Ann: FORECAST: FBU: Fletcher Building ASM Outlook Statement FY16 Media Release

• Release Date: 17/11/15 10:18
• Summary: FORECAST: FBU: Fletcher Building ASM Outlook Statement FY16 Media Release
• Price Sensitive: No
• Download Document  5.01KB

					FBU
17/11/2015 10:18
FORECAST
PRICE SENSITIVE
REL: 1018 HRS Fletcher Building Limited

FORECAST: FBU: Fletcher Building ASM Outlook Statement FY16 Media Release

News Release

STOCK EXCHANGE LISTINGS: NEW ZEALAND (FBU), AUSTRALIA (FBU).

Fletcher Building Annual Shareholder's Meeting
Outlook for the 2016 Financial Year

Auckland, 17 November, 2015 - Fletcher Building chairman Sir Ralph Norris
today
addressed shareholders at the company's annual meeting and provided financial

guidance for the financial year ended 30 June 2016. The following commentary
on the
operating and financial outlook for the year was provided at the annual
shareholders'
meeting, and the additional commentary below is provided to support that
guidance.

Outlook

"We expect the current strong market conditions in the New Zealand
construction
industry to persist through the 2016 financial year, with ongoing demand for
new housing
particularly in Auckland and surrounding provinces, an increase in commercial

construction activity off the back of the significant increase in the value
of consents, and
government expenditure on infrastructure to remain at the present healthy
levels.

"In Australia, the outlook is more mixed. Residential construction activity
may slow
particularly in the multi-dwelling segment, while stand-alone housing should
be more
resilient to potential changes in foreign capital inflows. Commercial
construction activity is
unlikely to lift from current levels. Continued federal and state government
fiscal deficits
are likely to mean that infrastructure activity is further constrained.

"Residential and commercial construction activity levels in North America are
expected to
remain broadly consistent with the past year. European conditions are likely
to remain
mixed with a generally weak economic outlook. Further volume growth is
expected in
South East Asian markets but market conditions in China are likely to remain
highly
competitive.

"In terms of financial guidance, we expect operating earnings, that is
earnings before
interest, tax and significant items, to be in the range of $650 million to
$690 million. This
compares with operating earnings of $653 million earned in the prior year

"In comparing year over year performance, it is important to adjust for those
businesses
that we have sold, such as Pacific Steel and Rocla Quarries, together with
other earnings
streams which by their nature are set to decline such as EQR and the
Stonefields
residential development.

"If we normalise operating earnings for the 2015 financial year to reflect
these changes in
our business activities, the relevant prior year comparator earnings figure
would have
been $610 million. Therefore, operating earnings in the range of $650 to $690
million will
represent solid growth year on year from our continuing business operations,"
Sir Ralph
said.

Additional guidance for the financial year ended 30 June 2016

In relation to the guidance, the following additional commentary has been
provided to
shareholders:

-Full year operating earnings exclude the expected pre-tax profit from the
sale of the
Rocla Quarries business of approximately A$100 million
-Full year corporate costs are expected to be $64 million, driven by
increased
investment in business transformation programmes
-Half year earnings are expected to be lower than for the prior corresponding
period
due to:

o
Lower construction earnings, with reduced activity in the South Pacific and
the timing of earnings recognition on a number of key New Zealand projects
o
Lower residential development earnings
o
Lower Australian Distribution earnings due to restructuring costs in
Tradelink.
o
Increased operating losses in Formica Europe due to restructuring costs in
the UK
Specific divisional commentary in respect of 2016 full year earnings is
provided as
follows:

-
Heavy Building Products:

o
Improved operating performance expected from Iplex Australia
o
Reduced contribution from Rocla Quarries, with the sale of this business
expected to be completed in January 2016
-Light Building Products:

o
Most businesses in the division are expected to deliver higher earnings than

the prior year
-Laminates & Panels:

o
Operating losses in the European business will limit divisional earnings
growth
-
Construction:
o
Reduced earnings from EQR and South Pacific will be partly offset by higher
earnings in the Infrastructure and Building & Interiors businesses
o
Residential earnings are now expected to be only slightly lower than for last

year, with reduced earnings from the Stonefields development replaced by
new developments elsewhere in Auckland
-
Distribution:
o
New Zealand distribution businesses are expected to achieve increased
earnings in FY 2016 compared with the prior year
o
Despite the restructuring costs in Tradelink in the first half, full year
results
are expected to be higher than for the prior year.

For further information contact;

Philip King
Group General Manager,
Investor Relations & Capital Markets
Phone: + 64 9 525 9043
Mobile: + 64 27 444 0203

ENDS
End CA:00273550 For:FBU    Type:FORECAST   Time:2015-11-17 10:18:30