Fletcher Building trading halt ahead of Government of Western Australia leaky piping announcement

Friday, 30 August 2024

Shares in Fletcher Building have been put in trading halt pending an announcement on Friday from the Government of Western Australia on the Australian leaky piping debacle.

Fletcher Building (FBU) announced last year that 1200 of 15,000 houses constructed in Western Australia using its pro-fit pipes had experienced leaks between mid-2017 and mid-2022, when its Iplex Australia unit stopped selling the product.

BGC, one of the largest users of pro-fit pipes in the state, said there had been just over 3000 total bursts in 1500 Perth homes built by the company.

The scale of the leaky piping problem has led to the Government of Western Australia getting involved.

In an announcement to the NZX this morning as the trading halt began, Fletcher Building said it had previously advised the market concerning complaints received in respect of the Iplex Australia Pro-fit pipe product.

“The complaints relate to leaks in homes, primarily built by group home builders in Western Australia,” it said.

“As previously advised to the market, FBU has been in mediation with stakeholders, including the Government of Western Australia, in relation to the development of a joint industry response to this issue,” the announcement said.

The company now expects the Government of Western Australia to make an announcement on Friday.

“This announcement is expected to outline whether the Government of Western Australia will accept a joint industry response to this issue,” Fletcher Building said.

“This information is believed to be material information in respect of FBU's ordinary shares and accordingly a trading halt in respect of that security is requested.”

Fletcher Building shares have dropped in value by over 40% in the last 12 months as a result of continuing woes at the company.