Fletcher Building folds Australian arm into two divisions
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The news: Fletcher Building has folded its Australian division into two trans-Tasman divisions, which will see the head of Australia leave the business.
The context: The two trans-Tasman divisions will be light building products and heavy building materials.
Oliveri Australia, Iplex Australia, Laminex Australia and Fletcher Insulation will join the light building products division, while Stramit will be folded into the heavy building materials division.
The restructure is the result of a strategic review which will also see chief executive of the former Australian division, Gareth O’Reilly, leave Fletcher.
Fletcher’s three other divisions — distribution, construction and residential and development — and executive team roles remain unchanged.
Fletcher noted that it anticipated another $15 million in annualised savings in structural costs in the short term after a further review of the company’s corporate structure was conducted.
This was on top of the targeted $200 million of cost out for FY25.
Earlier this year, the company posted a net loss of NZD134 million ($122.9 million) for the first-half on slowing demand and inflationary pressures.
What they said: Fletcher group CEO Andrew Redings said: “Our businesses will operate with greater accountability, supported by a streamlined Group centre. We are in the process of working through these proposed changes as we devolve activities into our operating divisions and business units”.
“... Since our interim results, our businesses have seen no significant improvement in market conditions, with market volumes continuing to be challenging due to macroeconomic uncertainties and the lack of any material momentum in the recovery of New Zealand’s economy.
“Our businesses operating in the commercial and infrastructure segments continue to face reduced or deferred spending, partly due to recent weather events and reduced sub-division activity. Meanwhile, residential property sales also remain at subdued levels, reflecting lower levels of liquidity across the market.”
The source: ASX
