Worst Over says Fletchers

Worst Over says Fletchers

The second half of 2009 was the trough for the Fletcher Building business, chief executive Jonathan Ling told business media during a lunchtime briefing on the company's FY10 results.

“We think the worst of the recession is over,” he told the briefing.

The company is focused on its home markets of Australia and New Zealand as it works through the remainder of the economic slowdown keeping its balance sheet powder dry as far as spending is concerned, says daily investment news site www.headliner.co.nz

The residential construction business usually generates half of the group's business not just in actual building but in building products and steel. Ling noted that building consents rose 13% in the June year but cautioned that residential activity remains uncertain.

The FY10 results show net earnings aided by improved housing starts in NZ and Australia, as well as continued infrastructure spending by governments in both countries. Commercial activity is down in all key markets.

"We saw a bit of a lift in the latter part of 2H109 but are not yet seeing much growth."

He told The Headliner that residential consents are tracking 16,000-17,000 which is "very low considering that the long term average is 22-24,000."

In the June 2010 year NZ residential consents totalled 16,022, up from 14,175 in June year 2009 but well below 23,261 achieved in the year to June 2008.

He did not think the rate of consent applications was influenced by the Official Cash Rate. "Confidence is the big issue," he told Headliner editor Warren Head.

Full story and results story on: www.headliner.co.nz

ENDS

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