A big annual meeting in Auckland this morning (starts around 8.30am Eastern Australian Summer Time) for Fletcher Building with no only the much anticipated earnings guidance for 2017-18 expected, but an explanation for the sharp slide in profit in the year to June and why the CEO Mark Adamson had to go and the name of his replacement expected.
Fletcher Building is New Zealand’s biggest construction and building supplies company and the ASX and NZX yesterday granted its request for a trading halt trading halt until later today to allow it to time to work out a number of items for announcement to the meeting.
Primarily the company wants time to assess the results of a review of its struggling building unit and whether that will impact earnings guidance for the current year.
KPMG has been conducting the review of two troubled projects in Christchurch and Auckland after delays and higher costs led to a shock 80% slump in profit for the year to June 30.
Fletcher said it requested the trading halt while it reviewed "the financial performance of its Building + Interiors business unit … and the impact of that financial performance on earnings guidance for the 2018 financial year."
"The Company is taking the necessary time to carefully consider this matter," it added. Fletcher did not provide earnings guidance with its 2017 annual results because of the review. Reuters reckons Fletcher will post a $NZ448.5 million net profit in the 2017-18 financial year, up from $NZ94 million in 2016-17.
In July, Mr Adamson, the company’s CEO stepped down after Fletcher was forced to make a number of profit downgrades because of cost overruns and other problems with the two projects.
Fletcher said it expects to announce a new CEO prior to today’s meeting ad the start of trading in NZ.
Fletcher shares (FBU) shares were up 0.3% yesterday $7.22 before the suspension. The shares have fallen more than 30% year to date in 2017.
