Fletcher Building (FBU) H1 2026 earnings summary

Executive summary

• Performance was mixed in H1 FY26, with a challenging Q1 followed by a stronger Q2; core businesses showed resilience and steady EBIT despite subdued markets in New Zealand and Australia.

• Disciplined capital allocation, cost reduction initiatives, and a decentralised model were implemented, with benefits expected to increase in H2.

• Significant progress on portfolio simplification, highlighted by the announced sale of the Construction division, a major step in reshaping the group.

• Operating cash flow improved to $156 million, up from $87 million in the prior period, supporting balance sheet strength.

• No interim dividend was declared for 1H FY26 due to market conditions and capital structure priorities.

Financial highlights

• Revenue from continuing operations was $2,866 million (NZD 2.9 billion), down 0.5% year-on-year.

• EBIT before Significant Items was $145 million, with EBIT margin steady at 5.1%.

• Net profit from continuing operations was $45 million, the first positive result since June 2023.

• Net cash from operating activities rose to $156 million, up from $87 million in the prior period.

• Net debt increased to $1,164 million, mainly due to residential land purchases, but remained below internal expectations.

Outlook and guidance

• New Zealand volumes are expected to remain soft, with meaningful improvement not anticipated until 2027.

• Australian markets show early signs of stabilisation, especially in Laminex and Fletcher Insulation, but conditions remain mixed.

• Margin compression will persist, but ongoing cost out programs and portfolio simplification are expected to support future performance.

• Construction division divestment is on track, with completion expected in Q1 FY27; Residential & Development review ongoing.

• Full-year CapEx now expected at $290–310 million, down from previous guidance.