Fletcher Building Limited

Revenue from continuing operations increased 7.3% to just under $6 billion. EBIT before significant items rose to $414 million, up $85 million year over year; excluding preannounced property sales, EBIT was $362 million, an 11% improvement. Earnings per share were positive at $0.212, versus a loss in the prior year period, and net earnings were $228 million versus a loss of $419 million last year. Net cash from operating activities increased to $715 million from $214 million, normalized operating cash flow was $707 million, and net debt declined to $637 million from $999 million. FY27 guidance was cautious: management said it does not expect a meaningful recovery in underlying volumes until calendar year 2027, capex is expected to fall to approximately $170 million, and interest costs are expected to be around $60 million in FY27, excluding lease interest of approximately another $65 million to $70 million.

Andrew Reding framed FY26 as the end of the first stage of the turnaround, emphasizing portfolio simplification, a leaner cost base, and stronger discipline on ROIC. He said the company is now focused on finding growth inside the core and continuing to simplify the portfolio, while also resetting the dividend policy only once sustainable free cash flow and balance sheet targets are met. His tone was upbeat on execution but cautious on the operating environment, repeatedly stressing uncertainty and saying a meaningful volume recovery is still likely only in calendar 2027.

William Wright highlighted the financial improvement: continuing revenue up 7.3% to just under $6 billion, EBIT before significant items up to $414 million, EPS of $0.212, and operating cash flow of $715 million. He pointed to $40 million of total group significant items, investment capital down to $5.5 billion from $5.8 billion, capex below guidance at $288 million, and FY27 capex expected to step down to about $170 million. He also said net debt fell to $637 million and noted FY27 interest costs are expected to be around $60 million on debt, plus approximately $65 million to $70 million of lease interest.

Analysts focused on how much of the second-half improvement was sustainable versus pulled forward by price increases, with management saying some demand may have been pulled forward, especially in Iplex Australia and Iplex New Zealand, but that the exact amount is hard to know. Management also said volumes in both Iplex businesses have already pulled back so far in the current quarter. On Distribution, Wright said the business is seasonally weighted to the second half because rebates are recognized late in the year, and he expects a slightly better first half this year than last year. Questions on ROIC drew a cautious response: management said it is prioritizing getting ROIC up to WACC first, with business-specific improvement plans underway, but declined to set higher long-term targets yet.