Fletcher Building placed its shares on a trading halt yesterday as the market awaits its review of the underperforming Building + Interiors division, the project portfolio of which posted a $292 million loss.
About half of Fletcher's construction division's total $2.8billion work for the year to June was done by B+I, where all but one of about 20 projects was understood to have been done on fixed-price contracts, including Auckland's conference centre and the Christchurch justice precinct.
Reported profit for the overall Fletcher group plunged 79.7% to $94 million, for its year to June.
Its chief executive of five years, Mark Adamson, left abruptly in July; foregoing $8million in bonuses.
A new chief executive is expected to be announced today, at Fletcher's annual shareholders meeting.
Yesterday, Fletcher shares were down 15.5% on a year ago, sitting on $7.96.
The B+I losses came from a combination of complex design issues, inadequate project management and stretched resourcing within the under-pressure construction market.
Fletcher said in a statement yesterday an independent review of B+I's two largest projects, understood to be Auckland's conference centre and the Christchurch justice precinct, would include the impact of B+I's financial performance on its earnings guidance for full-year 2018, which will be announced today.
The Auckland shareholders meeting was expected to be contentious, after chairman Ralph Norris said earlier this month the company had taken on board criticism from the New Zealand Shareholders' Association, BusinessDesk reported.
The association had raised concerns about the company's performance and communication with investors and plans to address issues, including directors' fees, at this month's annual meeting.
The shareholders association surveyed its members for their views on Fletcher last month with almost 90% of the 250 members wanting changes at board level, including 8% who wanted the entire board dumped.
More annual meetings also loomed on the local front this week. There might be trading updates from Metlifecare, Skellerup, Auckland Airport, Freightways or Meridian Energy, Craigs Investment Partners broker Peter McIntyre said.
It was also a busy week in Australia. ANZ Bank was due to report a full-year result, as well as quarterly updates coming from Wesfarmers, Resmed and AMP. Dexus, Stockland, Crown and APA Group, among others, would hold annual meetings.
