Updates about litigation and a big scheme to fix leaky Perth water pipes featured at Fletcher Building’s annual general meeting today.
The company expects a judgement next year in its case against waterproofers it sued for the 2019 fire at the NZ International Convention Centre, although they deny liability.
Chairman Peter Crowley told shareholders at today’s annual meeting at Eden Park that litigation over the October 2019 fire was concluding.
“Our court proceedings against the roofing sub-contractors on the convention centre are nearly complete, with judgement expected in the second half of this financial year,” he said.
Fletcher sued XAM and JEL Waterproofing, in a case hinging on contract and tort liability.
Alan Best, of the NZ Shareholders Association, asked Crowley about provisions for significant items.
Crowley said six divisions were cut to five and Fletcher was being decentralised in a big reorganisation but the IT systems needed to be changed to accommodate that, so that had cost $120 million.
Best also asked about Fletcher’s complexity. CEO/managing director Andrew Reding said that was exactly why it was being reorganised and divisions decentralised.
Fletcher’s Iplex is involved in fixing Perth’s exploding pipes, held responsible because it made them.
Ceiling pipe remediation was continuing to track well, Crowley said.
Nearly 1000 ceiling pipes were replaced by the end of June, 55 homes were fully remediated, and more than 2000 leak detector units installed.
“Importantly, costs remain consistent with our estimates, and no additional provision changes have been required,” he said.
Last August, Fletcher released details of the scheme where Iplex Pipelines Australia would provide A$155m ($168m) to pay for the Perth leaky pipes debacle after it struck a deal with the Western Australia Government to help homeowner victims.
A shareholder asked Crowley about Perth leaky pipes and what went wrong.
“We’ve got to be more alert to how our products are installed,” Crowley responded, citing laboratories and testing and quality assurance.
“We’ve got to be alert to how our product is misused in the market. That installation is the main thing.”
Fletcher has settled its battle over a motorway north of Auckland.
“The impressive Puhoi to Warkworth motorway project was opened to traffic in June 2023 and reached full works completion in May 2024.
“We have now settled all material outstanding claims with the New Zealand Transport Agency and insurers, closing out a complex and long-running matter,” Crowley said.
SkyCity is suing Fletcher for $330m over the late delivery of the NZ International Convention Centre.
“There are claims related to the convention centre. We intend to vigorously defend ourselves against SkyCity’s legal proceedings and we are confident in our position,” Crowley told shareholders today.
Fletcher Construction had not yet finished working on the NZICC, despite it being scheduled to open next February, he also revealed.
“The New Zealand International Convention Centre is now effectively completed, with acceptance testing and compliance processes underway. We expect to hand over this magnificent building to SkyCity shortly,” Crowley said.
Crowley said the annual result to June 2025 was “disappointing to all of us” but action had been taken.
The board and senior management had been enhanced and about $200m of savings targeted. Debt was cut 43% to $999m.
Dividends remain suspended.
The June 2026 financial year’s first quarter had revealed challenging trading conditions.
“Our quarterly volume update released last week showed further declines in trading volumes and ongoing pressure on margins. The primary driver of this was continued weak demand and heightened competitive activity, particularly in the New Zealand market,” Crowley said.
Reding was also downbeat today.
“In New Zealand, we have experienced a prolonged period of subdued demand in the residential and commercial construction markets, and we expect that to continue through the financial year 2026,” Reding told shareholders.
He cited last week’s announcement to save a further $100m on top of the $200m already targeted.
Anne Gibson has been the Herald‘s property editor for 25 years, written books and covered property extensively here and overseas.