The New Zealand International Convention Centre (NZICC) illuminated by glass panels created by Sara Hughes. Photo / Michael Craig
Tough market conditions meant Fletcher Building made a net loss of $419 million in its latest year, worse than last year’s $227m loss.
Managing director and group CEO Andrew Reding revealed hard times in the year to June 30, 2025.
“2025 has been one of the most demanding years in recent memory, both for Fletcher Building and the industries in which we operate,” he said.
“Our businesses faced tough market conditions, as well as undertaking significant internal change, and addressing legacy issues.”
But big changes were being made.
Revenue fell 9% to $7b.
Earnings before interest and tax (ebit) before significant items was $384m which was $125m lower than FY24.
Significant items were $702m, of which $644m related to continuing operations.
Net debt was $999m, a big improvement on the $1.77b last June.
On legacy issues, Reding said that in June, Fletcher reached a settlement with NZTA Waka Kotahi on the Puhoi to Warkworth motorway project.
It had settled insurance claims for weather and landslips that affected the project.
Final finishing and commissioning work on the New Zealand International Convention Centre (NZICC) remained on track for handover in 2025, ahead of its planned opening in early 2026, Reding said.
In Australia, the industry response for the Western Australian plumbing issues was signed, with a provision of A$155 million ($170 million) recognised in the first half of the year, and the remediation work of the participating builders is starting to build momentum.
On the outlook, market volumes were expected to remain low with subdued demand through FY26.
Indicators are mixed in Australia, and it is too early to determine when recent signals might translate into greater activity and volumes, Reding said.
“While the near-term environment remains uncertain, our focus on cost control, operational discipline, effective capital allocation and portfolio simplification is positioning Fletcher Building well to both navigate current headwinds and deliver stronger, more sustainable returns over the medium to long term.”
SkyCity Entertainment Group said in June it intended to file legal proceedings against Fletcher Building and The Fletcher Construction Company for $330m due to delays to the NZ International Convention Centre.
Fletcher said then it would vigorously defend itself but that the NZICC would cost a further $12m to $15m to finish.
SkyCity’s claim alleges that breaches of contract occurred. Those related to the fire and constituted gross negligence or persistent flagrant or wilful neglect by the Fletcher entities to carry out obligations under the building works contract.
SkyCity claims it is entitled under that contract to liquidated damages of more than $330m from Fletcher.
“SkyCity has attempted to resolve these claims by agreement with Fletcher but has been unable to do so,” the casino giant said.
In early June, Fletcher began litigation against subcontractors it blamed for that fire. The Fletcher Construction Company sued Xam and JEL Waterproofing in a case hinging on professional indemnity insurance.
The contractors denied liability.
Last week, Forsyth Barr analysts Rohan Koreman-Smit and Paul Laxton Koraua previewed today’s result, forecasting a messy outcome, muddied by $320m to $530m of significant items in the second half of the year, taking full-year significant items to $513m–$723m, they forecast.
The analysts expected ebit of $370m–$375m.
“We expect outlook commentary for FY26 to be relatively muted, as Fletcher noted at its June investor day that it expects no material pickup in activity until FY27.
“We look for an update on the potential sale of its construction business and more detail on its cost-out strategy, particularly at the business unit level,” the analysts said.
Fletcher has been exploring potential divestment options for its construction division, including the Higgins, Brian Perry Civil, and Fletcher Construction business units, they noted.
The analysts have a neutral rating on the stock.
Anne Gibson has been the Herald‘s property editor for 25 years, written books and covered property extensively here and overseas.