Fletcher Building reported a NZD 228 million net profit for the fiscal year ended June 2026, reversing a NZD 419 million loss in FY2025, as the construction materials group completed the first stage of its turnaround plan.
Revenue from continuing operations increased 7.3% year-on-year to NZD 6.0 billion, while earnings before interest and tax before significant items rose 26% to NZD 414 million. Excluding property sales, EBIT climbed 11% to NZD 362 million. Earnings per share reached NZD 0.212, compared with a loss in the prior year. Operating cash flow surged to NZD 715 million from NZD 214 million, and net debt declined to NZD 637 million from NZD 999 million, bringing leverage within the target range of NZD 400 million to NZD 900 million.
The group’s return on invested capital improved to 5.3%, or 4.7% excluding land sales, up from negative levels previously. Inventory declined by about NZD 75 million through working capital discipline, while capital expenditure totaled NZD 288 million, below guidance. The debt-to-equity ratio stood at 0.69, with a current ratio of 1.5.
Divisionally, light building products earnings grew 22%, driven by a 4% volume increase at Winstone Wallboards and double-digit ROIC at Fletcher Insulation in Australia. Heavy building materials earnings rose 8%, with Winstone Aggregates achieving double-digit ROIC in the second half. Distribution returned to profitability in the second half after a weak start.
Management highlighted operational progress, including the opening of a new frame and truss plant in Auckland in June 2026, which is expected to convert every NZD 1 of sales into NZD 4.20 of higher-margin balance-of-house sales. The Urban Quarry network expanded with a new site in Tamahere, where tonnage rose 28% and clean fill increased 35%. The Tauriko OSB plant is slated to open by the end of 2026, though setup costs will delay net benefits until FY2027.
Safety performance showed a Total Recordable Injury Frequency Rate of 3.7, though the company noted the loss of a team member in a crane incident in Whangarei last July. Employee engagement improved with a net promoter score of 59, while women accounted for 24% of leadership roles. Sustainability efforts saw 76% of revenue derived from certified products, and Golden Bay Cement ranked in the top quartile of low-carbon producers globally.
Looking ahead, Fletcher Building expects capital expenditure to fall to about NZD 170 million in FY2027, with debt interest costs projected at NZD 60 million. Management does not anticipate a meaningful recovery in underlying volumes until calendar 2027. Dividend policy remains contingent on achieving positive, sustainable free cash flow and meeting balance sheet targets.
Shares rose 5.52% to close at NZD 3.25, near the top of the 52-week range of NZD 2.22 to NZD 3.44.
