Fletcher Building Ltd has sold international roofing products manufacturer Roof Tile Group (RTG) to Canadian roofing company IKO Industries Ltd for $US39 million ($NZ59.8 million).
Fletcher Building chief executive Ross Taylor confirmed the sale yesterday, and said Roof Tile Group was being sold as one entity. The sale was effective yesterday.
Mr Taylor said the Roof Tile Group sale price would be subject to a post-completion working capital adjustment. Once finalised, it was expected the sale would result in a non-cash loss on disposal of $NZ15-20 million against the current carrying value of the business, to be included in Fletcher Building’s half-year results. This would be incurred as a significant item and therefore not affect previous statements on the outlook for Fletcher Building earnings before interest & tax for the 2019 financial year (before significant items).
He commented: “We are pleased to complete the RTG divestment in a timely way. The sale is in-line with Fletcher Building’s 5-year strategy to divest our international operations to focus our capital & capability behind our New Zealand & Australian businesses, with building products & distribution at our core. The divestment process for the Formica business is progressing well and we remain confident that the sale will be completed in the 2019 financial year.”
Mr Taylor said Fletcher Building had made no decisions about how it would use the proceeds from the 2 sales: “Once both sales have been completed we will review our capital structure & capital requirements and then determine how the funds will be allocated.”
Roof Tile Group manufactures & distributes metal roof tiles, operating under the Gerard & Decra brands. It employs 450 people, manufactures in 4 countries and sells products globally.
Attribution: Company release.