Archive | Sectors

Sales indicate softening in property markets

The softening in property markets has been evidenced by 2 sales, one in New Lynn passed in at auction in April and sold 4 months later for the same figure, the other a Mt Roskill property (pictured) with a mix of uses and sold $230,000 below the recent asking price.

They were among 5 properties in Kelston, Mt Roskill, New Lynn & Swanson sold by Bayleys agents, and 3 leases in Avondale & New Lynn.


Isthmus west

Mt Roskill

74 Carr Rd:
Features: 835m² site, 697m² low-stud industrial building constructed in the 1950s
Outcome: sold vacant to an owner occupier for $1.615 million
Agents: Tony Chaudhary & Sunil Bhana

439 Mt Albert Rd:
Features: 2/3 share of 888m² residentially zoned section, 564m² mostly vacant mixed-use building with low seismic assessment (25% new building standard); 3 retail/commercial tenancies totalling 237m² on ground level, 4-bedroom home above
Rent: one commercial tenancy leased at $25,000/year; estimated fully leased rental income of about $100,000/year
Outcome: sold for $1.32 million + gst after being on market at $1.55 million
Agents: Phil Haydock & Alan Haydock



39 Cartwright Rd, Kelston.

39 Cartwright Rd:
Features: 1032m² site zoned mixed use, partially leased 735m² standalone industrial building, recently refurbished externally; front 435m² warehouse plus 81m² of offices & amenities occupied by automotive tenant, 219m² vacant rear warehouse
Rent: $30,000/year net + gst (2017 rental valuation $81,859/year)
Outcome: sold for $950,000
Agents: James Valintine, William Gubb, Sunil Bhana & James Hill

New Lynn

3019 Great North Rd & 2 Bentinck St:
Features: 1458m² corner site in 2 titles; owned & occupied by a family car dealership since the early 1980s, the 647m² Great North Rd title has a 140m² office/workshop building while the 812m² Bentinck St title has a house & shed totalling 120m²
Outcome: passed in at auction in April at $1.625 million, now sold at that price post-auction, vacant possession
Agents: James Were, Scott Kirk, Mike Adams & James Chan


260 Swanson Rd, unit E:
Features: 100m² retail unit in suburban retail centre; Ezy Cash (Massey) Ltd has been a tenant for 8 years and renewed for a further 4 years in January 2016, with 3 further 4-year rights of renewal
Rent: $30,000/year net + gst
Outcome: sold for $585,000 at a 5.12% yield
Agent: Mark Pittaway


Isthmus west


14 Copsey Place
Features: 1846m² site, 1273m² standalone older-style industrial building, about 1000m² of warehousing, 3 roller doors, 2 levels of offices; leased to grocery wholesalers for 5 years with 3 5-year rights of renewal
Rent: $125,000/year net + gst
Agents: Mark Preston & Simon Davies

7 Jomac Place
Features: New premium grade industrial premises comprising 1000m² of high stud warehouse, 200m² office & amenities, 110m² canopy plus large yard area, 10 parking spaces; 3-year sub-lease to a pharmaceutical company with no renewal rights
Rent: $135,000/year net + gst
Agents: Mark Preston & Laurie Bell


New Lynn

13 Crown Lynn Place:
Features: 1500m² standalone medium-stud industrial building, about 100m² of office, leased for 9 months, no right of renewal
Rent: $110,000/year net + gst
Agents: Mark Preston & Laurie Bell

Attribution: Agency release.

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Ratepayers get small court victory in scrap over Mangawhai sewer scheme levies

High Court judge Ailsa Duffy has brought to an end an episode in the scrap over the secretively funded & heavily over cost Mangawhai Ecocare sewerage scheme.

The Mangawhai Ratepayers’ & Residents’ Association & its chair, Bruce Rogan, fought the imposition of rates to pay for the sewerage system after its cost blowout was exposed – the district council secretly borrowed $58 million for its capital cost – resulting in a Validation Act being passed as the association was heading to court for a judicial review.

In 2014, Justice Paul Heath found the Validation Act passed to make those rates lawful did just that – made them lawful.

Some ratepayers, led by Mr Rogan, refused to pay Kaipara District Council rates, and refused to pay Northland Regional Council rates when they discovered the regional council had no authority to hire the district council to collect them.

Justice Duffy found in an interim judgment that these regional council rates were unlawful. In a second judgment on that case yesterday, she quashed the regional council’s rates for the rating years 2011-12 to 2015-16 and also set aside the penalties imposed for non-payment.

However, she said the ratepayers’ association & Mr Rogan hadn’t sought reimbursement in their claim and she made no order directing the regional council to refund the relevant rates & penalties.

Attribution: Judgment.

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Moricz says sharp drop in industrial leasing a timing issue not market cooling

A sharp drop in leasing of new top-grade industrial property in Auckland represents a short-term timing issue, not a cooling market, CBRE Research senior director Zoltan Moricz says in the consultancy’s latest market outlook.

“Of the 100,000m² of new supply completed in the first half, about a quarter was in 3 speculative developments that were all available for lease at the end of June.”

Mr Moricz said overall vacancy tightened slightly, from an already low 1.7% to 1.6%.

“The vacancy decline would have been stronger had all newly built prime space been taken up. However, the timing of the latest new speculative supply meant that some of this was not taken up at the time of our survey, which pushed up prime vacancy as at June.

“The strong underlying demand for industrial space is manifested in 2 of the recently completed speculative developments coming under leasing contract since our June survey cut-off.”

Mr Moricz said that, at first glance, industrial headline figures for the first 6 months of 2017 suggested a cooling Auckland industrial property market: “After a couple of years of continuous growth, overall demand for space decreased by 22% compared to the second half of last year, and prime quality vacancy increased from 1% in December to 1.6% at the end of June. But a closer look at the details reveals there is no significant slowdown in occupier demand, and the above changes are essentially caused by the timing & composition of the latest new supply.

“Continuously strong occupier demand is most evident from the amount of secondary grade & pre-existing prime grade space that has been taken up in the first half of 2017.

“As the chart illustrates, leasing activity in these 2 categories was slightly more in the last 6 months than in either the first or second half of last year. Moreover, there were some sizeable secondary grade premises taken up by the market, with the average size of the 10 largest leases being about 8000m².

“Active occupiers in this segment of the market include large manufacturers such as Lion & Cottonsoft, and major retail businesses like Bunnings & My Food Bag. The pre-existing grade A segment was also dominated by the manufacturing sector (Fisher & Paykel, Visy) as well as logistics service providers (PFL Cargo, NZ Post), with the manufacturing sector accounting for 32% of overall activity and logistics 28%.”

Mr Moricz said the chart also made it clear that it was the volume of relocations & expansions into newly completed buildings where the first half of 2017 lagged behind previous half-year periods.

He said overall new supply in 2017 would be less than in 2016, “which is not entirely surprising given the record amount of new completions last year, including one of the largest industrial buildings in the Auckland market (Sistema Plastics Ltd’s 52,000m² facility near Auckland Airport)”.

CBRE’s forecasts indicate industrial supply should remain at about 200,000m²/year for a few years.

Attribution: Agency release.

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Precinct lifts profit, plans notes issue

Precinct Properties NZ Ltd lifted its net profit after tax by 17.3% in the June year to $162.1 million ($138.2 million in 2016).

The commercial property investor now has a large development portfolio at Commercial Bay on the former Downtown shopping centre site in downtown Auckland, the Wynyard Quarter and, in Wellington, Bowen Campus, and it’s expecting to make a $150 million notes issue this month as the first stage in diversifying its funding.

Chief executive Scott Pritchard said yesterday: “A strong revaluation gain, reduced interest & tax charges and an unrealised gain on financial derivatives have all contributed to the increase. Net operating income (distributable earnings), which adjusts for a number of non-cash items, has increased from $72.8 million to $74.7 million. On a cents/share basis, this was in line with guidance and up 2.7% to 6.17c/share (2016, 6.01c/share).”

Net property income reduced to $90.4 million ($104.5 million). Adjusting for developments & seismic repair costs, like-for-like net property income rose by 0.7%, with Auckland increasing by 1% and Wellington flat.
Precinct’s portfolio value increased to $2.04 billion ($1.70 billion) due to the valuation gain & the large development spend.

Result highlights:

  • Net profit after tax up 17.3% to $162.1 million ($138.2 million)
  • Net operating income up 2.6% to $74.7 million ($72.8 million
  • Property portfolio revaluation gain of $77.5 million ($81.2 million)
  • NTA/share up 6% to $1.24 ($1.17)
  • Full-year dividend up 3.7% to 5.6c/share (5.4c/share), representing a 90.8% payout ratio
  • Earnings guidance for the 2018 financial year, net operating income of about 6.3c/share, and dividend expected to rise 3.6% to 5.8c/share.

Advancing developments:

  • Wynyard Quarter stage 1 in Auckland has been completed and Bowen Campus in Wellington is well underway, both projects recording a revaluation uplift
  • The as-if-complete value of Commercial Bay in downtown Auckland increased by $88 million to $941 million
  • 46% of Commercial Bay retail space committed
  • Post-balance date, the Government advised that it intended to lease the remaining office space at Bowen Campus, taking the office pre-commitment to 100%.

Strengthened portfolio:

  • Occupancy increased to 100% (June 2016, 98%)
  • An extended weighted average lease term across the portfolio of 8.7 years, including developments
  • 56 leasing transactions on 37,500m² of space secured
  • The portfolio is under-rented by 4.7% (June 2016: 3.6% under-rented)
  • Advanced strategic focus on high levels of client service with the acquisition of a 50% interest in co-working space operator Generator.

Sustainable growth:

  • Reflecting development progress, gearing increased to 25.1% (30 June 2016, 14.4%)
  • Precinct is also considering issuing a subordinated convertible note
  • Post-issue, committed gearing is expected to reduce, supporting growth through a flexible funding option.

The convertible note issue

Precinct is considering making an offer of up to $150 million of 4-year fixed-rate, subordinated convertible notes to institutional & New Zealand retail investors. The offer is expected to consist of a priority offer to eligible New Zealand-resident retail shareholders, and a general offer.

Mr Pritchard said: “Precinct has pre-funded its extensive existing development pipeline, including Commercial Bay. However it is considering issuing the notes to provide the company flexibility to pursue prudently other projects, should they arise.”

The conversion price to convert the notes into Precinct ordinary shares will be set at the lesser of:

  • a fixed price/share (conversion price cap), and
  • a 2% discount to the 20-day volume-weighted average price (market price).

Precinct may elect instead to pay a cash amount to noteholders at the end of the term rather than converting the notes into shares. In this case, noteholders would be paid an amount equal to the market price (as described above) of all the shares that would have otherwise been issued on conversion of their notes, so they receive an equivalent value to those shares and similarly benefit from the 2% discount & share price appreciation above the maximum conversion price.

The company expects to release full details of the offer this month. Mr Pritchard added: “Post-issue, we expect to further diversify our funding sources and reduce our leverage, providing Precinct with the capacity to consider future opportunities.”

Link: Precinct 2017 annual report

Attribution: Company release.

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Readymix production over 1 million m³/quarter again

Readymix concrete production was over 1 million m³ again in the June quarter, after the customary March quarter dip.

Statistics NZ’s production graph shows readymix fell just short of 1 million m³ in the June 2007 quarter, at the start of the global financial crisis, hit a low point in the first quarter of 2009 and stayed there for the next 3 years.

Production rose steadily until it passed 1 million m³ in the December 2015 quarter, then dived sharply in the March 2016 quarter. It fell again in the March 2017 quarter, but less dramatically.

Production in the June 2017 quarter was 1.03 million cubic metres, down 2 percent from the June 2016 quarter (when it was at a record 1.05 million cubic metres).

“Ready-mix concrete production has been running above 1 million cubic metres per quarter for over a year, except in March quarters,” construction statistics manager Melissa McKenzie said. “This June quarter, enough concrete was produced to build almost 69 Sky Towers.”

The Auckland region accounted for over one-third of the total – 377,000m³ of the total 1.03 million m³ in the June quarter. Both the national & Auckland production totals fell 2% below the June 2016 level.

In Canterbury, the 176,000m³ of readymix was down 17% from the June 2016 level.

Production nationally was 4.07 million m³ in the June 2017 quarter, up from a low of 2.64 million m³ in the December 2011 year.

Attribution: Statistics NZ release.

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Apartment & cross-lease sell

One of the 3 apartments auctioned at Barfoot & Thompson today, and one of the 3 eastern suburbs cross-leased units auctioned yesterday, were sold under the hammer.


Federal St

Federal, 207 Federal St, unit 803:
Features: 61m², 2 bedrooms
Outgoings: body corp levy $5240/year
Outcome: sold for $540,000
Agents: Stephen Shin & Rhys Chen

Victoria Quarter

Fiore 2, 168 Hobson St, unit 405:
Features: 44m², one bedroom
Outgoings: rates $1588/year including gst; body corp levy $2428/year
Income assessment: $460-480/week
Outcome: passed in at $460,000
Agents: Selina Zheng & Tommy Zhang

SugarTree Prima, 27 Union St, unit 906:
Features: 75m², 2 bedrooms, 2 bathrooms, balcony, storage locker, option to buy parking space
Income assessment: $650/week, fixed until January
Outcome: passed in at $610,000
Agents: Livia Li & Alan Guo

Isthmus east

Mt Wellington

399 Ellerslie-Panmure Highway, unit 1:
Features: cross-lease, 1/5 share in 1315m², 80m² 2-bedroom unit, garage
Outcome: passed in at $621,000
Agents: Robben Li & Will Liu


11 Burswood Crescent, unit 2:
Features: cross-lease, half share in 827m², 3 levels, 4 bedrooms, 3 bathrooms, 2 living rooms, double garage
Outcome: passed in at $3.1 million, back on the market at $4 million
Agent: Paul Studman

9 Armadale Rd, unit 4:
Features: cross-lease, 1/7 share in 1011m², 2-bedroom unit, courtyard, carport,
Outcome: sold for $762,000
Agents: Janice Hamilton-Cox & Philip Cox

Attribution: Auctions.

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2 apartments sell at Ray White auction

2 apartments in the Cintra & Altitude buildings were sold and 2 passed in at Ray White City Apartments’ auction today.


Learning Quarter

The Whitaker, 2 Whitaker Place, unit 8H:
Features: 29m² studio
Outgoings: rates $1071/year including gst; body corp levy $3817/year
Income assessment: $350/week, fixed until February; appraisal $380-400/week furnished
Outcome: passed in at $200,000
Agents: Damian Piggin & Daniel Horrobin

Crown on Cintra, 3 Whitaker Place, unit 11E:
Features: 30m² fully furnished studio, under hotel management; remediation project pending
Outgoings: rates $929/year including gst; body corp levy $3409/year
Income assessment: $350/week current
Outcome: sold for $198,000
Agents: James Mairs & Lucia Gao

Quay Park

Waldorf Scene 2, 18 Beach Rd, unit 709:
Features: leasehold, 58m², one bedroom, balcony, secure parking space
Outgoings: rates $1461/year including gst; body corp levy $4086/year, ground rent $5564/year
Income assessment: vacant; appraisal $600/week
Outcome: passed in at $125,000
Agents: James Mairs

Victoria Quarter

Altitude, 34 Kingston St, unit 3C:
Features: 40m², 2 bedrooms, balcony
Outgoings: rates $1084/year including gst; body corp levy $3633/year
Income assessment: $460/week, fixed until February; appraisal $460-480/week furnished
Outcome: sold for $337,000
Agents: Damian Piggin & Daniel Horrobin

Attribution: Auction.

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2 commercial sales but homes passed in at auction

2 of the 3 commercial properties auctioned at Bayleys yesterday were sold under the hammer.The other, an Avondale development site (pictured), was passed in at $5.3 million.

Both apartments & a cross-leased Grey Lynn home in the auction were passed in.



Learning Quarter

Celestion Waldorf, 19 Anzac Avenue, unit 1502:
Features: furnished 2 bedrooms
Outgoings: body corp levy $4725/year
Income assessment: in hotel pool, lease 2020 + 2 10-year rights of renewal
Outcome: passed in at $265,000
Agents: Caleb Rufer & Julie Prince

Isthmus west

Grey Lynn

14A Westmoreland St:
Features: leasehold (999-year lease), cross-lease, half share in 697m², 3 bedrooms, study; neighbouring property at 16-18 Westmoreland St a potential development site in business local centre zone
Outcome: passed in at $1.1 million
Agents: Robyn Clark & Peter Tanner

St Marys Bay

117 Shelly Beach Rd, unit 1:
Features: 4 bedrooms, 2 bathrooms, 2 living rooms, central vac system, 2 parking spaces
Outgoings: body corp levy $7206/year
Outcome: passed in at $1.5 million
Agents: Sally Ridge & Daryl Spense


Isthmus east

Mt Wellington

132D Marua Rd:
Features: 170m² industrial unit – high stud warehouse, office, mezzanine & amenities, 3 parking spaces
Outgoings: body corp levy $2449/year for year ending today
Outcome: sold for $675,000
Agents: Greg Hall & James Valintine

Isthmus west


1843 Great North Rd:
Features: 2309m² site, 250m² floor area – café & villa; height limit under unitary plan 32.5m in business town centre zone 
Outcome: passed in at $5.3 million
Agents: Laurie Bell & Kate Kirby

Mt Roskill

58 & 60 Dornwell Rd:
Features: 2 properties offered together, vacant, each of 825m², zoned business – light industry, No 60 on corner of Carr Rd, floor area 1088m² contains warehouse showroom & office
Outcome: sold for $2.8 million
Agents: Mike Adams, Genevieve Thompson-Ford, Cameron Melhuish

Attribution: Company release.

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‘Fessed up, time to move on, says an unconvincing Fletcher boss

After an hour of a media briefing on Fletcher Building Ltd’s slashed annual profit yesterday, group chair Sir Ralph Norris (above) thought it was time to move on.

There’d been one topic of discussion, the failure to rein in loss-making practices at the construction division until it had cost the group $292 million. Most of the group’s other businesses had performed well, but nobody was interested.

Sir Ralph wanted to look forward, but the company calls the customary briefing to explain its past – the money it made or didn’t make over the last year, the performance of its divisions – with only a brief look forward.

The 2 central questions I wanted him to answer, when it came to the post-briefing media questions, were these, both forward-looking with an acknowledgement of aberrations:

What had Fletcher done to fill the void of construction nous in its senior executive ranks?

And what steps was the board taking to fill that void within the board’s ranks?

Sir Ralph rattled off a long list of recent appointments to demonstrate how the company had tackled a problem aggressively, most of which the suddenly departing former chief executive, Mark Adamson, had listed when he announced a cut in earnings guidance in March, shortly before his exit.

In addition, I wanted to know how the board would acquire more construction understanding than it apparently had. Sir Ralph skirted that question, saying only that “we will have board members stepping down. We are in the process of looking at candidates – somebody with construction experience would be a very good addition to the board.” The company will hold its annual meeting on 25 October.

“If you strip out B+I, we would have….”

Fletcher Building reported net earnings before significant items down 23% to $321 million: “Performance was impacted by the Building + Interiors (B+I) business unit within the Construction division, which reported a $292 million loss during the year. The loss resulted from a combination of complex design issues, inadequate project management and stretched resourcing in a capacity-constrained New Zealand construction market – which negatively impacted 2 major projects in Christchurch [unnamed for business confidentiality reasons, Sir Ralph said] & Auckland [SkyCity International Convention Centre] and a number of smaller projects across the B+I portfolio.

“The challenges in B+I masked a robust performance across the remaining portfolio, with Building Products (+6%), International (+27%), Distribution (+10%) and Residential & Land Development (+55%) all posting strong earnings growth.”

Sir Ralph commented: “If you strip out B+I, we would have increased our earnings about 30% in New Zealand and overall by 20%.”

The rejoinder is that, if the board had paid more attention to the operations of a core business sector, or tried harder to understand how that sector works, no stripping out would be needed.

The man in charge’s belated lesson on construction accounting

After saying “The past is the past, we’re going through a process of rebuilding,” Sir Ralph was reluctant to leave the construction division’s losses without some more explanation: “A boom in any business is almost as bad as a bust. In the end, in a situation where resources get short…. blocks & hurdles, which measure time, go against you.

“The demand for resources in a boom are significantly higher.

“These contracts were entered into some years ago… And one thing I have learned about construction is, construction accounting is more of an art than a science – when you decide to take profit into your books, when to take a loss.

“It’s a process that does take a fair degree of complexity to it.”

Sir Ralph said Fletcher had taken “a very exhaustive approach” to its construction division problems: “The amount of time I’ve taken in this business this year, I feel I’ve been an executive rather than a director.”

He said the problems at B+I had all come about this financial year, first noticed in September but the extent not realised immediately: “Up until this year, B+I has performed very well,” he said.

The issues surfaced last September, but the company thought it would get payment for extensions of time, liquidated damages or any other redress for rising costs.

However, in March, management realised none of those ways of making up for onsite losses were going to happen, and the board was informed. Come July, “we took the view there would be no extensions of time, no liquidated damages, no redress. But, as I said at the outset [of the briefing], construction accounting is not simple.”

The reaction was to make a series of executive appointments and to bring in “an independent group of seasoned construction experts, some from Higgins [acquired during the year]”.

At the SkyCity international convention centre in Auckland, Sir Ralph said: “That project has nearly 2 years to run. We have changed the team on that project. We identified a start date earlier than we should have committed to. We weren’t able to staff up. By the time we got to the scheduled start date, we weren’t able to staff up.”

And, after saying the cost of that lapse “hasn’t left our bank account yet”, Sir Ralph said: “I’d like to think we’ve covered the past and get on with the future.”

Interim chief executive talks up the positive

Francisco Irazusta, Fletcher Building’s interim chief executive.

The future of the group, for the moment, is in the hands an interim chief executive, Francisco Irazusta, who was enthusiastic & positive about Fletcher’s future. The problems had been uncovered, issues investigated and now being fixed: “We have improved our project governance and the way we bid for projects,” he said. B+I would become more focused.

And then, from Mr Irazusta, a culture shift.

Over the last 3 decades, Fletcher Building has flushed out businesses, flushed out staff when head office didn’t understand a business the group was running or wanted to change direction – distribution was one segment that caused the group many headaches, the risks of oil exploration looked too risky (in the dying days of the old Fletcher Challenge) and it wasn’t convinced of how to run a petrol station portfolio.

Now, with Mr Irazusta, a bright future dawns: “This remains a great business,” he said yesterday. “Our fundamentals are still strong. We are very focused on our people. We have great, great teams of people. They are passionate in what they do. We focus on safety. Safety is No 1.

“We are developing our ideas. We are developing our talent. We are embracing diversity…

“We will review our customer satisfaction in every business unit. We are putting actions in place to fulfil our customers’ requirements. We want to have more suitable products, more suitable services.

“We are becoming much closer to our customers.”

So, all will be rosy.

Mr Irazusta said the Iplex Australian operations had posted positive earnings for the first time since 2014. Mico & Steel were benefiting from increased residential construction in New Zealand, earnings from Fletcher Living & residential land development were up 55%, corporate costs were down (primarily due to lower incentives paid to staff because of lower earnings).

Australian impairment

Aside from the heavy focus on construction failings and Mr Irazusta’s insistence on a bright future, other troublesome areas of the business were ignored.

The company confirmed an impairment charge of $222 million for its Tradelink & Iplex Australia businesses, representing about 3% of the group’s total assets as at 30 June. The impairment, reported below the ebit line, will have no impact on cash earnings.

The company release said: “In taking these impairments, we are addressing the gap between the balance sheet carrying values of Tradelink & Iplex Australia and their near- to medium-term profitability in a tightening Australian economy.

“Despite these charges, both businesses are progressing well against their turnaround strategies. Tradelink has opened 20 new stores in the 2017 financial year, improved its customer proposition and taken market share, while Iplex Australia has returned to profitability for the first time since 2014.”

Sir Ralph, in his opening foray for the media briefing, summed up the state of play: “Our fundamentals are strong and the majority of our businesses are in growth. We will emerge stronger and we will work to win back the trust of our shareholders.”

That, and Mr Irazusta’s positivity, were exhortations. The Australian impairments and the failure at the highest level to understand basics of the construction business are far more serious than casual stumbles.

Image at top: Fletcher chair Sir Ralph Norris, pensive as his interim chief executive speaks.

Links: Fletcher Building
Results presentation

Earlier stories:
16 August 2017: Fletcher – the bald results
21 July 2017: Fletcher Building takes axe again to construction earnings, Adamson ousted
20 March 2017: Fletcher Building cuts earnings guidance by $110 million
19 March 2017: Fletcher Building to explain construction loss Monday morning
22 February 2017: Fletcher Building net up 2% after site closures

Attribution: Company briefing.

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Fletcher – the bald results

Fletcher Building Ltd still came out ahead in the year to June despite a $292 million loss by its construction division.

Below is the baldest version of Fletcher Building’s annual results. I’ll follow up later today with more financial detail, including the performance of the group’s no-construction businesses, which fared well.

I’ll also go into some detail on the frank assessment by chair Sir Ralph Norris of things that went wrong.

The company reported:

  • Underlying operating earnings down 23% to $525 million ($682 million)
  • Net earnings before significant items down 23% to $321 million ($418 million)
  • Significant items a $252 million debit ($37 million gain)
  • Earnings before interest & tax (ebit) down 62% to $273 million ($719 million)
  • Net earnings down 80% to $94 million ($462 million)
  • Earnings/share before significant items down 24% to $46.3 million ($60.6 million)
  • Operating margin down 26% to 5.6% (7.6%).

Attribution: Company briefing.

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