Fletcher Building (FBU) H2 2024 earnings summary

Executive summary

• Revenue held steady at $7.7 billion year-over-year, with gains in Residential and Development and Construction offset by declines in materials and distribution divisions.

• FY24 earnings impacted by weak market conditions, significant legacy project provisions, and write-downs, despite strong cost and cash control measures.

• Net loss of $227 million includes $180 million provision on legacy projects, $117 million Higgins impairment, and $141 million loss from discontinued Tradelink operations.

• Strong trading cash flows from continuing operations, excluding legacy and significant items, at $784 million, up from $537 million in FY23.

• Leadership changes announced, including new CEO, CFO, and General Counsel.

Financial highlights

• EBIT from continuing operations was $509 million, within guidance, but down 35% year-over-year; EBIT margin declined to 6.6%.

• Significant items totaled $333 million, mainly from FCC legacy provisions and Higgins impairment.

• Net loss for FY24: $227 million; basic EPS: -0.29; no final dividend declared due to market conditions and lender agreements.

• Trading cash flows (excluding legacy/significant items): $784 million, a material uplift year-over-year.

• Net debt at year end was $1.8 billion; leverage ratio at 1.99x; liquidity of $1.1 billion.

Outlook and guidance

• FY25 market volumes in materials and distribution expected to be 10–15% lower year-over-year, with persistent macroeconomic pressures.

• Ongoing focus on cost reduction, debt reduction, disciplined CapEx, and completion of Tradelink sale.

• FY25 CapEx expected at $325 million, with growth CapEx limited to critical projects.

• Construction legacy cash outflows expected to be $100 million in FY25, split between H1 outflow and H2 inflow.