Ann: HALFYR: FBU: FBL Financial Results for six m

• Release Date: 22/02/12 11:00
• Summary: HALFYR: FBU: FBL Financial Results for six months to 31 December 2011
• Price Sensitive: No
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FBU
22/02/2012 09:00
HALFYR

REL: 0900 HRS Fletcher Building Limited

HALFYR: FBU: FBL Financial Results for six months to 31 December 2011

Name of Listed Issuer: Fletcher Building Limited

For Half Year Ended: 31 December 2011

The amounts as presented have been prepared in accordance with NZ IAS 34
Interim Financial Reporting and give a true and fair view of the matters to
which the report relates and are based on unaudited accounts.

CONSOLIDATED OPERATING STATEMENT FOR THE HALF YEAR ENDED 31 DECEMBER 2011

Unaudited

Current Half Year NZ$'M; Up/Down %; Previous Corresponding Half Year NZ$'M

Total operating revenue: $4,509m; up 30%; $3,468m.

OPERATING SURPLUS BEFORE UNUSUAL ITEMS AND TAX: $204m; down 13%; $234m.

Unusual items for separate disclosure: $(21)m; n/a; 0.

OPERATING SURPLUS BEFORE TAX: $183m; down 22%; $234m.

Less tax on operating profit: $35m; down 44%; $63m.

OPERATING SURPLUS AFTER TAX BUT BEFORE MINORITY INTERESTS: $148m; down 13%;
$171m.

Less minority interests: $4m; down 20%; $5m.

OPERATING SURPLUS AFTER TAX ATTRIBUTABLE TO MEMBERS OF LISTED ISSUER: $144m;
down 13%; $166m.

Extraordinary items after tax attributable to Members of the Listed Issuer:
0: n/a: 0.

OPERATING SURPLUS (DEFICIT) AND EXTRAORDINARY ITEMS AFTER TAX ATTRIBUTABLE TO
MEMBERS OF THE LISTED ISSUER: $144m; down 13%; $166m.

Earnings per share:  21.2 cps; down 22%: 27.3 cps

Interim Dividend:  17 cps

Record date: 30 March 2012

Date Payable: 18 April 2012

Tax credits on latest dividend: nil NZ imputation credits, fully franked for
Australian shareholders.

Auckland, 22 February 2012 - Fletcher Building today announced its unaudited
interim results for the six months ended 31 December 2011.  The group
recorded net earnings after tax of $144 million, compared with $166 million
in the prior corresponding period.

Operating earnings (earnings before interest and tax) were $256 million, 10
per cent lower than the $285 million achieved in the first half of the 2011
financial year.

The result includes unusual expenses totalling $15 million after tax incurred
to date in restructuring the Laminex business.

Net earnings before unusual items were $159 million, 4 per cent lower than
the prior corresponding period. Operating earnings before unusual items were
$277 million, 3 per cent lower than the prior corresponding period.

Cashflow from operations was $129 million compared with $202 million in the
first six months of the 2011 financial year. The reduction was due to a net
increase in working capital including cash payments for land purchases, along
with higher funding costs and cash tax payments.

The interim dividend will be 17.0 cents per share. In line with the company's
approach to allocating tax credits, the dividend will be fully franked for
Australian tax purposes but will not be imputed for New Zealand tax purposes.

Total revenue for the group increased 30 per cent, as a result of the
acquisition of Crane, with underlying revenues on a like-for-like basis
excluding Crane declining by 5 per cent.

Chief Executive Officer Jonathan Ling said the result was a creditable
outcome given the tough trading conditions and low volumes in most markets.

"As we outlined in October, earnings have been negatively impacted by low
levels of activity in the New Zealand construction industry. This is
particularly the case with new house building activity, with approvals in
2011 the lowest in the 46 years since records began.

"Australia was already slowing at the start of the year, and there has been a
pronounced decline in new residential construction there over the past six
months.

"Consequently, all of our businesses exposed to the residential markets in
both countries have experienced lower volumes and reduced earnings," Mr Ling
said.

In response to the low volumes and margin deterioration in Laminex, a
thorough review is being undertaken to determine how to achieve a step-change
in the cost structure of the business. This goes beyond the restructuring
undertaken in 2009, which addressed the manufacturing footprint and product
profitability. The current review encompasses the go-to-market model and the
profitability of ancillary activities that support the core Laminex product
range. Additionally, further product rationalisation, coupled with closer
integration of the Formica and Laminex product ranges, are expected to result
in procurement efficiencies.

Costs totalling $21 million were incurred in restructuring Laminex's
operations in the period to 31 December 2011. As a result of further
restructuring activity to be undertaken in the period to June 2012, Fletcher
Building expects to incur an additional $40 to 50 million in unusual costs in
Laminex in the second half of the 2012 financial year.

Fletcher Building is also undertaking a strategic review of its Australian
and New Zealand insulation businesses. The outcome of the review may result
in additional costs being incurred to improve the performance of these
businesses.

"The sudden decision by the Australian government two years ago to terminate
the insulation subsidy scheme has been disastrous for the domestic insulation
manufacturing industry. The dislocation of the industry could not have
happened at a worse time, with the strong Australian dollar undermining the
competitiveness of domestically manufactured product. Given the change in
market dynamics, we are undertaking a strategic review to determine what will
be required to generate satisfactory returns in this business in the future",
Mr Ling said.

For the full year, net earnings before unusual items are expected to be in
the range of $310 million to $340 million, compared with $359 million in the
prior financial year. The guidance assumes very modest increases in new
housing construction in New Zealand, no improvement in Australian residential
building activity and reflects the magnitude 6.3 earthquake which occurred in
Canterbury on 23 December 2011 which has further set back reconstruction
activity.

Results overview

Comparisons are with the prior corresponding period.

* Total sales of $4,509 million, up 30 per cent from $3,468 million
* Operating earnings:
o Operating earnings of $256 million, down 10 per cent from $285 million
o Operating earnings before unusual items of $277 million, down 3 per cent
from $285 million
* Net earnings:
o Net earnings of $144 million, down 13 per cent from $166 million
o Net earnings before unusual items of $159 million, down 4 per cent from
$166 million
* Cashflow from operations $129 million, down 36 per cent from $202 million
* Earnings per share:
o Earnings per share: 21.2 cents,  down 22 per cent from 27.3 cents
o Earnings per share before unusual items: 23.4 cents, down 14 per cent from
27.3 cents
* An interim dividend of 17.0 cents per share, fully franked for Australian
tax purposes, up 6 per cent from 16.0 cents per share
* Interest cover at 3.8 times, down from 5.6 times
* Capital expenditure of $154 million, up from $148 million

For further information please contact:

Philip King
General Manager Investor Relations
Phone:  + 64 9 525 9043
Mobile: + 64 27 444 0203

ENDS
End CA:00219832 For:FBU    Type:HALFYR     Time:2012-02-22 09:00:04