NZ-based Fletcher Building is returning to the list of companies paying dividends after a break of 18 months following a 48% jump in first-half profit.
The company – Australasia’s second biggest building products group – said net profit rose to $NZ121 million in the six months to the end of December, from $NZ82 million in the same period last year.
The profit includes $UZ86 million of one-time charges for restructuring and its Australian Rocla concrete business.
The company will pay an interim dividend of 12 NZ cents a share (the last was paid in August, 2019) and a final is now on the cards for the first time in two years.
“The Board is pleased to declare an interim dividend of 12 cents per share,” the company told the NZX and ASX on Wednesday.
“Given the strength of the Group’s performance and balance sheet, the Company has been able to put in place an updated banking agreement with its lenders which allows the Company to pay an interim dividend and retains the more favourable covenant levels until Jun 2021.
“The Board also expects to be in a position to approve a final FY21 dividend.
“Current indicators point to core volumes in NZ and Australia remaining at present levels through the second half, with robust demand for Residential housing in NZ. This market outlook assumes no material impact from COVID-19,” directors told the market.
The improvement came on a 1% rise in revenue for the December half to $NZ3.99 billion.
CEO Ross Taylor took over as boss in late 2017 after it lost millions on major construction projects, especially in a convention centre in Auckland and in rebuilding projects in Christchurch.
However that turnaround was setback by Covid-19 disruptions last year, which prompted Fletcher to further cut the size of the company by closing unwanted business, sacking 1,500 people on both sides of the Tasman (especially at Rocla in Australia). As a result the company posted a $NZ196 million annual loss for 2019-20.
Taylor said on Wednesday that the business outlook is now improving.
“Our strong (first-half) results reflect good progress made on our strategy to drive consistent performance and growth,” he said.
“The improved earnings and profitability are the outcome of initiatives undertaken over the past three years to improve operating disciplines and efficiencies across the group.”
Fletcher’s operating profit rose 47% to $323 million and topping its forecast for $NZ305 million to $NZ320 million.
The company expects full-year operating profit of $NZ610 million to $NZ660 million.
