Fletcher Building has reconfirmed its expectations of earnings before interest and tax (Ebit) to be in the realm of $855 million – or better – for the 2023 financial period.
Chief executive Ross Taylor told the New Zealand stock exchange (NZX before Fletcher’s annual meeting today that trading in the products and distribution divisions across New Zealand and Australia remained “in line with expectations”.
“We are watching lead indicators closely and we have a clear playbook if activity shows any signs of softening in the next six to nine months,” he said.
While it was expected, house prices and margins were still running at about 10% below the peak levels reached in December 2021.
Taylor said house sales volumes had been mixed in the 2023 financial period so far, “solid” through July and August but “softer” in September.
However, customer visitation levels had been “picking up positively” into the spring sales season.
Group earnings and cash flows were expected to be weighed down for the company’s second half due to the timing of revenues and working capital builds in Fletcher’s residential development and construction divisions.
“We reconfirm our FY23 Ebit target of $855 million or better,” Taylor said.
Fletcher Building lifted its annual net profit to $432m or 42% in the year ended June, beating its own guidance for operating profit. Its Ebit before significant items came to $756m – up from the company’s $750m guidance.
