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Fletcher Building half-year profit up 2pc

NZ Newswire logoNZ Newswire 21/02/2017 Jonathan Underhill

Fletcher Building has posted a 2 per cent gain in first-half profit, missing some estimates, after taking a charge against a construction project and costs to close sites.

Net profit was $176 million in the six months ended December 31, from $172m a year earlier, the Auckland-based company said on Wednesday.

Sales rose 4 per cent to $4.61 billion. Excluding one-time items, profit rose to $187m from $159m and both sales and normalised profit were below the forecasts from brokerage Forsyth Barr.

Fletcher's building products division, its largest business, had a 12 per cent decline in revenue while operating earnings dropped 20 per cent including $15m of costs for the closure of Rocla Products and Fletcher Insulation sites, and reflecting lower sales after the divestment of Pacific Steel and Rocla.

Operating earnings from construction fell 33 per cent, which it said reflected "losses on a major project".

Operating earnings from distribution and international activities both rose more than 30 per cent and the company reiterated its guidance for full-year earnings before interest, tax and significant items in a range of $720m to $760m.

It declared a first-half dividend of 20 cents a share, fully imputed, up 5 per cent from a year earlier. Forsyth Barr was expecting a dividend of 21 cents.

Fletcher's shares last traded at $10.21 and have surged 54 per cent in the past 12 months, outpacing the S&P/NZX 50 Index's 16 per cent gain.

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