Momentum in Christchurch's reconstruction has underpinned a full-year result for Fletcher Building slightly above brokers' expectations, but work in Australia and the United States remains sluggish.
For the year ended June, Fletcher booked a 4% decline in total operating revenue, from $8.83 billion to $8.51 billion, but with after-tax profit up 76%, from $185 million a year ago to $326 million. Last year's result was hit by charges.
Fletcher shares had traded as low as $8.18 earlier in the week but, following yesterday's result, were up about 6% at $8.72. A final dividend of 17c per share took the year's dividend to 34c.
Craigs Investment Partners broker Peter McIntyre said the result was ''slightly ahead of expectations'' and, while not the historical Fletcher ''over-delivery'', should be giving confidence to investors.
''Investors can see through [weakened] 2013 into 2014 and 2015, where work is looking more positive. Fletcher's $75 million to $100 million restructuring, over the next three years, is another positive,'' he said.
Forsyth Barr broker Peter Young said there were ''few surprises'' in individual divisional results and earnings before interest and tax (ebit) at $569 million were in line with the brokers' and analysts' forecasts.
''The New Zealand business continues to benefit from a sustained improvement in trading conditions,'' Mr Young said.
However, Australia remained ''weak'', with a 22% decline in Ebit.
He said that during 2014, while New Zealand work would have ''positive momentum'', Australian housing would ''weigh heavy'' on forecasts, the United States and Asian work would remain ''mixed'' and Europe ''suppressed''.
Fletcher's chief executive, Mark Adamson, said the result was driven ''by a sustained improvement in trading conditions in New Zealand'', but that was offset by weak Australian construction.
''In New Zealand, our operating earnings before significant items increased by 38%.
This was driven by rising levels of new house-building activity and strong momentum with the repairs and rebuilding work in Canterbury,'' he said in a statement.
Australian conditions deteriorated early in the year and continued to be soft, with weak residential and commercial markets and a slowdown in mining and resources investment having a knock-on effect across the construction industry.
''Consequently, operating earnings before significant items from our Australian businesses fell by 22%,'' he said.
