Fletcher Building shares dive on reduced FY guidance
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More news: Shares in Fletcher Building tumbled at market open on the ASX, after the building supplies company revised down its full-year earnings guidance due to weaker housing market conditions in the second half to date.
Shares were down 9.3% to $2.92 by 10:55am AEST.
Fletcher Building lowers guidance on weaker housing market
The news: Fletcher Building has revised down its full-year earnings guidance, as the building supplies company flagged a double-digit drop in Australia market volumes in the second half to date.
The numbers: Fletcher reduced its full-year EBIT guidance to between NZD500 million ($455 million) and NZD530 million, from a range of NZD540 million to NZD640 million.
The group said that second-half market volumes have moved around 10% lower in Australia compared to the prior corresponding period, and about 5% lower in New Zealand.
The context: Fletcher noted that the updated guidance was primarily driven by "intense price competition" reducing prices and profit margins, plus a "sharp correction" in the Australia residential market. The company also said there has been a "notable slowdown" in New Zealand house sales and an "end to the house price momentum" seen in the first half of the year.
In a turbulent start to 2024, Fletcher has seen its CEO, CFO and chair step down after posting a $113 million half-year loss in February.
What they said: Acting CEO Nick Traber said: "Given the current conditions, our focus has been on managing things within our control, in particular: customer service; costs and margins; cash flows; capital allocation; funding; and closing out the remaining legacy construction projects".
The source: ASX announcement
