“This release suggests that value may take time to be unlocked. Management may now be able to focus on business streams where they can sustainably lift and grow returns,” he said.
Some losses were known, some not and institutional investors are already saying this has lowered profit expectations.
Andrew Reding is chief executive and managing director of Fletcher Building.
Fletcher said that as a result of the strategic review announced by CEO Andrew Reding, additional non-cash significant items of about $250m and $440m are anticipated.
Cash significant items of $50m to $60m are expected.
Fletcher said will primarily relate to restructuring and redundancy costs, goodwill and brand impairments, closure costs and the write-off and provision for onerous contracts associated with enterprise resource planning or software projects, Fletcher said today.
In February, when it announced its December half-year, the company flagged $251m of significant items from Iplex Australia pipes ($177m) and the disposal of Tradelink ($58m).
This month, it announced an expected provision of about $12m to $15m on the increased cost to complete the New Zealand International Convention Centre.
About $10m to $15m is expected to be incurred defending the construction legacy and Western Australia plumbing issues, today’s announcement said.
“Altogether, the total significant items to be announced as part of the FY25 results are expected to be between about $573m and $781m,” today’s statement said.
One institutional investor expressed surprise at the figures given today.
“Significant items are chunky: redundancy costs, goodwill and brand impairments, closure costs and write off and provision for onerous contracts associated with software projects,” he said.
Experts said the $573m to $781m range was enormous and today’s was a disappointing trading update.
Significant items had been “supersized” with obviously many redundancies, one said.
