Fletcher Building doubles first half profit

By NZPA

Wednesday 12th February 2003

Fletcher Building has doubled its first half net profit to $83 million, driven by internal improvement programmes and buoyant market conditions.

The building materials and construction company also doubled its earnings before interest and tax for the six months ended December, to $160 million from $78 million in the same period in 2001.

The result included an $8 million contribution from the Laminex group, acquired on November 13.

Fletcher Building has turned itself around in the last two years, reversing a $41 million interim loss in 2000, which has been reflected in a 50 percent jump in the share price to $3.74.

The company will pay a dividend of 9 cents per share with full tax credits, up from the 6cps interim dividend for 2001.

Earnings per share jumped to 22.4c per share from 9.6cps in the same period a year ago.

"The latest result continues a trend of strong earnings growth over the past two years, driven by internal improvement programmes and buoyant market conditions," chief executive Ralph Waters said in a statement today.

All divisions of the company had lifted earnings in the December half-year.

"Market conditions in both New Zealand and Australia remained strong, and our operations were positioned well to take advantage of this following improvements in operational efficiency, overheads and prices during the past two years," he said.

"From a strategic point of view, the highlight of the period was clearly the acquisition of the Laminex group in Australia, which diversified the company's revenue and earnings base.

"The sale of the company's operations in Bolivia was also a significant development.

"These changes were accompanied by a series of initiatives to provide acquisition funding and refinance the company's existing borrowings."

He warned that weakening economic growth in the key trans-Tasman markets could undermine the result in the second half of the financial year, compounded by a stronger New Zealand dollar.

However, he anticipated a "satisfactory" full year result.

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