Fletcher Building (FBU) H1 2025 earnings summary

Executive summary

• Governance and board reset completed with new Chair, directors, and executive team, strengthening leadership and oversight.

• Business improvements achieved in factory operations, safety, sustainability, and employee engagement despite challenging markets; 21% lower carbon emissions than FY18 and 76% of product revenue from certified products.

• $700 million capital raise completed, reducing leverage from 2.0x to 1.4x and strengthening the balance sheet.

• Strategic review underway, focusing on portfolio shape, operating model, and capital structure, with further details to be shared at Investor Day in June 2025.

• No interim dividend declared due to market conditions and banking covenants.

Financial highlights

• Revenue for HY25 was $3.6 billion, down 7% year-over-year, driven by lower volumes across most divisions.

• EBIT before significant items was $167 million, $96 million lower than the prior period; EBIT margin declined to 4.7% from 6.8%.

• Net loss of $134 million for HY25, including a $170 million provision for WA plumbing and a $58 million non-cash loss from Tradelink®.

• Trading cash flow (excluding legacy and significant items) was $138 million, down from $225 million last year.

• Basic EPS was negative 14.3 cents; effective tax rate 24.3%.

Outlook and guidance

• FY25 market volumes in Materials and Distribution expected to be 10%-15% lower than FY24; earnings remain sensitive to market conditions.

• FY25 EBIT (before significant items) expected to be 60% weighted to the second half, driven by cost savings, higher house sales, and absence of one-off costs.

• Key downside risks include further volume deterioration and lower than target house sales.

• No specific EBIT guidance range provided due to market volatility.

• Long-term fundamentals remain solid, with strong sector demand and significant operating leverage for future recovery.