Builder enemy of Auckland golfers
Fletcher’s land purchases slow but it is still shopping for golf courses.
The country’s biggest construction firm still believes there is a housing shortage in Auckland.
But the self-described ‘‘enemy of the golfer’’ now thinks it has invested in enough land over the past three years or so as it turns to building on it.
The strength of New Zealand’s economy helped boost profit at Fletcher Building, which said yesterday that its after-tax profit for the six months to December 31 was up 2 per cent to $176 million.
Revenue rose 4 per cent to $4.6 billion, as the company’s New Zealand businesses grew and the purchase of the Higgins contracting business came through.
Fletcher Building chief executive Mark Adamson said the company’s distribution and international businesses had driven the improved result.
‘‘The strength of the macroeconomic environment in New Zealand has helped the performance of the distribution businesses but it has also managed the mixed economic conditions in Australia to report operating earnings of $84m versus $64m last year.
‘‘Across New Zealand we were pleased to see operating earnings, excluding the … construction division and divested and acquired businesses, increase 20 per cent year on year, indicating the positive impact of continued demand across the residential building and infrastructure sectors.’’
The company expected the strong economic conditions to continue throughout the year, particularly as there was strong demand for new housing in Auckland and the surrounding regions as well as for national infrastructure and commercial projects.
It believed these elevated levels of construction would continue for the medium term.
Fletcher Building chief financial officer Bevan McKenzie said it had invested in two areas in particular over the past three years.
‘‘In residential land and development, notably in Auckland, where we continue to believe there is a structural housing shortage, and our acquisition of the Higgins road pavement and maintenance business. This means we’re well positioned to take advantage of these strong sectors,’’ he said.
Adamson said the company had slowed down its acquisition of land a little bit, however.
The company had realised four years ago it had the Stonefields site in Auckland but nothing else in the pipeline, and had since built that out.
‘‘I think we’re approaching a point where we have enough land to build against and we’ll see that investment slow as we go forward.
‘‘We’re always looking for golf courses; we’re the enemy of the golfer in Auckland.’’
Adamson said it had worn a loss in the order of tens of millions of dollars on a big project.
But other than to say it was a current job, he declined to give further detail.
‘‘It’s a really detailed programme management issue which I don’t really want to go into the detail of it here, it would take two hours to explain the nature of it.
‘‘I think suffice to say, we now have our arms around it.’’
Fletcher declared an interim dividend of 20 cents a share.