Troubled construction giant enters trading halt

Fletcher Building shares have been placed in a trading halt at the company’s request, as the construction giant considers the financial performance of one of its key business units.

In a statement to the New Zealand stock exchange, Fletcher Building said it was reviewing the performance of the Building and Interiors (B&I) business unit, including the findings of a KPMG probe into the unit’s two largest projects, and the impact this would have on its financial performance.

The company did not say which of its projects were covered by the review.

Fletcher Building has had wellpublicised problems with the Justice Precinct in Christchurch, which has been hit by a series of repeated delays.

Other major projects in the division include the convention centre at SkyCity and Precinct Properties’ Commercial Bay development, both in Auckland.

Shares were expected to remain in the trading halt until today, the Fletcher Building’s statement said, when the company would hold its annual meeting.

‘‘The company is taking the necessary time to carefully consider this matter,’’ it said.

Investors in Fletcher Building have had a difficult year, with shares falling by more than 15 per cent over the last 12 months.

Over the same period, New Zealand’s benchmark NZX 50 index has climbed more than 16 per cent.

In March the company cut its guidance for the 2017 financial year by $110 million. In July it issued another profit warning as it announced chief executive Mark Adamson was leaving.

Grant Davies, an investment adviser at Hamilton Hindin Greene, said the recent performance of the company had left negative feelings in the market.

‘‘Coming from a once bitten, twice shy, or twice bitten, thrice shy even, then it’s understandable people will be taking a fairly negative view until they get the actual numbers through,’’ Davies said.

Fletcher said it expected to announce a new CEO today.