Fletcher Building posts first profit since 2023
Wednesday, 18 February 2026
Fletcher Building has reported a “steady” performance in its half year results, but says volumes remain soft across much of the group, and conditions have been challenging.
The construction giant has struggled through turbulent times of late, and is now going through a transformation plan, which includes the recently-announced sale of the group’s construction division.
But in results released to the NZX on Wednesday it announced net profit of $45 million from continuing operations over the six months to December.
That was in contrast to a reported loss of $88m over the same period last year, and it was the first positive result in that space since June 2023, Fletcher Building chief executive Andrew Reding said.
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At $2.86 billion revenue was down just 0.5% from the previous year, and the company’s earnings before interest, tax, and depreciation (Ebit) was $145m, $2m lower than in the first half of 2025.
Margin pressure in parts of the portfolio was partially offset by structural cost reductions and operational improvements, the company said.
Cash from operating activities increased to $156m from $87m the previous period, which the company said reflected improved working capital management and cost-out benefits.
Net debt came in at $1,164m, compared to $999m over the same period last year, but below the company’s expectations.
But the company did not declare any dividends for shareholders.
Reding said the first half of the year was another demanding period for the building industry, with subdued markets across New Zealand and Australia.
Conditions differed between the first and second quarters, but the better, more stable second quarter was not enough to offer the difficult first quarter, he said.
“Our core manufacturing businesses held up well, and made up for weakness in the construction and residential divisions, supported by disciplined cost control and better operational execution.”
The company had continued to make progress on the turnaround plan, reshaping the company into a simpler, more focused building products manufacturing and distribution group, and strengthening the balance sheet, he said.
“The sale of the construction division is a significant step forward in delivering a simplified portfolio, resilient capital structure and improved shareholder returns.”
Following transaction adjustments and costs, the cash proceeds from the sale to French multinational Vinci Construction were estimated to be $300m to $315m, and the company would use it for the reduction of net debt.
Any potential cashflow and cost out benefits from the sale were likely to be seen from the 2027 financial year onwards.
In November, the company announced it was reviewing its residential division, and Reding said that as there was $1 billion tied up in the division they were working to understand the best options for that capital.
Meanwhile, across the divisions light building products and distribution volumes had been flat or modestly positive, while heavy building materials volumes were flat to down, he said.
“Volumes in the residential and development division were lower than anticipated over the first half, 27% down on the previous year, and cautious buyer behaviour is at play.”
“Margin compression remains a challenge across a number of business units, but cost out initiatives in business units, divisions and corporate have helped support profitability and operating leverage should provide upside as volumes recover.”
Reding said residential and civil demand was likely to remain relatively subdued through the financial year.
Activity would improve, but it would not improve significantly in the short-term, and he did not anticipate a more meaningful recovery until calendar year 2027, he said.
“Looking ahead, we expect the benefits of actions already taken on costs, portfolio simplification, and capital discipline to progressively support performance as market conditions improve.”