annual result for the year ended June 30.

It declared a loss of $46m in 2009 and said today FY19 earnings guidance would not be provided until the annual shareholders' meeting later this year.

The $190m loss for the June 2018 year is a big turnaround from the $94m profit for the June 2017 year.


"In line with the company's dividend policy to pay dividends in the range of 50-75 per cent of net earnings before significant items, no final dividend was declared in FY18. The company expects, subject to satisfactory trading performance, to be in a position to resume dividends in FY19," it announced to the NZX this morning.

"FY19 earnings guidance will be provided at the 2018 annual shareholders meeting," it said.

Operating earnings - before significant items, and excluding Building + Interiors - were $710m which Fletcher said was within the company's earnings guidance of $680m to $720m.

"B+I losses have been maintained at the $660m announced to the market in February," Fletcher said.

Revenue for the year was $9.4b, up 1 per cent year-on-year "and driven by a solid sales performance across core businesses in New Zealand and Australia, offset by a reduction in construction revenues."

Cash flow from operations of $396m was up $153m on the prior year, "reflecting improved working capital management, offset partly by continued outflows on the B+I projects".

"In New Zealand the residential and development division performed strongly, growing revenue and earnings and significantly increasing the volume of units sold from 499 in FY17 to 714 in FY18. The distribution, building products, concrete and steel divisions all grew revenue, however this was offset in a number of businesses by raw material and supply chain cost pressures," Fletcher said.

Shane Solly, Harbour Asset Management portfolio manager, director and research analyst said this morning's result indicated the company was forming "a more solid foundation."

Shareholders hope dividend payouts will resume next year. However, the outcome of chief executive Ross Taylor's restructuring plan is yet to be seen, some say.

Market poised for Fletcher full-year result

Fletcher Construction is selling its Formica business as well as its international roof tile business. It is also building Auckland's two largest projects: the $1b Commercial Bay by Precinct Properties and the $700m-plus NZ International Convention Centre by SkyCity Entertainment Group.

In February, Fletcher chairman Ralph Norris announced the company had recorded losses of nearly $1b from its disastrous Buildings + Interiors division, telling of a combination of factors resulting in $292m losses for the June 30, 2017 year and $660m for the June 30, 2018 year.


One billion reasons why Fletcher chairman Ralph Norris had to go

"It's not a situation where's there a single point or thing. There are a number of issues that conspired. One of the issues is the information flows through to the board were not as fulsome as they possibly could have been," Norris said in February this year.

Changes in the contracting environment and risks to the division were a significant factor, he said at the time.

"We have also had a situation where we have had a significant building boom," he said, adding that this was often the most dangerous time for a building business, "worse than a bust because it puts stress on subcontractors, services and the like".

"In calculating the contracts, there was a significant difference between the professional quantity surveyor firms' calculations on what it cost to complete the projects and some of those numbers moved by more than 100 per cent," Norris said in February, adding: "There are significant parts of this business that have under-performed and were acquired prior to my arrival that have been questionable."

Shares in Fletcher were trading at NZX close yesterday around $6.90 but were at $7 two days ago. Around this time last year, they were $8/share.

In June, Norris announced Bruce Hassall as his successor and four new directors: Barbara Chapman, Robert McDonald, Doug McKay and Cathy Quinn.

Ross Taylor, chief executive, announced a restructuring of the business a few weeks ago in Sydney.

Fletcher announces 'gear change' after tough year

"First we will focus on our core businesses and defend our positions," he said citing a new investment in a $262 million Winston Wallboards Auckland plant, probably at Drury as well as a $15m new panelisation plant to be developed in Auckland and take annual residential construction to above 1000 places.

"Second, we've got to get construction fixed and position and grow that particularly in infrastructure" he said referring to finishing large jobs like the NZICC and Commercial Bay," Taylor said.

Third, "we need to get Australia performing well", he said citing low 4 per cent margins compared to 10 to 11 per cent NZ margins.

Fourth, Fletcher is selling Formica and the Roof Tile Group and that meant a focus solely on Australia and NZ, Taylor said on June 21.

$1b Commercial Bay project delayed again, this time by six months

Precinct Properties' latest result announced a six-month delay on its $1b Commercial Bay project. Fletcher Construction is building the PwC Tower there and the new 120-shop mall at the foot on Queen St on Auckland's waterfront. Giant clothing chain H&M will open its first Auckland CBD shop there at the end of this month.

However, Precinct told the NZX on August 16 of a "revised completion programme" for the project in an update presented in its six-month result where net profit after tax rose 57 per cent from $162.1m last year to $254.9m for the June 30, 2018 half-year.

"In our February result, we talked about retail opening at the end of Q1 2019 so it's moved out by six months," Precinct chief executive Scott Pritchard told the Herald.

The new 18,000sq m 120-shop retail would now not open until September next year, Precinct said last Thursday.

That latest delay was the second revealed by Precinct. Last year, the company said in its annual result presentation out in August 2017 that instead of opening all its Commercial Bay shopping centre in late 2018, it now had a new programme and most of the retail wouldn't open until the first quarter of 2019.

That missed the crucial Christmas 2018 deadline.