Possible sale of Fletcher Construction end of a proud building era
Fletcher Construction may soon be sold and analysts suggest it could be worth up to $340 million. Photo / Getty Images
Today's Fletcher Building is a shadow of the former Fletcher Challenge of the last century.
And Fletcher Construction itself is a shadow of what the great company once was.
Fletcher flagged the potential Fletcher Construction sale at its investor day on June 11 and again on July 22 in an NZX notice.
Fletcher Construction is:
Higgins, the civil construction company that Fletcher bought in 2016;
Brian Perry Civil, bought by Fletcher in 1986;
Fletcher Construction (major projects) division, part of the original 2001 float on the NZX.
Fletcher Living, the company's home-building business, is not included in the sale.
Fletcher Living doesn't come under Fletcher Construction. It is a separate division, headed by the accomplished, experienced Steve Evans, in that role for more than a decade.
Andrew Reding heads Fletcher Building and is looking at divestment options for the Construction businesses.
On the possible Fletcher Construction sale, CEO and MD Andrew Reding said in July: 'Given the quality and strong recent performance of our Construction businesses, and the role they will play in New Zealand's growing infrastructure pipeline, we were not surprised to receive inbound interest for them, which has motivated us to test whether there are attractive divestment options.
'No decision has been made to sell at this time, and we will carefully consider the value of any options presented from this process before deciding whether to move ahead.'
The business says Fletcher Construction has 3700 staff working across the three brands.
'Since 1909, our people have planned, built, maintained and managed significant national infrastructure for the benefit of communities in New Zealand and the South Pacific. We have safety at our core and invest in innovation for the future,' Fletcher Construction said.
In more recent years, Fletcher Construction had three jobs that caused problems:
Auckland's new $1 billion-plus NZ International Convention Centre for SkyCity;
Auckland waterfront's Commercial Bay for Precinct Properties;
Justice & Emergency Precinct in Christchurch.
In 2018, the Herald reported on 14 of 73 projects on its books that are loss-making or on watch.
SkyCity Entertainment Group's NZ International Convention Centre has been a problem project for Fletcher Construction. Photo / Michael Craig
Jobs had gone over the original bid cost and taken far longer than expected.
Underbidding and lack of information flow to the board were two issues blamed then.
The now former-CEO Ross Taylor said in 2018 that Fletcher Building would not be bidding for any further vertical construction work in New Zealand while it concentrated on completing existing projects.
The company said at the time that the building and interiors market 'continues to be characterised by high contract risk and low margins', adding, 'we will no longer work in these conditions'.
SkyCity is suing Fletcher Building and the Fletcher Construction Company for $330 million, saying it had taken 10 years instead of three to build the NZICC.
The claim seeks damages for losses incurred by SkyCity arising from ongoing delays in the completion of the project, including those that resulted from the 2019 fire.
In response, Fletcher said it had already flagged risks associated with the convention centre, it was committed to delivering the project and would vigorously defend itself.
But SkyCity said the NZICC was now nearly six and a half years behind the contractually agreed delivery date of January 2019.
Despite its problems, Forsyth Barr analysts have estimated Fletcher Construction could be worth $230m to $340m.
More may be said about the sale at the company's annual results announcement on August 20.
Anne Gibson has been the Herald's property editor for 25 years, written books and covered property extensively here and overseas.
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
NZ Herald
16 hours ago
- NZ Herald
Possible sale of Fletcher Construction end of a proud building era
The books are said to be a 'story of war and peace, of success and failure, and how New Zealand's premier builder coped in the face of many challenges'. Fletcher Construction may soon be sold and analysts suggest it could be worth up to $340 million. Photo / Getty Images Today's Fletcher Building is a shadow of the former Fletcher Challenge of the last century. And Fletcher Construction itself is a shadow of what the great company once was. Fletcher flagged the potential Fletcher Construction sale at its investor day on June 11 and again on July 22 in an NZX notice. Fletcher Construction is: Higgins, the civil construction company that Fletcher bought in 2016; Brian Perry Civil, bought by Fletcher in 1986; Fletcher Construction (major projects) division, part of the original 2001 float on the NZX. Fletcher Living, the company's home-building business, is not included in the sale. Fletcher Living doesn't come under Fletcher Construction. It is a separate division, headed by the accomplished, experienced Steve Evans, in that role for more than a decade. Andrew Reding heads Fletcher Building and is looking at divestment options for the Construction businesses. On the possible Fletcher Construction sale, CEO and MD Andrew Reding said in July: 'Given the quality and strong recent performance of our Construction businesses, and the role they will play in New Zealand's growing infrastructure pipeline, we were not surprised to receive inbound interest for them, which has motivated us to test whether there are attractive divestment options. 'No decision has been made to sell at this time, and we will carefully consider the value of any options presented from this process before deciding whether to move ahead.' The business says Fletcher Construction has 3700 staff working across the three brands. 'Since 1909, our people have planned, built, maintained and managed significant national infrastructure for the benefit of communities in New Zealand and the South Pacific. We have safety at our core and invest in innovation for the future,' Fletcher Construction said. In more recent years, Fletcher Construction had three jobs that caused problems: Auckland's new $1 billion-plus NZ International Convention Centre for SkyCity; Auckland waterfront's Commercial Bay for Precinct Properties; Justice & Emergency Precinct in Christchurch. In 2018, the Herald reported on 14 of 73 projects on its books that are loss-making or on watch. SkyCity Entertainment Group's NZ International Convention Centre has been a problem project for Fletcher Construction. Photo / Michael Craig Jobs had gone over the original bid cost and taken far longer than expected. Underbidding and lack of information flow to the board were two issues blamed then. The now former-CEO Ross Taylor said in 2018 that Fletcher Building would not be bidding for any further vertical construction work in New Zealand while it concentrated on completing existing projects. The company said at the time that the building and interiors market 'continues to be characterised by high contract risk and low margins', adding, 'we will no longer work in these conditions'. SkyCity is suing Fletcher Building and the Fletcher Construction Company for $330 million, saying it had taken 10 years instead of three to build the NZICC. The claim seeks damages for losses incurred by SkyCity arising from ongoing delays in the completion of the project, including those that resulted from the 2019 fire. In response, Fletcher said it had already flagged risks associated with the convention centre, it was committed to delivering the project and would vigorously defend itself. But SkyCity said the NZICC was now nearly six and a half years behind the contractually agreed delivery date of January 2019. Despite its problems, Forsyth Barr analysts have estimated Fletcher Construction could be worth $230m to $340m. More may be said about the sale at the company's annual results announcement on August 20. Anne Gibson has been the Herald's property editor for 25 years, written books and covered property extensively here and overseas.
Otago Daily Times
4 days ago
- Otago Daily Times
Synlait loss turnaround ‘will take time'
Canterbury-based milk processor Synlait Milk is anticipating a loss after tax of $27million to $40m after manufacturing challenges at its Dunsandel factory. The company announced to NZX the predicted result for the financial year ending July compared with a $182.1m loss the previous year. Synlait had to deal with manufacturing issues at its Dunsandel facility across a range of products, resulting in one-off costs. The company said the challenges had been resolved. The site is now in new-season production after winter maintenance. Earnings of $50m to $68m before interest, taxes, depreciation and amortisation (ebitda) are up on the previous $4.1m loss. A closing net debt balance of $300m was expected. Synlait expected its underlying net profit would break even for the full year. The company was expecting underlying ebitda of $100m to $110m compared with $45.2m previously. Synlait has yet to close its books for the financial year, and the preliminary update remained subject to the year-end wrap up, including an audit. It continues to comply with its banking covenants. Chief executive Richard Wyeth said in a statement that Synlait had strong foundations and its assets were well-located, with the capacity and capability to manufacture complex products in high demand around the world. "The company's recovery had been tracking in line with expectations and while turnaround will take time, I am confident of success," he said He joined Synlait 10 weeks ago.
NZ Herald
28-07-2025
- NZ Herald
NZX futures support $10 milk price for 2026 season amid strong demand
But if that scenario pans out, then dairy's contribution to the economy would increase by about $10 billion over two years, compared to previous, more moderate milk price outcomes of around $8.50/kg, DairyNZ estimates. 'It's very strong at the moment if you are a dairy farmer in New Zealand, with milk price futures sitting at $10/kg,' NZX derivatives sales manager James Atkinson said. 'A lot of dairy farmers - if not all - will be making a profit at that level, so that's a really good sign,' he said. Driving the milk price futures higher have been Global Dairy Trade prices for the two pivotal products, wholemilk powder and skim milk powder. Indications from the smaller 'pulse' auctions - which occur between the GDT auctions - point to another increase at the next auction on August 6. 'Overall, demand has been pretty sticky and robust over a period of time when volumes are increasing in New Zealand,' Atkinson said. 'There is a lot more volume coming on going into spring, and Fonterra is putting volume on the GDT platform, but prices are managing to stay at historically high levels.' NZX's head of dairy, Cristina Alvarado, said global production trends look to be running in New Zealand's favour. 'We know that production in Europe has not gone well for the key countries, Germany and France, with the little ones keeping it afloat,' she said. 'Production in New Zealand has been doing well, but the fact that the other key regions are not doing that well keeps up interest in demand,' she said. Production in the US is also increasing, but the imposition of world trade tariffs is adding an element of uncertainty to that market. Meanwhile, domestic dairy production in China was declining while demand had remained steady, she said. Atkinson added a steady New Zealand dollar at around US58c to US61c had probably helped keep milk price futures at the $10/kg mark. Further out, NZX futures for the 2027 season point to $9.50/kg. ANZ's latest agri report said good pasture growth over winter meant there was no shortage of feed. The bank said a surge in imports of the feed supplement, palm kernel expeller (up 34% in the past year) should provide extra support. Last season's milk production was up 3%, the largest year-on-year gain since 2014-15. 'It is hard to make large gains two years in a row, but, with the stars aligning, growth of 1-3% should be attainable in 2025-26 if the weather cooperates,' the bank said. Jamie Gray is an Auckland-based journalist, covering the financial markets, the primary sector and energy. He joined the Herald in 2011.
