Fletcher Building announces FY25 Results
Fletcher Building Limited, 810 Great South Road, Penrose, Auckland 1061, New Zealand
20 August 2025
Fletcher Building announces FY25 Results
Fletcher Building announced today its full year financial results for FY25.
• Revenue: $7.0 billion, down 9% on FY24
• EBIT before Significant Items: $384 million, $125 million lower than FY24
• EBIT margin before Significant Items: 5.5%, compared with 6.6% in FY24
• Significant Items: $702 million total, $644 million relating to continuing operations
• Net loss: $419 million, versus $227 million in FY24
• Net cash from operating activities: $501 million, down from $588 million in FY24
• Capital and investment expenditure: $313 million, down from $420 million in FY24
• Net debt: $999 million, reduced from $1.77 billion at 30 June 2024
• Return on invested capital (ROIC): 4.5%, compared with 5.5% in FY24
Commenting on the result, Fletcher Building Managing Director & CEO Andrew Reding
said: "FY25 has been one of the most demanding years in recent memory, both for Fletcher
Building and the industries in which we operate. Our businesses faced tough market
conditions, as well as undertaking significant internal change, and addressing legacy
issues. However, significant progress has been made on our strategic plan to reposition
the business for more sustainable returns going forward.
Financial summary
Revenue for the year was $7.0 billion, down 9% on FY24, reflecting softer demand across
all our markets. EBIT before Significant Items of $384 million was $125 million lower than
the prior year, resulting in an EBIT margin of 5.5%, compared with 6.6% in FY24. We
recorded a net loss of $419 million, compared with a $227 million loss last year, primarily
driven by the difficult trading environment and one-off Significant Items previously signalled
to the market.
Operating cash flows remained solid at $501 million, albeit lower than the $588 million
achieved in FY24, while disciplined capital management saw capital and investment
expenditure reduced to $313 million from $420 million in the prior year.
Significant progress was made in strengthening our balance sheet, reducing net debt to
$999 million from $1.77 billion at 30 June 2024 thanks to a successful capital raise, the
divestment of Tradelink and a focus on cost control and heightened discipline with respect
to capital expenditure.
Strategy setting
The streamlined, decentralised organisational structure and refreshed strategy unveiled at
our recent Investor Day builds on our core strengths in the manufacturing and distribution
of building products. As part of this strategic focus, we have previously confirmed a review
of divestment options for our Construction businesses, and have similarly initiated a
strategic review of our Residential & Development business. These reviews are designed
to simplify our portfolio, sharpen our operational focus, and unlock value for shareholders.
While there is no certainty that they will result in transactions, any potential cashflow and
cost-out benefits are expected to begin flowing through from FY27, further strengthening
our position for long-term growth.
Legacy issues
We have made solid progress in addressing our longstanding legacy issues. In June 2025,
we reached a settlement with the New Zealand Transport Agency on the Puhoi to
Warkworth motorway project and have recently settled our insurance claims in respect of
the weather and landslips that affected the project. Final finishing and commissioning work
on the New Zealand International Convention Centre (NZICC) remains on track for
handover in 2025, ahead of its planned opening in early 2026. In Australia, the Industry
Response for the Western Australian plumbing issues was signed, with a provision of A$155
million (NZ$170 million) recognised in the first half of the year, and the remediation work of
the participating builders is starting to build momentum.
Outlook
In New Zealand, market volumes are expected to remain low with subdued demand
through FY26. Indicators are mixed in Australia, and it is too early to determine when recent
signals might translate into greater activity and volumes. While the near-term environment
remains uncertain, our focus on cost control, operational discipline, effective capital
allocation and portfolio simplification is positioning Fletcher Building well to both navigate
current headwinds and deliver stronger, more sustainable returns over the medium to long
term.
Thank you
I would like to thank our people for their hard work, resilience, and commitment during what
has been an extremely challenging year. I also want to acknowledge our shareholders for
their ongoing support as we execute on our strategy to boldly reposition Fletcher Building
for long-term success."
ENDS
Authorised for release to the market by Haydn Wong, Company Secretary.
_____________________________________________________________________________________________________________
For further information please contact:
INVESTORS Will Wright, Chief Financial Officer +64 21 490 251 Will.Wright@fbu.com
MEDIA Christian May, Chief Corporate Affairs Officer +64 21 305 398 Christian.May@fbu.com
For information on Fletcher Building visit fletcherbuilding.com
---
Full Year Results
to 30 June 2025
20 AUGUST 2025
Golden Bay –Portland Manufacturing Plant
Important Information
2
This presentation has been prepared by Fletcher Building Limited and its group of companies (“Fletcher Building”) for informational purposes. This disclaimer applies to this
document and the verbal or written comments of any person presenting it.
This presentation provides additional comment on the 2025 Full Year Financial Results dated 20 August 2025. As such, it should be read in conjunction with and subject to the
explanations and views given in that document. Unless otherwise specified, all information is for the 12 months ended 30 June2025.
In certain sections of this presentation, Fletcher Building has chosen to present certain financial information exclusive of theimpact of Significant Items. A number of non-
GAAP financial measures, such as measures before Significant Items, are used in this presentation which are used by management to assess the performance of the business
and have been derived from Fletcher Building’s financial statements for the 12 months ended 30 June 2025. You should not consider any of these statements in isolation from,
or as a substitute for, the information provided in Fletcher Building’s financial statements for the 12 months ended 30 June 2025, which are available at
www.fletcherbuilding.com. Details of Significant Items can be found in note 2.2 of those financial statements.
The information in this presentation has been prepared by Fletcher Building with due care and attention; however, neither Fletcher Building nor any of its related companies,
directors, employees, shareholders nor any other person gives any representations or warranties (either express or implied) as to the accuracy or completeness of the
information and, to the maximum extent permitted by law, no such person shall have any liability whatsoever to any person forany loss (including, without limitation, arising
from any fault or negligence) arising from this presentation or any information supplied in connection with it, or any reliance thereon.
This presentation may contain forward looking statements, that is statements related to future events or other matters. Forward looking statements may include statements
regarding intent, belief or current expectations in connection with future operating or financial performance, or market conditions. Such forward looking statements are based
on current expectations, estimates and assumptions and are subject to a number of risks and uncertainties, including materialadverse events, significant one-off expenses and
other unforeseeable circumstances. There is no assurance that results contemplated in any of these forward looking statementswill be realised. Actual results may differ
materially from those projected. Except as required by law, or the rules of any relevant stock exchange, no person is under any obligation to correct this presentation at any
time after its release or to provide further information about Fletcher Building.
The information in this presentation does not constitute financial product, legal, financial, investment, tax or any other advice or any recommendation.
| FY25 Results Presentation | 20 August 2025 | Fletcher Building Limited2
Agenda
Andrew Reding, Managing Director & CEOFY25 at a glance1.
Andrew Reding, Managing Director & CEOOperating performance2.
Will Wright, CFOFinancial results3.
Andrew Reding, Managing Director & CEOOur stakeholders4.
Andrew Reding, Managing Director & CEOOutlook5.
Andrew Reding, Managing Director & CEOConclusion6.
FY25 Results
| FY25 Results Presentation | 20 August 2025 | Fletcher Building Limited3
FY25 at a glance
Andrew Reding,
Managing Director & CEO
EBIT
1,2
$384m
$125m lower than FY24
Netdebt
$999m
vs $1,766m at 30 June 24
ROIC
4.5%
vs 5.5% at FY24
Capex &
Investments
$313m
vs $420m FY24
FY25 Financial summary
1. Continuing operations 2. Before Significant Items
Tough macro conditions across all sectors; we are positioning the business for the realities of the current market
and to maximiseleverage to any cyclical upturn
| FY25 Results Presentation | 20 August 2025 | Fletcher Building Limited5
Revenue
1
$7.0b
9% lower than FY24
Net cash from
operating activities
$501m
vs $588m in FY24
EBIT Margin
1,2
5.5%
vs 6.6% in FY24
Net loss
$419m
vs $227m in FY24
Our medium-termstrategy
At our Investor Day in June we presented a clear plan for improvement
| FY25 Results Presentation | 20 August 2025 | Fletcher Building Limited6
Supportive macro-economictrends
Medium term focus on manufacturing and
distribution of building products and materials
Urgent action
Focus on high
performance
Empower our
leaders
Resilient capital
structure
•Clear plan withimmediate
priorities already
implemented and next
stages identified
•Urgency and speed will be
maintained throughout
•Business units and the
Group will measure return
against industry-specific
WACC targets
•Underperforming business
units evaluated
•Fletcher Building’s
business units are led by
talented people, but more
autonomy and recognition
of BU-specific needs is
required
•Develop and integrate
performance-driven
culture across business
units
•Dividend paused until net
debt target of $400m -
$900m (pre IFRS-16)
achieved
•Target investment grade
credit metrics
1
2
3
4
Turnaround plan
Australia, Steel & Corporate
restructure
Clever Core shut down
MADE by Laminex shut down
CSP divestment underway
SAP rollout stopped
Forward capex commitments
reduced
Finalise and implement divisional
restructure
Australia, Steel & Corporate
restructure
Clever Core shut down
MADE by Laminex shut down
CSP divestment underway
SAP rollout stopped
Forward capex commitments
reduced
Finalise and implement divisional
restructure
Construction divestment
processes underway
Commencing strategic review of
Residential and Development
Sale of 13.4% equity stake in P2W
toll road in negotiation
Felix Street sale progressing
Focus on achieving fair value for
divested assets
Further decentralise corporate
functions and drive lower costs
Capital allocation and structure
reset underway
Construction divestment
processes underway
Commencing strategic review of
Residential and Development
Sale of 13.4% equity stake in P2W
toll road in negotiation
Felix Street sale progressing
Focus on achieving fair value for
divested assets
Further decentralise corporate
functions and drive lower costs
Capital allocation and structure
reset underway
Fully implement new operational
model
Execute on portfolio simplification
opportunities
As portfolio simplifies,
continuously improve central costs
As balance sheet targets are met,
reset dividend policy and return to
dividend-paying status
Fully implement new operational
model
Execute on portfolio simplification
opportunities
As portfolio simplifies,
continuously improve central costs
As balance sheet targets are met,
reset dividend policy and return to
dividend-paying status
| FY25 Results Presentation | 20 August 2025 | Fletcher Building Limited7
Urgent prioritieshave been actioned decisively and there is a clear path of continuous improvement ahead
ImplementedShort termMedium term
FY25 operational highlights
Firthincreased ready mix market share to ~40% nationally and above 50% in
Auckland, ahead of the new 882 Great South Road batching plant
commissioning in early FY26
Golden Bay market share improved to over 60% nationally and
commissioned a front end firing system that enables a significant increase in
coal substitution
Winstone Aggregates commenced on-site concrete recycling at Auckland
Urban Quarry sites and established a quarry JV in Hawke’s Bay
Winstone Wallboard’s Taurikoplant consistently achieving A-grade recovery
yields exceeding target of 95%
Fletcher Insulation launched 16 new insulation products and implemented
new procedures at its Dandenong plant, achieving its highest ever monthly
production in May 2025
WaipapaPine now operating at full utilisationand despite tough market
conditions demonstrating the benefit of vertical integration with
PlaceMakers
$200m of gross cost savings and ~$15m of structural cost savings achieved
across FY25 plus another ~$30m in structural cost out in FY26 announced at
Investor Day
| FY25 Results Presentation | 20 August 2025 | Fletcher Building Limited8
Encouraging progress on legacy risks
Over the course of FY25 there has been a sustained effort to close out historic legacy issues
| FY25 Results Presentation | 20 August 2025 | Fletcher Building Limited9
[Photo]
•Construction works effectively complete, with acceptance
testing and compliance processes underway
•Client handover expected in calendar year 2025
NZICC
•As at 30 June, participating builders have completed 996
ceiling pipe replacements, fully remediated 55 homes and
installed leak detector units in over 2,000 homes (work
done under both the Interim Fund and Industry Response)
•Costs currently tracking consistent with estimates –no
provision change
WA pipes
[Photo]
•Full works completion approved in May 2024 following June
2023 opening
•Settled outstanding claims with NZTA (June 2025) and
insurers (August 2025)
Puhoi to
Warkworth
Operating
performance
Andrew Reding,
Managing Director & CEO
New Zealand International Convention Centre
Divisional performance
Lower revenue and profitability across the portfolio, with improved EBIT performance from Construction
| FY25 Results Presentation | 20 August 2025 | Fletcher Building Limited11
Construction
Residential &
DevelopmentAustraliaDistributionConcreteBuilding Products
$1,511m
6%from $1,614m
$557m
30% from $796m
$1,794m
9%from $1,979m
$1,528m
5%from $1,615m
$1,048m
3%from $1082m
$1,289m
4% from $1,345m
Gross revenue
1
$52m
86%from $28m
$58m
42% from $100m
$86m
32%from $126m
$19m
61%from $49m
$96m
26%from$130m
$113m
21% from$143m
EBIT (ex Sig Items)
1
3.4%
170 bps from 1.7%
10.4%
220 bps from 12.6%
4.8%
150 bps from 6.3%
1.2%
180 bps from 3.0%
9.2%
280 bps from 12.0%
8.8%
190bps from 10.7%
EBIT margin (%)
$303m
16% from $261m
$858m
flatfrom $854m
$1,188m
16% from $1,409m
$628m
6%from $667m
$1,004m
flatfrom $1,001m
$1,707m
2%from $1,670m
Invested Capital
11.0%
570bps from 5.3%
4.5%
270 bps from 7.2%
4.5%
160 bps from 6.1%
2.0%
340 bps from 5.4%
6.7%
290 bps from 9.6%
4.7%
180 bps from 6.5%
ROIC (ex Sig Items)
1. Excludes corporate costs and Group eliminations
Building Products
Gross Revenue and EBIT
1
down 4% and 21% respectively compared to FY24
| FY25 Results Presentation | 20 August 2025 | Fletcher Building Limited
12
Note: Winstone Wallboards –Domestic board volumes (000 m
2
), Laminex NZ –Domestic laminate sales (m3),
Comfortech–Glasswoolsales volume (tonnes), IplexNZ –Plastic pipe volumes (tonnes), Reinforcing –Reinforcing volumes (tonnes),
Easysteel& Dimond –Easysteel& Dimond volumes (tonnes), Pacific Coilcoaters–PCC local volumes (tonnes)
1. Before Significant Items
•
Performance impacted by cost
inflation and soft market conditions
•
Key business units, WWB and Laminex
NZ, exited FY25 with operational
momentum and performed strongly
in subdued market
•
Volumes across business units lower
than FY24, but rate of decline has
reduced
PRODUCT VOLUMES
Rolling 12m average quarterly volumes, Q4 FY19 = 100
50
60
70
80
90
100
110
120
130
140
Q4 FY19Q1 FY20Q2 FY20Q3 FY20Q4 FY20Q1 FY21Q2 FY21Q3 FY21Q4 FY21Q1 FY22Q2 FY22Q3 FY22Q4 FY22Q1 FY23Q2 FY23Q3 FY23Q4 FY23Q1 FY24Q2 FY24Q3 FY24Q4 FY24Q1 FY25Q2 FY25Q3 FY25Q4 FY25
Winstone WallboardsLaminex NZ
ComfortechIplex NZ
ReinforcingEasysteel & Dimond
Pacific Coilcoaters
FY25 Highlights
Concrete
Relatively strong performance by Golden Bay and Firth in a lower volume environment
| FY25 Results Presentation | 20 August 2025 | Fletcher Building Limited
13
•
A resilient performance, with EBIT
1
of $96m, including MVAC breakdown
impact
•
Compared to FY24, volumes were
down ~4% across the division, with
Firth Masonry and Humes the most
impacted, while Golden Bay and
Firth Ready Mix both achieved
market share gains
•
Earnings supported by strong
demand from the Auckland Airport,
improved cement sales and
continued cost discipline
PRODUCT VOLUMES
Rolling 12m average quarterly volumes, Q4 FY19 = 100
FY25 Highlights
Note: Winstone Aggregates –Aggregates sales volumes (000 tonnes), Golden Bay –Domestic cement volumes (000 tonnes),
Firth –Ready mix volumes (000 m3), Firth –Masonry volumes (000 m2), Humes –Concrete pipe volumes (000 tonnes)
1. Before Significant Items
50
60
70
80
90
100
110
120
130
140
Q4 FY19Q1 FY20Q2 FY20Q3 FY20Q4 FY20Q1 FY21Q2 FY21Q3 FY21Q4 FY21Q1 FY22Q2 FY22Q3 FY22Q4 FY22Q1 FY23Q2 FY23Q3 FY23Q4 FY23Q1 FY24Q2 FY24Q3 FY24Q4 FY24Q1 FY25Q2 FY25Q3 FY25Q4 FY25
Winstone AggregatesGolden BayFirth (Ready Mix)Firth (Masonry)Humes
Distribution
Disappointing EBIT
1
result, down 61% on FY24, but turnaround plan is underway
| FY25 Results Presentation | 20 August 2025 | Fletcher Building Limited
14
•
PlaceMakersand Mico maintained
customer engagement and network
scale
•
However, a general market decline
and historic loss in share impacted
volumes and intense competition
has compressed margins
•
Strategic cost out and operating
model underway by year-end,
positioning the business for FY26
•
Frame and Truss volumes have
displayed positive momentum in
2H25 and ended FY25 ~5% up on
FY24 volumes
PRODUCT VOLUMES
Rolling 12m average quarterly volumes, Q4 FY19 = 100
50
60
70
80
90
100
110
120
130
140
Q4 FY19Q1 FY20Q2 FY20Q3 FY20Q4 FY20Q1 FY21Q2 FY21Q3 FY21Q4 FY21Q1 FY22Q2 FY22Q3 FY22Q4 FY22Q1 FY23Q2 FY23Q3 FY23Q4 FY23Q1 FY24Q2 FY24Q3 FY24Q4 FY24Q1 FY25Q2 FY25Q3 FY25Q4 FY25
PlaceMakers
FY25 Highlights
Note: PlaceMakers–Frame & Truss sales (m3)
1. Before Significant Items
Australia
Gross Revenue and EBIT
1
down 9% and 32% respectively compared to FY24
| FY25 Results Presentation | 20 August 2025 | Fletcher Building Limited
15
•
Mixed performance in FY25
•
Some business units, such as
Laminex AU, Fletcher Insulation and
IplexAU, demonstrated resilience
and product-led growth
•
However, volume declines (-9%),
and cost inflation impacted the
wider division
PRODUCT VOLUMES
Rolling 12m average quarterly volumes, Q4 FY19 = 100
50
60
70
80
90
100
110
120
130
140
Q4 FY19Q1 FY20Q2 FY20Q3 FY20Q4 FY20Q1 FY21Q2 FY21Q3 FY21Q4 FY21Q1 FY22Q2 FY22Q3 FY22Q4 FY22Q1 FY23Q2 FY23Q3 FY23Q4 FY23Q1 FY24Q2 FY24Q3 FY24Q4 FY24Q1 FY25Q2 FY25Q3 FY25Q4 FY25
Laminex AUFletcher InsulationIplex AUStramit
FY25 Highlights
Note: Laminex AU –Total domestic sales volume (000 m2), Fletcher Insulation –Glasswoolsales volume (tonnes),
IplexAU –Plastic pipe and other sales volume (tonnes), Stramit–Sales volumes (tonnes)
1. Before Significant Items
Residential and Development
Volumes lower than FY24, but within historical ranges. Margins preserved through cost control amid market pricing
pressures
| FY25 Results Presentation | 20 August 2025 | Fletcher Building Limited
16
•
Despite demand headwinds and
Clever Core (loss of $9m), Residential
and Development delivered EBIT
1
of
$58m
•
A total of 666 residential units
(including 41 Apartment units) taken
to profit in FY25 compared to 886 in
FY24 (-220 units)
•
Fletcher Living gross margin was flat
between FY24 and FY25 (23.3% and
23.4% respectively). This compares
to 27.8% average from FY19-FY24
VOLUMES –HOUSE SETTLEMENTS
12mth volumes
666
836
670
617
886
666
0
100
200
300
400
500
600
700
800
900
1000
FY20FY21FY22FY23FY24FY25
FY25 Highlights
Note: Residential –Residential + Apartment units settled (Taken to Profit)
1. Before Significant Items
Construction
Improved profitability as business exited from cyclone impacts and legacy projects
| FY25 Results Presentation | 20 August 2025 | Fletcher Building Limited
17
•
Improved FY25 result, with EBIT
1
up
86% on FY24
•
Brian Perry Civilpoured over
300,000m³ of concrete at Auckland
Airport, completed strengthening of
Seaview Wharf (a key national fuel
asset)
•
Major Projects team is on track to
deliver the RāHihi flyover (part of
Eastern Busway) 5 months early
•
Following a number of large projects
(e.g. P2W) during 2021-2022 Higgins
asphalt volumes have returned to
underlying levels
PRODUCT VOLUMES
12mth rolling volumes (rebased to 100)
FY25 Highlights
Note: Higgins –NZ Asphalt volumes (tonnes)
1. Before Significant Items
40
60
80
100
120
140
160
180
Jun-20
Aug-20
Oct-20
Dec-20
Feb-21
Apr-21
Jun-21
Aug-21
Oct-21
Dec-21
Feb-22
Apr-22
Jun-22
Aug-22
Oct-22
Dec-22
Feb-23
Apr-23
Jun-23
Aug-23
Oct-23
Dec-23
Feb-24
Apr-24
Jun-24
Aug-24
Oct-24
Dec-24
Feb-25
Apr-25
Jun-25
Higgins (12 mth rolling asphalt volume)
Divisional changes -recap
| FY25 Results Presentation | 20 August 2025 | Fletcher Building Limited18
We have simplified our portfolio to five Divisions, but FY25 reporting is based on our prior structure
Building Products
Australia
Concrete
Distribution
Residential &
Development
Construction
Light Building
Products
Heavy Building
Materials
Distribution
Residential &
Development
Construction
FY25 reporting structureFY26 onwards reporting structure
Construction Materials
Steel
WaterInsulationWood & Panels
Financial results
Will Wright, CFO
RāHihi flyover –Eastern Busway Project
FY25 reporting updates
We continue to enhance our reporting to provide greater transparency of performance to shareholders
| FY25 Results Presentation | 20 August 2025 | Fletcher Building Limited20
•Segment reporting, with additional detail provided across key financial statements:
– Financial performance -breakdown from revenue to reported EBIT, including gross margin
– Financial position -breakdown of key line items and Funds position
– Cash flows -breakdown of free cash flow by segment
– Details can be found in note 2.2 to the Consolidated Financial Statements
Segment reporting
•Presentation of Statement of Cash Flows has been aligned to the upcoming amendments to the NZ IAS 7 standard in
preparation for the adoption of NZ IFRS 18 standard, providing additional detail on operating, investing and financing
activities
– In additional to statement layout changes, interest paid is now presented within financing activities, interest
receivedis presented within investing activities, and dividends received is presented within investing activities
– Previously, interest paid was presented net of interest received within operating activities and in investing
activities when capitalised to the balance sheet. Dividends received were presented within operating activities
Cash flows
| FY25 Results Presentation | 20 August 2025 | Fletcher Building Limited21
Income Statement
JUN 2024
12 MONTHS
JUN 2025
12 MONTHS
INCOME STATEMENT
NZ$m
7,683
6,994
Revenue
(5,523)
(5,044)
Cost of goods sold
2,160
1,950
Gross margin
(608)
(588)
Warehouse and distribution expenses
(1,063)
(995)
Selling, general and administration expenses
10
10
Share of profits of associates and joint ventures
2
6
Revaluation gain on investment property
8
1
Other
509384
EBIT before Significant Items
(333)(644)
Significant Items
176
(260)
EBIT
(58)
(70)
Lease interest expense
(142)
(102)
Funding costs
(55)
67
Taxation benefit/(expense)
(7)
(2)
(Profits)/losses attributable to non-controlling interests
(86)
(367)
Net (losses)/earnings from continuing operations
(141)
(52)
Net (losses)/earnings from discontinued operations
(227)
(419)
Net (losses)/earnings attributable to the shareholders
(27.7)
(41.4)
Basic losses per share (cents)
(10.5)
(36.2)
Basic losses per share from continuing operations (cents)
•Group Revenue down ~9% and Residential and Development
revenue down ~30%
•Gross margin percentage held at ~28% YoY primarily due to
COGS cost out initiatives
•EBIT before Sig Items includes:
•benefit of $200m gross cost out initiatives, including WHD
and SG&A overheads reduced by net $88m; and
•Negative impact of loss on P2W settlement $16.4m, Clever
Core loss $9m, MVAC breakdown costs $6m
•$644m of Significant items for continuing operations, total of
$702m including discontinued operations
•Funding costs reflect lower rates and lower debt, with
repayment ($679m) from capital raise
•Net loss from discontinued operation mainly from Tradelink
FCTR reclassification ($53m) when business was sold
Volume declines & lower house sales, partly offset by cost-out & significantly improved Construction performance
| FY25 Results Presentation | 20 August 2025 | Fletcher Building Limited22
FY24 to FY25 EBIT bridge
Cost initiatives have helped to offset some of the impact lower volumes and cost inflation
EBIT bridge FY24 to FY25: Key drivers of YoY change
$m
1. Cost inflation can be broken down into COGS ($72m), Warehouse & Distribution expenses ($28m) and Selling, General and Administrative expenses ($35m)
509
(132)
(33)
(50)
(135)
200
(5)
30
(16)
16
384
FY24A Market Volume
-M&D
Price & Mix
-M&D
Resi -Lower Unit
Sales and Price
Cost inflation¹ Cost Initiatives Land Dev Construction
Improved Margin
P2W NZTA
Settlement
OtherFY25A
IncreaseDecreaseTotal
| FY25 Results Presentation | 20 August 2025 | Fletcher Building Limited23
Balance Sheet
JUN 2024
12 MONTHS
JUN 2025
12 MONTHS
BALANCE SHEET
NZ$m
1,870 1,905Inventory
914849Debtors
(1,276)(1,202)Creditors
(223)(345)Other working capital
2,307 2,349Property, plant and equipment and investment property
876 656Indefinite life intangible assets
15847Other Intangible assets
221 218Investments
152 150Retirement plan assets
1,191 1,246Right-of-use lease asset
(69)(63)Deferred tax liability -brands
5 (8)Derivatives for foreign currency hedging
2829Current tax balances
298-Adjustment for assets held for sale
6,452 5,831Invested Capital
(1,579)(1,497)Right-of-use lease liability
4,8734,334Funds
221 272Deferred tax balances (excl. deferred tax on brands)
(2,108)(1,172)Carrying value of borrowings
3134Value of hedge derivatives
311139Cash and cash equivalents
3,328 3,607Funds / Group Equity
•Normalisingthe working capital cycle has resulted in
slightly higher working capital days in Materials and
Distribution divisions (+2.4 days) and lower payable
days as at30 June
•Movement in Inventory driven by higher stock and
lower 2H unit sales in Residential and Development
•Other working capital changes primarily relate to
increased provisions for the WA Industry Response
($170m), offset by an unwind of legacy construction
project positions ($78m)
•Impaired 50% interest in Construction Fiji business
($17.3m)
•Divested Tradelink, 50% of Construction Fiji and NZCDS
businesses during the year
•Proceeds from capital raise used to repay $679m of
debt. Net debt at30 June 2025 was $999m vs $1,766m
at30 June 2024
Balance Sheet improved with capital raise, with focus now on achieving $400m -$900m net debt target
| FY25 Results Presentation | 20 August 2025 | Fletcher Building Limited24
1. Before Significant Items
Cash flows
JUN 2024
12 MONTHS
JUN 2025
12 MONTHS
CASH FLOWS
NZ$M
Cash flow from operating activities
8,6507,311Receipts from customers
1727Receipts from residents (new ORAs and resold ORAs)
(8,064)(6,837)Payments to suppliers, employees and other
(15)-Income tax paid
588501Net cash from operating activities
Cash flow from investing activities
174Sale of subsidiaries
(11)(1)Acquisition of subsidiaries
(4)Investment in joint ventures and associates
1522Dividends & interest received
756Sale of property plant and equipment
(372)(280)Purchase of property plant and equipment
(17)(16)Investment in mining, consenting and stripping
(20)(12)Payments for investment property and development or investment property
(398)(61)Net cash from investing activities
Cash flow from financing activities
(152)(119)Funding costs (paid & capitalised)
(272)(261)Lease principal & interest paid
(2)37Net non-controlling contributions/(distributions)
-679Net issue / repurchase of shares
306(948)Net draw / (repay) borrowings & capital notes
(124)-Dividends paid to shareholders
(244)(612)Net cash from financing activities
(54)(172)Net movement in cash held
•Net cash from operating activities impacted by lower EBIT
1
compared to FY24 ($125m) and:
•$116m legacy construction outflows vs $376m in FY24
•$38m Significant Items cash outflows vs $49m in FY24
•Net divestment proceeds from Tradelink ($159m), 50%
Construction Fiji operations ($13m), and NZCDS ($2m)
•Capex PP&E investment includes $110m Laminex NZ OSB
plant, $18m PlaceMakersF&T plant, $28m new Firth
Auckland batching plant, $8m Fletcher Insulation acoustic
panels plant, and investment in Golden Bay front end firing
system
•Proceeds from capital raise in 1H of $679m used to repay
debt
•Minority contributions principally relate to Residential and
Development division development partner contributions
Operating cash flows suppressed by lower earnings due to the challenging market conditions
| FY25 Results Presentation | 20 August 2025 | Fletcher Building Limited25
1.Note Divisional Central Costs includes both Group recharges and direct costs incurred at a divisional level
Central costs
•Significant impact on Group central costs as a result of
stopping the Digital@FletcherSAP ERP program
•Group technology costs increased principally due to licence
costs,this is expected to reduce by ~$20m YoY with
restructure and decentralisationinitiatives
•Corporate overhead costs include Executive remuneration and
director fees, D&O insurance, company secretarial and listing
fee; and other Group support services
•Further cost out expected post divestment to ensure
corporate functions are “right sized”
•Other income primarily relates to ETS sales and net interest
income on defined benefit pension plan
Reduction in Group central costs following stopping of ERP rollout, the benefit of late FY25 restructure still to be
fully reflected and further cost out opportunities identified for execution in FY26
JUN 2024
12 MONTHS
JUN 2025
12 MONTHS
CENTRAL COST SUMMARY
NZ$m
Group
96104Technology
4542Corporate overhead costs
1213Property & Penrose campus
2019Other Group central costs (legal, payroll and other)
181Digital@Fletcherproject costs
(10)(8)Other income
182171Group central costs (pre-recharge)
(115)(127)Group recharges
6744Net Group corporate costs
Division
1
6861Divisional central costs (pre-recharge)
(32)(36)Division recharges
3625Net Divisional corporate costs
Working capital performance
Close management of working capital will be a key part of the overall financial strategy
| FY25 Results Presentation | 20 August 2025 | Fletcher Building Limited26
•Over the past two years, trading cash flows and
working capital have been extremely volatile, for
example between May and June 2024 net working
capital reduced by ~$380m
•This volatility has requiredthe Group to maintain
significant financing headroom
•Reducing working capital and trading cash flow
volatility is a key initiative
•FY25 saw small improvements compared to FY24
largely with better payables discipline at year-end;
however more work needs to be done
•Changes to the portfolio, such as a potential sale
of some or all of the Construction division, could
have material impact on working capital volatility
1. Average monthly change in trading cash for the period from FY19-FY24 accumulated over 12 months, Trading Cash is defined as
net cash from operating activities, excluding: income tax paid and including lease principal and interest paid
CUMULATIVE MONTHLY ∆TRADING CASH
1
(FY19 –FY24); $m
-700
-600
-500
-400
-300
-200
-100
0
100
Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun
Cumulative average monthly ∆ (Group FY19-24)Cumulative monthly ∆ (Group FY25)Cumulative monthly ∆ (Group FY24)
Capital allocation
We have a number of committed capital projects underway that will continue into FY26
| FY25 Results Presentation | 20 August 2025 | Fletcher Building Limited27
•Investments & acquisitions include contributions into
Construction JVs and final purchase price adjustments on
WaipapaPine
•Stripping (removing overburden to uncover aggregate
resource) costs of ~$16m in Winstone Aggregates and
Golden Bay. These are capitalised into stock and
amortised as the resource is sold
•Key FY25 & FY26 projects include:
•Laminex Taupo OSB finishing line projected to go live
April 2026, initial board production expected in May-
July 2026
•Frame & Truss Cavendish Driveexpectedto go live in
April/May 2026
•New Firth Auckland batching plant at 882 Great South
Road expected go-live inSept/Oct 25
•Currently working closely with business units on scaling
and phasing of capex, at this early stage expect FY26
capex to be ~$320m –~$340m, including ~$130m on
Taupo OSB. Also expect to spend an incremental ~$30m
on quarry stripping and land acquisitions and ~$13m on
the construction of retirement village units
FY25 CAPEX, INVESTMENTS & ACQUISITIONSBREAKDOWN
$m
0
50
100
150
200
250
300
350
SIB Capex
$106m
Taupo OSB
$110m
Other
Growth Capex
$64m
Stripping $16m
Vivid
$12m
Investments &
acquisitions
$5m
Capital projects
| FY25 Results Presentation | 20 August 2025 | Fletcher Building Limited28
Significant investmentsbeing made in long life manufacturing assets
Laminex Taupo OSB plant
Golden Bay Cement
front end firing unit
Firth 882 Great
South Road
batching plant
PlaceMakers
Auckland
Frame & Truss
Management of lease portfolio
Excluding the impact of the Tradelink divestment, lease liabilities increased between FY24 & FY25
| FY25 Results Presentation | 20 August 2025 | Fletcher Building Limited
29
•Continuing focus from management on lease portfolio and reduction in overall
liability
•Lease liabilities totalled ~$1.5bn and represented ~57% of Group gross debt
•Land and Buildings accounted for the majority of the leases (~82%) with
Plant & Machinery responsible for the remainder (~18%)
•The increase in continuing operations lease liabilities primarily related to two
transactions:
•Sale and lease back of Steel division land & buildings at Hunua; and
•Laminex AU entering into a new warehouse lease agreement
•ROIC calculation includes ROU assets to ensure lease impact is included in
performance hurdles
Weighted average lease term
As at 30 June 2025, $M
As at
30 JUN 2024
As at
30 JUN 2025
Lease Liabilities
NZ$m
(357)(413)
Building Products
(362)(373)
Distribution
(165)(179)
Concrete
(283)(319)
Australia
(1,167)(1,284)
Materials & Distribution
(13)(11)
Residential and Development
(123)(126)
Construction
(137)(76)
Corporate & Other
(1,440)(1,497)
Continuing operations
(139)
Discontinued operations
(1,579)(1,497)
Group
177
439
348
379
154
0
100
200
300
400
500
<5 years 5-10 years 10-15 years 15-20 years 20+ years
Lease Liabilities ($m)
55
90
40
33
146
142
325
948
270
5
FY26FY27FY28FY29+
Capital NotesUSPPBank LoansOther
Funding mix
The Group has strong liquidity of $1.1bn
| FY25 Results Presentation | 20 August 2025 | Fletcher Building Limited30
TOTAL FACILITIESMATURITY PROFILE
As at 30 JUNE 2025, $m
60
561
988
445
•Undrawn credit lines of $916m and cash on hand of
$139m as at30 June 25; total liquidity of $1.1b
•~$679m net cash proceeds from equity raise used to repay
bank debt of $511m and USPP of $169m
•Average maturity of debt 2.2 years; average interest rate
on debt is 5.6%excluding line fees and 6.7% including line
fees
•Group gearing after hedging 22% at30 June 25 (35% at
Jun 24)
•Moody’s rating of Baa3/stable affirmed on 25 July 25
•$80m capital notes redeemed in March 2025
| FY25 Results Presentation | 20 August 2025 | Fletcher Building Limited31
Net Debt
Capital raise drove the majority debt reduction, with a further ~$88m resulting from other levers
NET DEBT (FY24 –FY25)
$m
1,766
(679)
154
(655)
313
(230)
261
128
(59)
999
FY24 Net DebtCapital Raise
Sig Items &
Legacy Cash
Operating Cash
(excl Legacy & Sig)
Net Capex,
Investments
& Acquisitions
Proceeds from
Divestments
Leases
Interest &
Hedging Costs
Dividends, Minority
Contribution and
Other Income
FY25 Net Debt
IncreaseDecreaseTotal
| FY25 Results Presentation | 20 August 2025 | Fletcher Building Limited32
FY25 Significant Items
•At the HY25 results, $251m of Significant Items primarily relating to IplexAustralia pipes
($177m) and Tradelink disposal ($58m, non-cash FCTR) were announced
•~$15m on the increased cost to complete NZICC was announced in June
•The Group incurred $424m of Significant Items as a result ofoperating model changes
and strategic review decisions, including:
•Business closures (Clever Core, South Pacific, Laminex Made), operating site closures (
WWB DC’s, F&T Felix St, Laminex Monkland, R&D North Branch);
•Write-offs of capital assets associated with projects no longer being pursued (Project
Centurion and D@F); and
•Impaired Goodwill/Brands balances in IplexNZ ($68m), Oliveri ($49m), Stramit($47m),
Humes ($30m), Mico ($14m), and derecognisedD@F software asset ($95m) and
impairment of investment in Construction Fiji JV ($17m)
•$12m of Significant Items were also incurred in 2H25 relating to legal costs in relation to
defending legacy matters
Total Significant Items of $702m in FY25, primarily a result of IplexAU, Tradelink and strategic review actions
FY25 Significant Items ($m)
251HY25 reported
15
NZICC cost to complete
(announced June)
380Strategic review non-cash items
44Strategic review cash items
12Additional non-strategic review items
702Total
Our stakeholders
Andrew Reding,
Managing Director & CEO
Our Safety
We believe all injuries are preventable
| FY25 Results Presentation | 20 August 2025 | Fletcher Building Limited34
We continue to work towards our promise
•Winner of Australia Institute of Health & Safety (AIHS) Safety Leader of the
Year Award.
•SafeGuardAward Finalists in 5 categories: Leadership, Governance, Health,
Engagement and Collaboration.
•19 Business units achieved ISO 45001 Certification vs 7 in FY24
•Leaders completed over 19,000 CCVs and 25,000 leader walks, actively
checking on both critical risk and culture performance across businesses
•Business units started expanding their safety focus to 2.0 Healthy Work,
building on successful 1.0 Felt Leadership Safety Leadership and Power Up
Programs. Healthy Workhelps leaders and teams grow skills in personal
health, healthy work (psychosocial risk), HOP principles and learning teams
•Business units piloted a number ofAI technologies to help improve our
dynamic exclusion zones around mobile plant. PlaceMakersand EasySteel
achieved 74% and 89% reduction in exclusion breaches respectively
SafeGuard
Award
Finalists in 5
categories
TRIFR
12% lower
in FY25 (2.9)
vs FY24 (3.3)
AI imaging technology
AI imaging technology
We express our deepest sympathies to the family of Max, our team member
who passed away followinga crane incidentin Vanuatu at the start ofFY26
This event and the 15 high potential events we have each month reinforce that
we can never be too comfortable and there is always work to do to deliver on our
promise that everyone will go home safe, every day
Quarrying NZ awards for
excellence in plant
operation and problem
solving (Anya Harding),
Tomorrow’s Leader
(Morgan Ringrose),
Environment and
Community (Ian Wallace -
Winstone Aggregates)
Our People
Our people are the key to our success and we are immensely proud of the work they do
| FY25 Results Presentation | 20 August 2025 | Fletcher Building Limited35
45 grants
from the Employee Welfare
Fund to employees or their
dependents for hardship,
disability and death
Golden Bay, Winstone
Aggregates and
Construction Division
sponsored and
supported Girls in
High Vis, Girls in
Infrastructure and
Women in
Construction events
TeHeta Daniels,
graduate of Fletcher
Building’s
Whakatupu
programme. The first
person in Northland
to earn a BCITO NZ
certificate in
Concrete Production
Sonder app launched
across NZ businesses,
increasing support to 24/7
medical, safety and mental
health needs. Since launch
the number of employees
accessing support has
doubled
Our Environment
| FY25 Results Presentation | 20 August 2025 | Fletcher Building Limited36
Supporting our local environment and improving the sustainability of our operations
Leadership
A-
Supplier
Engagement
A-
ESG Rating
AAA
ESG Rating
71
ESG Rating
B
ESG Rating
4.5
Carbon emissions
24%
lower
vs FY18 baseline
79%
of Revenue from
Sustainably
Certified Products
87%
of Waste diverted
from landfill
Winstone Wallboards has
partnered with Hastings District,
Napier City councils, Central
Environmental, and major local
building supply merchants to trial
a recycling system, where
plasterboard offcuts are
collected, processed, and turned
back into new product
As part of their Positive
Biodiversity strategy, Winstone
Aggregates worked with
NaturelandWildlife Trust to breed
and release yellow crowned
kakariki chicks at Mount Bruce, a
900-hectare restored forest home
of endangered wildlife
Golden Bay achieved an exit
run rate of ~65% coal
substitution in FY25 following
completion of thefront
endfiring capability that
allows the use of more waste
products such as plastics
Our Australia businesses
generated 975 MWh of solar
electricity across three sites,
equivalent to 684 t CO2e of
avoided emissions
Our Community
| FY25 Results Presentation | 20 August 2025 | Fletcher Building Limited37
Supporting the communities that we operate in
The Heavy Building Materials and Distribution
Divisions made a meaningful impact on New
Zealand’s backcountry by supporting the
restoration of 30 iconic huts across the country
in FY25 as part of their 5 yearpartnership with
Back Country Trust.
Fletcher Living
designed, built and
handed over Taurangi
Reserve to Auckland
Council as part of the
Three Kings
development. The new
recreation area
includes two new
sportsfields, a nature-
inspired playground,
and public walkways.
The name honoursthe
site’s cultural heritage.
PlaceMakers, Dimond,
Winstone Wallboards
and Fletcher Living
provided materials,
advice and support to
students at One Tree
Hill College Trade
Academy who turned a
one dollar, ex-1970s
KāingaOra home
destined for landfill
into a HomeStarLevel
7 sustainable
masterpiece
Winstone Aggregates’
Community Sponsorship
Fund supports local
projects that enhance
the environment and
improve communities,
including a variety of
charitable trusts like
Coastguard Kaipara
Our Customers
We’re proud of the products and people helping our customers build their future
| FY25 Results Presentation | 20 August 2025 | Fletcher Building Limited38
Auckland Airport
Firth and Brian Perry Civil recently completed their largest ever
concrete pour at Auckland Airport, 1,300m3 of concrete (76 slabs,
6m x 6m, 500mm thick) was laid in a single 12 hour night shift as
part of the Taxiway Mike project
New Zealand International
Convention Centre (NZICC)
The NZICC project is nearing
completion and currently
undergoing acceptance testing.
Once finished the centre will be
capable of hosting events for up
to 4,500 people. Key features
include a divisible 2,850 seat
theatre, 6,674sqm of
multipurpose hall space and
2,700sqm of meeting space.
WaitangiruaLink Road
(WLR) project
Humes and Iplexsupport joint project
between Wellington Electricity, Wellington
Water, KāingaௗOra and Porirua City Council
WLR essential for securing long-term water
and power infrastructure in Eastern Porirua.
Our Customers
We’re proud of the products and people helping our customers build their future
| FY25 Results Presentation | 20 August 2025 | Fletcher Building Limited39
Christchurch Stadium
This $683m project has
used the full spectrum
of GIB® products
including GIB
Braceline® GIB
Fyreline®, GIB
Toughline® and GIB
Weatherline®
SH1 Loop Road to Smeaton’s Hill
Safety Improvement Project
Firth supply concrete to the loop
road which aims to enhance
safety and efficiency on SH1 near
Whangārei a critical transport
corridor for Northland's forestry
sector and other freight traffic
Western Sydney
International Airport
IplexEziPit1000
maintenance holes were
installed at the new
Western Sydney
International Airport.
The EziPitswere
supplied in modular
form, facilitating easy
handling and on-site
assembly
TeWaka Aorangi Child
Wellness Centre
This centrefor children
who have behavioural,
neurodevelopmental and
mental health needs uses
vertical Meltecapanels and
durable Formica Laminate
for horizontal surfaces that
endure heavy use
Outlook
Andrew Reding,
Managing Director & CEO
RāHihi flyover –Eastern Busway Project
Where in the New Zealand cycle are we?
Sales across the wider building merchant market are tracking below previous years (in nominal terms)
| FY25 Results Presentation | 20 August 2025 | Fletcher Building Limited41
Source: Creditworks
Note: Sales are displayed in nominal terms
NZ BUILDING MERCHANT SALES
$m, monthly rolling 12 month sales (Jun-20 to Jun-25)
NZ BUILDING MERCHANT CURRENT MONTH SALES
$m, Monthly Jan-22to Jun-25
3,000
3,500
4,000
4,500
5,000
5,500
6,000
6,500
Jun-20
Sept-20
Dec-20
Mar-21
Jun-21
Sept-21
Dec-21
Mar-22
Jun-22
Sept-22
Dec-22
Mar-23
Jun-23
Sept-23
Dec-23
Mar-24
Jun-24
Sept-24
Dec-24
Mar-25
Jun-25
200
250
300
350
400
450
500
550
600
650
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
2022202320242025
Where in the Australian cycle are we?
Completions / commencement divergence starting to reverse for total dwellings. New houses slower to turn
| FY25 Results Presentation | 20 August 2025 | Fletcher Building Limited42
Source: ABS
AUS TOTAL DWELLINGS
Seasonally adjusted, (Approvals, Commencements & Completions)
AUS NEW HOUSE
Seasonally adjusted, (Approvals, Commencements & Completions)
30000
35000
40000
45000
50000
55000
60000
65000
Mar-17
Jun-17
Sept-17
Dec-17
Mar-18
Jun-18
Sept-18
Dec-18
Mar-19
Jun-19
Sept-19
Dec-19
Mar-20
Jun-20
Sept-20
Dec-20
Mar-21
Jun-21
Sept-21
Dec-21
Mar-22
Jun-22
Sept-22
Dec-22
Mar-23
Jun-23
Sept-23
Dec-23
Mar-24
Jun-24
Sept-24
Dec-24
Mar-25
Total Dwellings approvedTotal Dwellings commencedTotal Dwellings completed
20000
25000
30000
35000
40000
45000
Mar-17
Jun-17
Sept-17
Dec-17
Mar-18
Jun-18
Sept-18
Dec-18
Mar-19
Jun-19
Sept-19
Dec-19
Mar-20
Jun-20
Sept-20
Dec-20
Mar-21
Jun-21
Sept-21
Dec-21
Mar-22
Jun-22
Sept-22
Dec-22
Mar-23
Jun-23
Sept-23
Dec-23
Mar-24
Jun-24
Sept-24
Dec-24
Mar-25
New House approvedNew House commencedNew House completed
FY26F Outlook
Operating volumes continue to be subdued, impacting operating leverage and profitability
| FY25 Results Presentation | 20 August 2025 | Fletcher Building Limited43
•New Zealand market volumes expected to remain low and experience subdued demand throughout FY26
•Australia market indicators are mixed and it is too early to say whether some indicators will lead to
greater activity and volumes across FY26
•Cost initiatives are continuing and will help to support profitability, but operating leverage will remain
impacted by market conditions
•Constructionsale processand Residential strategicrevieware both underway, but any potential cashflow
and cost-out benefits are unlikely to be seen until FY27
Conclusion
Andrew Reding,
Managing Director & CEO
New Zealand International Convention Centre
Conclusion
| FY25 Results Presentation | 20 August 2025 | Fletcher Building Limited45
Immediate actions being taken on turnaround plan and cost out program
❶
Clear focus on operating performance and servicing our customers
❷
On track with reducing net debt, with clear priorities for FY26
❸
NZ and AUS markets likely to remain weak in FY26
❹
Well positioned for improved operating leverage when market conditions do recover
❺
Appendix
Fletcher Building at a glance
A leading building materials manufacturer and
distributor across New Zealand and Australia
with complementary development &
construction businesses
| FY25 Results Presentation | 20 August 2025 | Fletcher Building Limited47
1. Before Significant Items
•NZX and ASX listed (FBU), with market
cap of ~$3.1b
•FY25 Revenue of $7b and EBIT
1
of $384m
•Operates through a portfolio of 24
business units that employs 12,500+
people across Australia and New Zealand
•Portfolio provides meaningful vertical
integration across key product categories
including construction materials, wood &
panels, water and insulation
•Exposed to structurally attractive
markets, with population growth and
infrastructure deficits driving demand for
housing and infrastructure
Building Products
| FY25 Results Presentation | 20 August 2025 | Fletcher Building Limited48
Change from 12 months ended
30 June 2024 (FY24)
12 months ended
30 June 2025 (FY25)
4% from $1,345m
$1,289mGross revenue
6% from $1,093m
$1,031mExternal revenue
8% from $442m
$407mGross margin
2% from $308m
$301mOverheads
21% from $136m
$107mOperating profit
21% from$143m
$113m
EBIT before Significant
Items
190 bps from 10.7%
8.8%
EBIT margin before
Significant Items
384% from $19m
$92mSignificant Items
2% from $1,670m
$1,707m
Invested Capital
180 bps from 6.5%
4.7%ROIC (excl Sig Items)
25% from $174m
$132mCapex & Investments
•Building Products:Performance was impacted by cost inflation and soft civil
construction conditions. The division exited FY25 with operational momentum
and improved margin performance in key segments like WWB and Laminex NZ.
•Winstone Wallboards: A-grade board yield (95%) and a successful launch of
the Curvelineproduct. EBIT margin held up well with tight pricing controls and
a well-executed plant production ramp-up.
•Laminex NZ: Delivered resilient sales of Meltecaand particleboard, while the
deployment of the Argos AI grading system provided operational efficiency.
Digital engagement grew, streamlining order volumes and service levels.
•Comfortech: While demand for Pink® Batts and PinkFit® remained solid, the
business contended with higher energy costs, import-driven price pressure,
and some manufacturing disruption.
•IplexNZ: Delivered strong sales growth with overall volumes up 10%;
combined with strong operational efficiencies delivering improved operating
margins.
•Steelportfolio: faced significant margin pressure alongside balance sheet
devaluations. Earnings were also heavily impacted by aggressive competitor
pricing, product mix degradation, and persistent cost pressures.
Concrete
| FY25 Results Presentation | 20 August 2025 | Fletcher Building Limited49
Change from 12 months ended
30 June 2024 (FY24)
12 months ended
30 June 2025 (FY25)
3% from $1,082m
$1,048mGross revenue
6% from $782m
$732mExternal revenue
9% from $301m
$273mGross margin
3% from $178m
$172mOverheads
26% from $125m
$93mOperating profit
26% from$130m
$96m
EBIT before Significant
Items
280 bps from 12.0%
9.2%
EBIT margin before
Significant Items
($4m)
$30mSignificant Items
flat from $1,001m
$1,004mInvested Capital
290 bps from 9.6%
6.7%ROIC (exclSig Items)
27% from $99m
$72mCapex & Investments
•Concrete: a resilient performance, although impacted by $6m from the
MVAC breakdown in 1H. Volumes were down ~4%, but earnings were
supported by strong demand from the Auckland Airport expansion,
improved cement sales, and continued cost discipline.
•Margins were maintained through pricing, mix optimisation, and
productivity gains. Firth and Golden Bay Cement were key contributors
to a stronger second-half result, while Winstone Aggregates remained
steady despite disruption.
•Firth: Strong demand across commercial and infrastructure projects lifted
volume throughout the year. New Auckland batching plant cost
expectations tracking inline; short delay to Sept/Oct 25 (from June).
•Golden Bay: EBIT impacted by MVAC outage (-$5.9m) and lower NZ pricing
levels. In the face of persistent energy cost pressures (electricity costs up
$2.6m YoY) and isolated logistics challenges, Golden Bay maintained high
asset reliability and margin control.
•Winstone Aggregates:Delivered a stable but subdued performance in
FY25. While volumes were impacted by weather disruptions and project
delays, the business managed costs tightly and protected margins through
operational improvements and pricing. Contribution to the division
remained steady, with positive signs emerging from infrastructure activity.
Distribution
| FY25 Results Presentation | 20 August 2025 | Fletcher Building Limited50
Change from 12 months ended
30 June 2024 (FY24)
12 months ended
30 June 2025 (FY25)
5% from $1,615m
$1,528mGross revenue
5% from $1,578m
$1,504mExternal revenue
11% from $426m
$381mGross margin
4% from $376m
$361mOverheads
62% from $50m
$19mOperating profit
61% from $49m
$19m
EBIT before Significant
Items
180 bps from 3.0%
1.2%
EBIT margin before
Significant Items
$32m from $0m
$32mSignificant Items
6% from $667m
$628mInvested Capital
340 bps from 5.4%
2.0%ROIC (exclSig Items)
109% from $11m
$23mCapex & Investments
•The Distribution division faced a challenging FY25, delivering a result
significantly below expectations. While PlaceMakersand Mico maintained
customer engagement and network scale. However, a general market decline
and loss in share impacted volumes and intense competition has compressed
margins. Strategic cost out and operating model adjustments were underway
by year-end, positioning the business for FY26.
•PlaceMakersfaced a demand-driven downturn in FY25, with revenue and
EBIT both significantly down YoY. PlaceMakersmost impacted by the
residential construction slowdown in New Zealand. Despite this, the business
maintained strong customer engagement, consistent DIFOT performance, and
launched operational improvement programs focused on footprint efficiency
and cost containment.
•Micofaced a difficult trading environment in FY25, as residential construction
activity softened and commercial pipelines slowed. The business experienced
pressure on revenue and margins for most of the year, particularly in the first
three quarters. However, stabilisationin Q4 and strategy reset has laid the
groundwork for recovery.
Australia
| FY25 Results Presentation | 20 August 2025 | Fletcher Building Limited51
Change from 12 months ended
30 June 2024 (FY24)
12 months ended
30 June 2025 (FY25)
9% from $1,979m
$1,794mGross revenue
8% from $1,925m
$1,773mExternal revenue
11% from $682m
$610mGross margin
5% from $551m
$522mOverheads
33% from $128m
$86mOperating profit
32% from $126m
$86m
EBIT before Significant
Items
150 bps from 6.3%
4.8%
EBIT margin before
Significant Items
from $17m
$296mSignificant Items
16% from $1,409m
$1,188mInvested Capital
160 bps from 6.1%
4.5%ROIC (excl Sig Items)
13% from $53m
$46mCapex & Investments
•Australia: While some businesses such as Laminex AU, Fletcher Insulation and
IplexAU demonstrated resilience and product-led growth, the overall division
was challenged by volume declines (-9%), persistent cost inflation, and weaker
market demand, especially in residential construction.
•Laminex Australia: While the broader Australian market faced headwinds from
slowing residential activity, Laminex Australia achieved significant growth in
premium product categories, most notably with the Next Generation
Woodgrains range, which exceeded sales expectations.
•Fletcher Insulation:Achieved record monthly output during the year, launched
16 new insulation products and implemented world-class manufacturing
practices at its Dandenong plant. EBIT improved on the back of volume
recovery and product expansion.
•IplexAustralia: Was impacted by declining civil project starts, pricing pressure
from imports, and input cost volatility. The business focused on product
innovation and channel diversification, including the successful launch of its
expanded Blackmaxdrainage range.
•Stramitnavigated a tough FY25, with results impacted by the broader
slowdown in residential construction and aggressive price competition in the
steel roofing and sheds market.
Residential and Development
| FY25 Results Presentation | 20 August 2025 | Fletcher Building Limited52
Change from 12 months ended
30 June 2024 (FY24)
12 months ended
30 June 2025 (FY25)
30% from $796m
$557mGross revenue
30% from $739m
$520mExternal revenue
30% from $174m
$122mGross margin
7% from $76m
$71mOverheads
47% from $98m
$52mOperating profit
42% from $100m
$58m
EBIT before Significant
Items
220 bps from 12.6%
10.4%
EBIT margin before
Significant Items
-$10mSignificant Items
flatfrom $854m
$858mInvested Capital
270 bps from 7.2%
4.5%ROIC (exclSig Items)
40% from $20m
$12mCapex & Investments
•FY25 saw the Residential and Development division navigate persistent demand
headwinds, cautious buyer behaviourand pricing pressures, the division delivered
EBIT of $58m. Whilst volume softened from FY24 operational discipline, customer
satisfaction and meaningful community impactremained key highlights.
•A total of666 residential units (including 41 apartment units) taken to profit in
FY25, compared to 886 in FY24 (-220 units).
•Fletcher Living gross margin was flat between FY24 and FY25 (23.3% and 23.4%
respectively). This compares to 27.8% average from FY19-FY24
•Three Kings reached a major transformation milestone, evolving from a quarry to
a thriving community with new housing, sports fields and roading network now
open. Matai Springs, Halswell(Canterbury) completed and sold out in FY25,
delivering ~160 homes over three years with strong profitability and positive
community outcomes. The Hill, Auckland launched with flagship Belvedere
Apartments, achieving record pricing, underscoring market confidence in
premium urban design
•Clever Core, Exit complete; redeployment finalised, with over 50% of staff
retained within Fletcher Building; FY25 EBIT impact: -$9.3m (excl. Sig Items).
Construction
| FY25 Results Presentation | 20 August 2025 | Fletcher Building Limited53
Change from 12 months ended
30 June 2024 (FY24)
12 months ended
30 June 2025 (FY25)
6% from $1,614m
$1,511mGross revenue
8% from $1,566m
$1,433mExternal revenue
13% from$135m
$152mGross margin
8% from $110m
$101mOverheads
93% from $27m
$52mOperating profit
86% from $28m
$52m
EBIT before Significant
Items
170 bps from 1.7%
3.4%
EBIT margin before
Significant Items
$292m
$58mSignificant Items
16% from $261m
$303mInvested Capital
570 bps from 5.3%
11.0%ROIC
(3)
$20m
-
$20mCapex & Investments
•The Construction division delivered an improved FY25 result, with EBIT up 57%
YoY. This performance reflects successful project delivery, improved cost
discipline, and significant progress on key infrastructure programmes. EBIT before
Sig Items includes $16.4m settlement loss on legacy P2W contract, and equity
accounted earnings on NX2 of $4m, offset by equity accounted losses on 50%
construction Fiji business of $4m.
•Higgins, contributed materially to margin growth; secured long-term contracts.
New wins in maintenance contracts in Waikato and Wellington. Delivered up to
130% of NZTA renewal targets on existing NOC contracts. Signed agreement for
bitumen import terminal at Marsden Point (opens 2026). Introduced new
bitumen tankers, achieving 19% fuel savings.
•Brian Perry Civil, poured over 300,000m³ of concrete at Auckland Airport.
Completed strengthening of Seaview Wharf, a key national fuel asset. Delivering
two windfarms (Far North & Southland) alongside Higgins with the largest turbine
foundation using 720m³ of concrete & 92t of steel.
•Major Projects, Eastern Busway, RāHihi flyover on track to open 5 months early –
a major schedule achievement. Riverlink Alliance (Wellington), $750m project
secured. P2W project, all NZTA claims resolved in FY25 and insurance claims
resolved post balance date.
| FY25 Results Presentation | 20 August 2025 | Fletcher Building Limited54
External revenue includes income from the Group’s New Zealand Vertical Buildings Business (2025: $88 million; 2024: $159 million), which the Group is in the process of exiting The New Zealand International Convention Centre (NZICC) represents the largest project in this business. EBIT before
Significant Items, however, excludes any earnings or losses from these projects that are reported separately as Significant Items.
* Overheads reflect warehouse, distribution, selling, general and administrative expenses
1 Other operating income/(expenses) include restructuring and redundancy costs, and costs associated with Golden Bay®’sMVAC ship breakdown. In the prior year, restructuring and redundancy
costs were partially offset by insurance proceeds received for business interruption costs from weather events in 2022 and 2023.
2 Revaluation gains include gains recognisedfrom the annual remeasurement of Vivid Living®’sinvestment properties at each reporting date.
3. Other gains/(losses) include gains/losses from the disposal of assets, net interest income on defined benefit plans, and proceeds from the disposal of NZ ETS units.
Divisional Restatements
EBITDA
before Sig
ItemsEBITDADD&AEBITSig Items
EBIT before
Sig Items
Reval
2
and
other gains
/ (losses)
3
Equity
Accounted
Earnings
Operating
Profit
Otherincome
/ (expenses)
1
Overheads*
Gross
Margin
External
Revenue
Gross
Revenue
NZ$m
Old Group structure (FY25)
182 9069 21 (92)113 6 107 1 (301)407 1,031 1,289
Building Products
79 47 60 (13)(32)19 19 (1)(361)381 1,504 1,528
Distribution
174 144 78 66 (30)96 3 93 (8)(172)273 732 1,048
Concrete
175 (121)89 (210)(296)86 (1)1 86 (2)(522)610 1,773 1,794
Australia
62 52 4 48 (10)58 6 52 1 (71)122 520 557
Residential & Development
97 39 45 (6)(58)5252 1 (101)152 1,433 1,511
Construction
(29)(155)15 (170)(126)(44)8(52)2 (64)10 1 10
Corporate
4 4 4 4 4 9 (5)(743)
Group eliminations
744 100 360 (260)(644)384 13 10 361(6)(1,583)1,950 6,994 6,994
Continuing operations
New Group structure (FY25)
320 (4)119 (123)(324)201 (1)7 195 (589)784 1,895 2,089
Light Building Products
211 117 117 (94)94 3 91 (9)(406)506 1,641 2,042
Heavy Building Materials
79 47 60 (13)(32)19 19(1)(361)381 1,504 1,528
Distribution
62 52 4 48 (10)58 6 52 1 (71)122 520 557
Residential & Development
97 39 45 (6)(58)52 52 1 (101)152 1,433 1,511
Construction
(29)(155)15 (170)(126)(44)8 (52)2 (64)10 1 10
Corporate
4 4 4 4 4 9 (5)(743)
Group eliminations
744 100 360 (260)(644)38413 10 361 (6)(1,583)1,950 6,994 6,994
Continuing operations
| FY25 Results Presentation | 20 August 2025 | Fletcher Building Limited55
1. Upstream construction materials earnings are split approximately 73% / 23% between quarry earnings and cement earnings in FY25 and 65% / 35% in FY24
Divisional EBIT breakdowns
12 months to JUN 202412 months to JUN 2025Divisional EBIT (before Sig Items) (NZ$m)
199161
Wood & Panels
3527
Water
2924
Insulation
263211
Total Light Building Products EBIT (excldivisional costs)
9669
Upstream construction materials
1
3729
Downstream construction materials
24(0)
Steel
15798
Total Heavy Building Materials EBIT (excldivisional costs)
5325
PlaceMakers
(2)(3)
Mico
5122
Total Distribution EBIT (excldivisional costs)
9566
Fletcher Living
63
Development
(0)(1)
Vivid
3(1)
Apartments
(5)(9)
Clever Core
10058
Total Residential & Development EBIT (excldivisional costs)
423
Higgins
3328
Brian Perry Civil
39
Major Projects
30
Other
4260
Total Construction EBIT (excldivisional costs)
| FY25 Results Presentation | 20 August 2025 | Fletcher Building Limited56
Credit metrics
JUN 2024
12 MONTHS
JUN 2025
12 MONTHSCredit metrics & covenants
$1,766m
$999m
Pre-IFRS 16 Net Debt (target $400m -$900m)
2.4x
1.6x
Senior Leverage Ratio (covenant 3.5x, moving to 3.25x in FY26)
3.5x
3.9x
Senior Interest Cover Ratio (covenant 2.25x, moving to 3.0x in 2H26)
3.2x
3.4x
Total Interest Cover Ratio (covenant 2.0x)
Customer NPS by Business Unit
Strongly positive NPS scores across the majority of the portfolio
| FY25 Results Presentation | 20 August 2025 | Fletcher Building Limited57
1. Note some business units have been broken down into their key products (e.g. Firth Certified & Firth Masonry)
Customer NPS
1
As at 30 June 2025
83
78
77
77
76
74
67
62
57
54
51
50
50
46
45
45
44
39
36
35
18
(2)
Employee eNPSby Business Unit
Strongly positive eNPSscores across the majority of the portfolio
| FY25 Results Presentation | 20 August 2025 | Fletcher Building Limited58
Employee eNPS
As at 30 June 2025
74
62
57
56
53
49 49
47
40
39 39
38
37
34
33
32
31
28
18
16
-6
FY25 carbon statistics
| FY25 Results Presentation | 20 August 2025 | Fletcher Building Limited59
Note: Emissions reported using location-based methodology. Market-based emissions are published on our website.
Apparent increases in FY25 freight and business travel data are due to improved data and do not reflect real-world change in emissions.
24% reduction in scope 1 & 2 emissions from our FY18 base year
The decrease in scope 1 & 2 emissions was driven by reduced emissions from cement manufacturing
and decreasing emission factors from the Australian electricity grid (we note that as market conditions
improve, absolute emissions from these sources may increase)
The quantity and quality of scope 3 (supply chain) data continues to improve as we further engage with
our key suppliers of purchased goods and services. A significant scope 3 inclusion this year are the in-
use and end-of-life emissions from the key products we manufacture and residential houses we
construct. This is a direct benefit from the life cycle assessment studies that we undertook for our
products and published as Environmental Product Declarations (EPDs)
FY18FY24FY25
Cement Operations
Manufacture of cement - thermal fuels and clinker
Process Heat - Other Fossil
Natural gas and LPG used for process heat in manufacturing
Transport Fuel
Fuel used in vehicles
Electricity AU
Electricity used in Australian operations
Purchased Steel
Embodied emissions from purchased steel
Construction operations and materials
Construction materials and activities, raw materials used in manufacturing
Freight
Contracted freight services (land, water, air)
In-use and end-of-life emissions from sold products
In-use and end-of-life emissions from sold products we manufacture
Purchased Cement
Embodied emissions in purchased cement
Well-to-tank emissions
Upstream emissions associated with production of liquid fuels
Business travel & employee commuting
Flights, accommodation, rental cars, employee commuting and remote working
Emissions (kt CO
2
e)
Our key emissions sources
Scope 3
Scope 1
33
1925
31
Scope 2
129217
136111
4753
200180
728703
221258
545
91
527
81
6461
356
138
Not measured
22
37
25
663
98
72
276
Not measured
ROIC framework
| FY25 Results Presentation | 20 August 2025 | Fletcher Building Limited60
NOPAT
(trailing 12-months)
Invested
capital
(Average month end
for LTM)
÷ =
ROIC
Invested capital components
A disciplined capital allocation framework driving investment decisions, performance accountability and sustainable
value creation across business units
EBIT (pre significant items)
×
(1 –tax rate)
NOPAT calculation
Net working
capital
InvestmentsFixed assets
ROU assetsIntangibles
+++
+
ROIC framework
•ROIC serves as the primary investment decision
framework, ensuring all capital allocation
decisions are evaluated against value creation
potential
•Business units operate within industry-specific
ROIC targets that exceed WACC through the cycle
•All capital expenditure proposals must
demonstrate alignment with the assigned ROIC
thresholds before approval
•Continuous monitoring of ROIC performance
against targets, with regular assessment of
invested capital efficiency across all business
units
IplexAustralia -Industry Response & legal proceedings
House remediations and pipe replacements building momentum, no change to provisions
| FY25 Results Presentation | 20 August 2025 | Fletcher Building Limited61
Recap
•On 13 November 2024, IplexAustralia agreed to the Industry Response (“IR”) with the WA Government and builders
•At the November announcement, IplexAustralia recorded a provision of A$155m (net of A$30m contribution from the WA
Government), which covers IR remediation costs (A$125m), leak detector costs (A$15m), and head office costs (A$15m). As of 30
June 2025, the provision incurred approximately A$13 million (NZ$14 million) of costs to that point in time
•This provision is separate from and additional to the Interim Investigation Fund provision, which had a cost of A$17.8m
Remediation update
•38builders have signed up to the IR and are undertaking the agreed work and remediation programme. BGC (which is
responsible for constructing ~55% of the eligible WA homes), has not joined the IR. The provision includes allowances for homes
built by BGC, as BGC has the option to participate in the IR at any time. BGC has not ruled out joining the IR in the future andIplex
Australia remains open to engaging with BGC as to how that could be achieved
•The IR includes a roll out of leak detector units to eligible homes, free of charge. Information from the IR has confirmed thatthe
cost of leak and damage repairs are reduced where the home has been fitted with a leak detector unit
•As at30 June 2025, 55 homes have been fully remediated, and over 2,000 homes have had leak detector units installed (this
includes BGC homes)
•Costs incurred to date under the IR by IplexAustralia are in line with the estimates used to derive the current provision
•Our estimate of WA homes that will experience one or more plumbing failures over timeremains broadly consistent with what
was reported in our half-year results in February 2025
•To the extent that BGC remains outside the IR, the repair costs and associated cash flows for IplexAustralia are expected to be
proportionally lower (BGC homes are being fitted with leak detectors)
Class action & BGC proceedings
•On 6 and 27 August 2024, the Group announced that a class action and BGC proceedings had been filed against IplexPipelines
Australia (IplexAustralia). IplexAustralia is defending the class action and BGC proceedings and has also brought cross-claims
against certain WA builders and plumbers. The proceedings are both currently in the discovery phase and are expected to remain
in that phase for at least the rest of this calendar year
•The outcome of both these proceedings and associated liabilities, if any, remains uncertain
Industry Response progress
Indicative
Average Cost
per unit under
IR (A$)
Completed as
at
30-June-25
Completed as
at
31-Dec-24
Activity
~$1,550 2,003 (
1,411)592
Leak detector
Installation
~$3,600996 (
264)
1
732
Ceiling Pipe
Replacement
~$32,000
3
55 (
51)5
Full Home
Remediation
2
1. Excludes Ceiling Pipe Replacements completed by BGC (data not available)
2. Pipe has been completed removed from the home
3. Indicative average cost is for the remediation of standard homes with pipe in
the walls and ceilings. Exceptions (non-standard homes) are costed separately in
Iplex’sprovision estimate.
Laminex Australia –Silicosis
Contributed $0.4m to settlements in FY25 ($1.3m in FY24)
| FY25 Results Presentation | 20 August 2025 | Fletcher Building Limited62
•Laminex Australia (together with other engineered stone manufacturers, distributors, and fabricators in Australia) is the subject of a number of silica related personal injury
claims in Australia.
•Laminex Australia has settled the majority of claims that have been brought against it to date, and in FY25 Laminex Australiacontributed $0.4 million (2024: $1.3m) to claim
settlements.
•The Group has considered the exposure Laminex Australia may have for the existing and future claims and, to the extent it considers appropriate to do so, has provided for
them. Based on currently available information, no change in provision amount is required.
•While regulators in multiple States are currently seeking a greater contribution from the industry to settlement amounts thanhas been the case historically, Laminex
Australia does not accept the basis for seeking greater contribution. However there is a risk that the proportionate contribution by the industry to settlement amounts may
increase in future claims.
•Notwithstanding the information obtained from settling claims in recent years, there remains significant uncertainty in relationto the Group's full exposure to these claims,
including:
•the number of workers affected by silicosis as a result of engineered stone provided by manufacturers and fabricators in Australia
•the number of claims that may be received and the timing of them
•the nature of those claims and the amounts sought to be recovered, which vary considerably based on the condition and circumstances of the injured worker
•the size of any settlement amounts agreed or damages awarded, particularly given different laws in various States; and
•the degree to which other parties, such as the worker’s employer and other manufacturers, are liable to (and do) contribute to any amount owed to the worker.
---
Annual Report 2025
Fletcher Building Limited
This report and our previous reports and presentations
are available at www.fletcherbuilding.com.
Chair and CEO Letter 03
Financial Statements 05
Notes to the Consolidated Financial Statements 11
Independent Auditor’s Report 70
Mandatory Disclosures
Corporate Governance 75
Climate-related Disclosures 75
Directors 76
Other Disclosures 82
When used in this annual report, references to the ‘Company’ are references
to Fletcher Building Limited. References to ‘Fletcher Building’ or the ‘Group’
are to Fletcher Building Limited, together with its subsidiaries and its interests
in associates and joint ventures. References to $ and NZ$ are to New Zealand
dollars unless otherwise stated.
Welcome to the interactive PDF. For the best experience, use Adobe
Acrobat Reader. Click on the sections above to go to the desired
pages. To go back to the contents, click on the
CONTENTS
menu
button on the top right of each page. The financial statements, notes
and references are also clickable for your convenience.
Contents
This Annual Report for the financial year ended 30 June 2025
is dated 20 August 2025 and is signed on behalf of the Board by:
Peter Crowley
Chair
Andrew Reding
Managing Director
02
Fletcher Building Limited Annual Report 2025
• We have undertaken a comprehensive strategic review
to reset our focus and position the business for long-term,
sustainable performance. This confirmed our medium-term
focus on the manufacturing and distribution of building
products and materials.
• We have reorganised our divisional structure, effective
from 1 July 2025, into five strategic divisions: Light Building
Products, Heavy Building Materials, Distribution, Residential
and Development, and Construction.
• We have started the streamlining of our corporate centre,
progressed the closure or divestment of underperforming
assets, and deferred capital-heavy initiatives that no longer
align with our strategy.
• We have made good progress on our legacy issues:
−In June 2025, a settlement was reached with the
New Zealand Transport Agency (NZTA) on the Pūhoi
to Warkworth motorway project.
−The construction of the New Zealand International
Convention Centre (NZICC) is nearing completion and
remains on schedule for hand over in 2025 for opening
in early 2026.
−The Industry Response to the Western Australian plumbing
issues was finalised and signed with a A$155 million
(NZ$170 million) provision recognised.
• We have maintained our strong safety culture, with robust
systems across our business.
While significant progress has been made, substantial work
remains to complete Fletcher Building’s turnaround into
a leaner, more focused organisation. Our continued efforts
are directed toward enhancing financial performance,
strengthening shareholder returns, maintaining a resilient
balance sheet, and applying disciplined capital allocation.
No dividend is being declared in respect of FY25. As signalled at
our Investor Day in June, dividends are only expected to resume
once the Group is in the lower half of the net debt target range
of $400m – $900m, at which time the Group's dividend policy
will be reset and communicated to shareholders.
On behalf of the Board and management, we would like to
extend our thanks to our teams across Fletcher Building for their
resilience and commitment during a year of profound change
and challenges. And to our shareholders, thank you for your
ongoing support and belief in our future.
Chair and CEO Letter
Dear Shareholders
In a departure from the previous approach, this annual report
is focused on presenting our FY25 consolidated financial
statements and required regulatory disclosures. Shareholders
seeking more detailed commentary on the Group’s performance
in FY25 are directed to the market announcement and investor
presentation that accompany our FY25 financial results and that
are available at https://fletcherbuilding.com/investor-centre.
FY25 has been one of the most demanding years in recent
memory, both for Fletcher Building and the wider industries
in which we operate. Our business has faced tough market
conditions, significant internal change, and the weight of long-
standing legacy issues.
Much has been accomplished during FY25:
• We completed the sale of our Australian Tradelink® business
in September 2024, for a sale price of A$170 million, with
A$160 million cash proceeds received in FY25.
• We undertook a $700 million capital raise in November
2024 with ~$680 million net cash proceeds from the equity
raise used to repay bank debt of $511 million and US Private
Placement debt of $169 million.
• We completed our Board renewal, with the appointment
of a new Chair and three new non-executive directors.
• We refreshed our executive leadership team, with a new
Managing Director and Chief Executive Officer and five other
key appointments in 2024.
• We have achieved $200 million in gross cost savings and
expect to deliver $15 million in annualised fixed cost savings
through corporate restructuring.
Peter Crowley
Chair
Andrew Reding
Managing Director & CEO
Andrew Reding
Managing Director & CEO
Peter Crowley
Chair
03
Fletcher Building Limited Annual Report 2025
CONTENTS
Financial Statements
04
Fletcher Building Limited Annual Report 2025
CONTENTS
Continuing operationsNote
2025
NZ$M
2024
NZ$M
Revenue46,994 7,683
Cost of goods sold(5,044)(5,523)
Gross margin1,950 2,160
Warehouse and distribution expenses6(588)(608)
Selling, general and administrative expenses6(995)(1,063)
Other operating income/(expenses)6(6)(2)
Share of profits of associates and joint ventures2210 10
Revaluation gain on investment property136 2
Other gains/(losses)67 10
Significant Items2.2(644)(333)
(Losses)/earnings before interest and taxation (EBIT)(260)176
Lease interest expense(70)(58)
Funding costs17(102)(142)
Losses before taxation(432)(24)
Taxation benefit/(expense)2667 (55)
Losses after taxation from continuing operations(365)(79)
Earnings attributable to non-controlling interests(2)(7)
Net losses from continuing operations attributable to the shareholders(367)(86)
Net losses from discontinued operation2.4(52)(141)
Net losses attributable to the shareholders(419)(227)
Net losses per share (cents)5
Basic (41.4)(27.7)
Diluted (41.4)(27.7)
Net losses per share from continuing operations (cents)5
Basic (36.2) (10.5)
Diluted (36.2) (10.5)
Weighted average number of shares outstanding (millions of shares)5
Basic1,013819
Diluted1,013819
Dividends declared per share (cents)19
The accompanying notes form part of and are to be read in conjunction with these consolidated financial statements.
On behalf of the Board, 20 August 2025.
Peter Crowley
Chair
Consolidated Income Statement
For the year ended 30 June 2025
Sandra Dodds
Director, Chair of Audit and Risk Committee
05
Fletcher Building Limited Annual Report 2025
CONTENTS
Consolidated Statement of Comprehensive Income
For the year ended 30 June 2025
Note
2025
NZ$M
2024
NZ$M
Net losses attributable to shareholders(419)(227)
Net profit attributable to non-controlling interests2 7
Net losses after tax
(417)(220)
Other comprehensive income/(loss)
Items that do not subsequently get reclassified to Consolidated
Income Statement:
Movement in pension reserve(7)21
(7)21
Items that may be reclassified subsequently to Consolidated
Income Statement in the future:
Movement in cash flow hedge reserve(7)(7)
Movement in currency translation reserve(14)(1)
Reclassification of foreign currency translation reserve to
Consolidated Income Statement
2.453
32 (8)
Other comprehensive income25 13
Total comprehensive loss for the year(392)(207)
Total comprehensive income/(loss) for the year arises from:
Continuing operations(393)(66)
Discontinued operation1 (141)
Total comprehensive loss for the year(392)(207)
The accompanying notes form part of and are to be read in conjunction with these consolidated financial statements.
06
Fletcher Building Limited Annual Report 2025
CONTENTS
Consolidated Statement of Movements in Equity
For the year ended 30 June 2025
NZ$MNoteShare capitalRetained earningsShare-based payments reserveCash flow hedge reserveCurrency translation reservePension reserveTotalNon-controlling interestsTotal equity
Total equity at 30 June 2023
2,9936342810(78)633,650273,677
Total comprehensive income/(loss) for the year(227)(7)(1)21 (214)7 (207)
Movement in non-controlling interests (23)(23)
Dividends paid to shareholders of the parent19(124)(124)(124)
Movement in share-based payment reserve2 5 (2)5 5
Total equity at 30 June 20242,995 288 26 3 (79)84 3,317 11 3,328
Total comprehensive income/(loss) for the year(419)(7)39 (7)(394)2 (392)
Movement in non-controlling interests2 2 (8)(6)
Movement in share-based payment reserve6 4 (12)(2)(2)
Issue of shares20679 679 679
Total equity at 30 June 20253,680 (125)14 (4)(40)77 3,602 5 3,607
The accompanying notes form part of and are to be read in conjunction with these consolidated financial statements.
07
Fletcher Building Limited Annual Report 2025
CONTENTS
Consolidated Balance Sheet
As at 30 June 2025
AssetsNote
2025
NZ$M
2024
NZ$M
Current assets:
Cash and cash equivalents7 139 311
Current tax assets26 29 28
Contract assets3 50 142
Derivatives18 8 10
Debtors8 849 914
Inventories9 1,325 1,276
Total current assets before held for sale 2,400 2,681
Assets classified as held for sale 507
Total current assets 2,400 3,188
Non-current assets:
Property, plant and equipment12 2,223 2,207
Investment property13 126 100
Intangible assets14 703 1,034
Right-of-use assets15 1,246 1,191
Investments in associates and joint ventures22 218 221
Inventories9 580 594
Retirement plan assets27 150 152
Derivatives18 43 46
Deferred tax assets26 209 136
Total non-current assets 5,498 5,681
Total assets 7,898 8,869
Liabilities
Current liabilities:
Creditors, accruals and other liabilities10 1,171 1,142
Provisions11 278 171
Lease liabilities15 172 164
Current tax liabilities26
Derivatives18 19 18
Contract liabilities3 56 166
Borrowings16 60 86
Total current liabilities before held for sale 1,756 1,747
Liabilities directly associated with assets held for sale 336
Total current liabilities 1,756 2,083
Non-current liabilities:
Creditors, accruals and other liabilities10 31 134
Provisions11 61 28
Lease liabilities15 1,325 1,272
Derivatives18 6 2
Borrowings16 1,112 2,022
Total non-current liabilities 2,535 3,458
Total liabilities 4,291 5,541
Equity
Share capital20 3,680 2,995
Reserves(78) 322
Shareholders' funds 3,602 3,317
Non-controlling interests21 5 11
Total equity 3,607 3,328
Total liabilities and equity 7,898 8,869
The accompanying notes form part of and are to be read in conjunction with these consolidated financial statements.
08
Fletcher Building Limited Annual Report 2025
CONTENTS
Consolidated Statement of Cash Flows
For the year ended 30 June 2025
Note
2025
NZ$M
2024*
NZ$M
Cash flow from operating activities
Receipts from customers7,311 8,650
Receipts from residents – residents' loans – new occupation right agreements
(ORA)
27 17
Receipts from residents – residents' loans – resales of ORA
Payments to suppliers, employees and other(6,837)(8,064)
Income tax paid(15)
Net cash from operating activities
7
501 588
Cash flow from investing activities
Sale of subsidiaries174
Acquisition of subsidiaries(1)(11)
Investments in joint ventures and associates(4)
Dividends received16 10
Interest income received6 5
Sale of property, plant and equipment56 7
Purchase of property, plant and equipment and intangible assets(280)(372)
Investment in mining, consenting and stripping(16)(17)
Payments for investment property and development of investment property(12)(20)
Net cash from investing activities(61)(398)
Cash flow from financing activities
Funding costs paid(106)(139)
Funding costs paid and capitalised to property, plant and equipment
and intangible assets
(13)(13)
Lease interest paid(72)(66)
Principal elements of lease payments(189)(206)
Contributions from non-controlling interests42 15
Distribution to non-controlling interests(5)(17)
Issue of shares20679
Repurchase of shares (transferred to treasury stock)
Dividends paid to shareholders of the parent (124)
Net (repurchase)/issue of capital notes16(80)(46)
Net (repayment)/drawdown of borrowings16(868)352
Net cash from financing activities(612)(244)
Net movement in cash held(172)(54)
Add: opening cash and cash equivalents7311 365
Effect of exchange rate changes on net cash
Closing cash and cash equivalents
7
139 311
* Comparatives have been restated, refer to note 2.1.
The accompanying notes form part of and are to be read in conjunction with these consolidated financial statements.
09
Fletcher Building Limited Annual Report 2025
CONTENTS
NoteDescriptionPage
Financial Performance
1
Statement of accounting policies
11
2
Key estimates, judgements, segments and management performance metrics
12
3
Construction accounting
28
4
Revenue from contracts with customers
31
5
Net earnings per share
32
6
Consolidated Income Statement disclosures
33
Working Capital Management
7
Cash and cash equivalents
34
8
Debtors
34
9
Inventories, including land and property developments
35
10
Creditors, accruals and other liabilities
36
11
Provisions
37
Long-term Investments
12
Property, plant and equipment
40
13
Investment property
42
14
Intangible assets
43
15
Leases
45
Funding and Financial Risk Management
16
Borrowings
47
17
Net funding costs
51
18
Financial risk management
53
Group Structure and Related Parties
19
Dividends and shareholder tax credits
59
20
Capital
59
21
Non-controlling interests
60
22
Investments in associates, joint ventures and joint operations
60
23
Related party disclosures
61
Other Information
24
Capital expenditure commitments
62
25
Contingent liabilities
62
26
Taxation
63
27
Retirement plans
65
28
Share-based payments
67
10
Fletcher Building Limited Annual Report 2025
CONTENTS
Notes to the Consolidated Financial Statements 2025
Contents
Notes to the Consolidated Financial Statements 2025
1. STATEMENT OF ACCOUNTING POLICIES
General information
The consolidated financial statements presented are those of Fletcher Building Limited (the Company) and its subsidiaries (the
Group). The Group is primarily involved in the manufacturing and distribution of building materials and residential, commercial and
infrastructure construction. Fletcher Building Limited is domiciled in New Zealand. The registered office of the Company is 810 Great
South Road, Penrose, Auckland.
The Company is registered under the Companies Act 1993 and is a Financial Markets Conduct Act (FMCA) 2013 reporting entity in
terms of the Financial Reporting Act 2013. The Group is a for-profit entity.
Basis of presentation
These consolidated financial statements have been prepared in accordance with Generally Accepted Accounting Practice in New
Zealand, which is the New Zealand equivalent to International Financial Reporting Standards (NZ IFRS). They also comply with
International Financial Reporting Standards.
These financial statements are presented in New Zealand dollars ($), which is the Group’s presentation currency, and rounded to the
nearest million unless otherwise stated.
The consolidated financial statements comprise the income statement, statement of comprehensive income, statement of movements
in equity, balance sheet, statement of cash flows, and statement of accounting policies, as well as the notes to these financial
statements.
Accounting convention
Accounting policies have been consistently applied by the Group and unless otherwise stated, are in line with prior year. These
financial statements are based on the general principles of historical cost accounting, except for assets and liabilities measured
at their fair value, as described below:
−Certain financial assets and liabilities (including derivative instruments) – measured at fair value;
−Defined benefit pension plan asset/liabilities – measured at fair value; and
−Investment property – measured at fair value or revalued amounts.
Where necessary, certain comparative information has been reclassified to conform to changes in presentation in the current year.
Accounting policies are disclosed within each of the relevant notes to the consolidated financial statements and are denoted by the
adjacent coloured line.
Critical accounting estimates and judgements
The preparation of consolidated financial statements in conformity with NZ IFRS requires the Directors to make estimates and
judgements that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of
the consolidated financial statements and the reported amounts of sales and expenses during the reporting period. Key estimates,
assumptions and judgements are continually evaluated and are based on historical experience and other factors, including
expectations of future events that are believed to be reasonable under the circumstances. Actual results could differ from those
estimates.
The estimates and judgements that are critical to the determination of the amounts reported in the consolidated financial
statements have been disclosed with the relevant notes in the financial statements and are indicated by this coloured line,
or where applied to the consolidated financial statements as a whole, are detailed in the corresponding notes in the consolidated
financial statements.
Basis of consolidation
The consolidated financial statements comprise the Company, its controlled entities and its interest in associates, partnerships and
joint arrangements. Intercompany transactions and balances are eliminated in preparing the consolidated financial statements.
Subsidiaries
Subsidiaries are all entities over which the Group has control. The Group controls an entity when the Group is exposed to, or has
rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power to direct the
activities of the entity.
Subsidiaries are included in the consolidated financial statements using the acquisition method of consolidation, from the date control
commences until the date control ceases. The acquisition method of accounting is used to account for all business combinations,
regardless of whether equity instruments or other assets are acquired.
11
Fletcher Building Limited Annual Report 2025
CONTENTS
Foreign currency translation
(i) Translation of the financial statements of foreign operations
The assets and liabilities of the Group’s overseas operations are translated into New Zealand currency at the rates of exchange
prevailing at balance date. The revenue and expenditure of these entities are translated using an average exchange rate reflecting
an approximation of the appropriate transaction rates. Exchange variations arising on the translation of these entities and other
currency instruments designated as hedges of such investments are recognised directly in the currency translation reserve and
in the Consolidated Statement of Comprehensive Income. The cumulative exchange variations are reclassified subsequently to
the Consolidated Income Statement if the overseas operation to which the reserve relates are sold or otherwise disposed of.
(ii) Foreign currency transactions
Transactions in foreign currencies are translated at exchange rates at the date of the transactions. Monetary assets and liabilities
in foreign currencies at balance date are translated at the rates of exchange prevailing at balance date.
Foreign exchange gains and losses resulting from the settlement of such transactions are recognised in earnings, except where
deferred in the Consolidated Statement of Comprehensive Income as qualifying cash flow hedges and qualifying net investment
hedges.
Non-monetary assets in foreign currencies are translated at the exchange rates in effect when the amounts of these assets
were recognised.
The following key exchange rates were applied in the preparation of the consolidated financial statements:
NZD/AUD20252024Change
Average rates0.91380.9228(1.0)%
Closing rates0.92600.91501.2%
2. KEY ESTIMATES, JUDGEMENTS, SEGMENTS AND MANAGEMENT PERFORMANCE METRICS
This section provides details of the key estimates and judgements undertaken when preparing these consolidated financial statements.
2.1 CHANGES IN ACCOUNTING POLICIES, INTERPRETATION AND AGENDA DECISIONS
New and amended accounting standards and interpretation adopted
There were no new or amended standards and interpretations that became effective for the year ended 30 June 2025 that had a
material impact on the Group. Additionally, the Group has not early adopted any new or amended standards that have been issued but
are not yet effective. These standards, amendments, or interpretations are not expected to have a material impact on the current or
future reporting periods.
New and amended accounting standards and interpretation not yet effective
NZ IFRS 18 - Presentation and Disclosure in Financial Statements
In May 2024, the XRB issued NZ IFRS 18 Presentation and Disclosure in Financial Statements, as a replacement for NZ IAS 1, effective
for the Group’s financial year beginning 1 July 2027. The requirements in the new standard are designed to achieve comparability of the
financial performance of similar entities, especially related to how “operating profit or loss” is defined. It also requires new disclosures
for some management-defined performance measures. The Group is in the process of assessing the impact of adopting the new
standard and, based on its preliminary assessment, does not expect the adoption to have a material impact on the consolidated
financial statements.
Changes in accounting policies: classification of interest paid as a financing cash flow and dividends and interest received
as investing cash flow
Effective for the FY25 consolidated financial statements, the Group voluntarily changed its accounting policy for the classification
of interest paid, interest received and dividends received in the Consolidated Statement of Cash Flows. Previously, interest paid was
presented net of interest received within operating activities, reflecting its inclusion in profit or loss, and in investing activities when
capitalised to the balance sheet. Dividends received were presented within operating activities, reflecting its inclusion in profit or
loss. Under the new policy, all interest paid is presented within financing activities, and interest received as investing activities, as the
classification provides a more relevant representation of the nature of these costs and income, while dividends received are presented
within investing activities, reflecting the cash flow returns of investments in associates and joint ventures. This change in presentation
policy within the Consolidated Statement of Cash Flows aligns to the required amendments to NZ IAS 7 Statement of Cash Flows,
which will become effective alongside NZ IFRS 18 Presentation and Disclosure in Financial Statements in future periods.
This change constitutes a voluntary change in accounting policy under NZ IAS 8 Accounting Policies, Changes in Accounting
Estimates and Errors and has been applied retrospectively. Accordingly, comparative amounts for the year ended 30 June 2024 have
been restated. The change has no impact on the income statement, balance sheet, or total cash flows.
12
Fletcher Building Limited Annual Report 2025
Notes to the Consolidated Financial Statements 2025 (Continued)
CONTENTS
The impact of the restatement on the Consolidated Statement of Cash Flows on the comparative information is as follows:
30 June 2024
As previously
reported
NZ$M
Adjustment
NZ$M
Restated
NZ$M
Net cash flow from operating activities398 190 588
Net cash flow from investing activities(426)28 (398)
Net cash flow from financing activities(26)(218)(244)
Net movement in cash held(54) (54)
2.2 SEGMENT AND NON-GAAP FINANCIAL INFORMATION AND MANAGEMENT PERFORMANCE METRICS
Segmental information
Segmental information is presented in respect of the Group’s industry and geographical segments. The use of industry segments
as the primary format is based on the Group’s management and internal reporting structure, which recognises groups of assets and
operations with similar risks and returns.
Description of industry segments
Building
Products
The Building Products division is a manufacturer, distributor, and marketer of building products used in the residential,
industrial and commercial markets in New Zealand.
Distribution
The Distribution division consists of building and plumbing product distribution businesses in New Zealand.
Concrete
The Concrete division includes the Group's interests in the concrete value chain, including extraction of aggregates, and
the production of cement, ready-mix concrete and concrete products. The division operates in New Zealand.
Australia
The Australia division manufactures and sells building materials for a broad range of industries across Australia.
Residential and
Development
The Residential and Development division primarily operates in New Zealand, but also in Australia. In New Zealand, the
division's operations include building and sale of residential homes and apartments, development and sale of commercial
and residential land, and management of retirement village assets. In Australia, the division's operations include
development and sale of commercial land. Development activity includes sale of land property which are surplus to the
Group's operating requirements.
Construction
The Construction division is a supplier of building and maintenance services for infrastructure projects across New
Zealand and the South Pacific. The division is exiting the New Zealand Vertical Building sector, with NZICC and WIAL
being the last projects for the Group.
Discontinued
operation
Discontinued operation comprises the Tradelink® businesses classified as held for sale from 1 April 2024 and disposed
of on 30 September 2024.
Non-GAAP financial information policy
For internal reporting to the Board, the Audit and Risk Committee and external reporting to its stakeholders, the Group uses certain
non-GAAP financial measures (alternative performance measures) alongside its NZ IFRS results to provide additional insight into
the Group’s underlying performance and financial position. These measures – which include earnings before interest, taxation,
depreciation, depletion and amortisation expense (EBITDA) before Significant Items, earnings before interest and taxation (EBIT) before
Significant Items, net earnings per share before Significant Items, Trading Cash before Significant Items, Free Cash before Significant
Items, Funds, and Net Debt – are not defined or specified under NZ IFRS. The Group believes that these non-GAAP measures, which
are not considered to be a substitute for or superior to NZ IFRS measures, provide stakeholders with additional useful information
on the performance of the business, with a clearer understanding of the Group’s underlying operating results and financial position.
Management uses these non-GAAP financial information measures consistently from period to period for internal planning and
reporting. The Group adheres to applicable regulatory guidance on non-GAAP disclosures, emphasizing transparency, consistency,
and comparability in how these metrics are calculated and presented. Importantly, each non-GAAP measure is reconciled to the
closest IFRS measure in the accounts so that stakeholders can clearly tie these figures back to audited IFRS results.
13
Fletcher Building Limited Annual Report 2025
Notes to the Consolidated Financial Statements 2025 (Continued)
CONTENTS
Description of Non-GAAP Financial Information
EBIT and
EBITDA before
Significant Items
Net earnings before
Significant Items
The Group makes certain Significant Item adjustments to the statutory profit measures in order to derive non-GAAP
measures. The Group discloses certain non-operating items as Significant Items. The Group’s policy is to recognise
Significant Items for transactions or events outside of the Group’s ongoing operations that have a significant impact
on reported profit. This policy provides stakeholders with additional useful information as a means to assess the
year-on-year trading performance of the Group. On this basis, Significant Items include, but are not limited to, the
following:
−Gains and losses arising from mergers and acquisition (M&A) activity (i.e. business acquisitions and disposals)
and associated costs.
−Restructuring and other associated costs arising from significant strategy changes that are not considered by the
Group to be part of the normal operating costs of the business.
−Impacts of significant one-off events that have a material effect on the Group’s financial performance and asset
valuation.
−Impairment charges and provisions that are considered to be significant in nature and/or value to the
trading performance of the business.
−Net gains and losses on the disposal of properties and businesses where a commitment to close has been
demonstrated.
In addition to the above, EBITDA before Significant Items excludes the depreciation and amortisation of
fixed, intangible and right-of-use (RoU) assets, while net earnings before Significant Items adjust for the net
of tax consequences of Significant Items recognised in the period to reflect an “underlying” net earnings for
continuing operations.
Trading and Free
cash before
Significant Items
Trading cash (or trading cash flow) is a non-GAAP measure highlighting cash generated or used by the Group’s
operations. Derived from NZ IFRS net operating cash flows, it adjusts for non-trading related items. Excluding
financing, tax, Significant Items, legacy cash flows, but including lease payments. Trading cash focuses on recurring
cash flows from trading activities, aiding in assessing liquidity and operational efficiency. “Trading cash” is adjusted
for net capital expenditure invested during the period to reflect the “Free cash” generated or consumed which
impacts external borrowings, funding costs and potential dividends to shareholders. "Free cash" at a Group level also
includes cash tax payments. Reconciliations to the NZ IFRS cash flow statement are provided below.
Net Debt
Net Debt is the total of all interest-bearing borrowings (loans, USPP, capital notes, other debt), adjusted for debt
hedging activities, less cash and cash equivalents. This metric is used in determining the Group’s leverage and
gearing ratio. It is used by management to assess financial risk and capital structure metrics. Though Net Debt is
a non-GAAP measure, it is derived from NZ IFRS line items (borrowings, derivatives used in hedging of borrowings,
cash) on the balance sheet. A full reconciliation of Net Debt is included in note 16.
Funds and
Invested Capital
"Funds" (or funds employed) represents the external assets and liabilities of the Group and is used for internal
reporting purposes. At a Group level, funds excludes net debt and deferred tax balances (with exception of deferred
tax on brands) and intercompany eliminations, while at a divisional or segment level, funds excludes net debt,
intergroup advances/borrowings, current and deferred tax balances (with the exception of deferred tax on brands).
This non-GAAP measure reflects the capital used in operations and assets generating earnings. Funds indicates the
capital intensity of the business and is used in return on capital measures. While NZ IFRS does not define "funds" as
a single figure, its components are derived from the audited balance sheet including investment in working capital,
fixed assets, indefinite life intangible assets and net RoU asset/liability positions.
“Invested Capital” is based on the same components as “Funds”, with the exception that it excludes RoU
lease liability positions.
14
Fletcher Building Limited Annual Report 2025
Notes to the Consolidated Financial Statements 2025 (Continued)
CONTENTS
Industry segments: Income statement
2025
NZ$M
Gross
Revenue
External
Revenue
Gross
MarginOverheads*
Other
operating
income/
(expenses)
(1)
Operating
Profit
Equity
accounted
earnings
Revaluation
(2)
and other
gains/(losses)
(3)
EBIT before
Significant
Items
Significant
ItemsEBIT
Depreciation,
depletion and
amortisation
expenseEBITDA
EBITDA
before
Significant
Items
Building Products 1,289 1,031 407 (301) 1 107 6 113 (92) 21 69 90 182
Distribution 1,528 1,504 381 (361) (1) 19 19 (32) (13) 60 47 79
Concrete 1,048 732 273 (172) (8) 93 3 96 (30) 66 78 144 174
Australia 1,794 1,773 610 (522) (2) 86 1 (1) 86 (296) (210) 89 (121) 175
Materials and distribution 5,659 5,040 1,671 (1,356) (10) 305 10 (1) 314 (450)
(136)
296 160 610
Residential and Development 557 520 122 (71) 1 52 6 58 (10) 48 4 52 62
Construction 1,511 1,433 152 (101) 1 52 52 (58)
(6)
45 39 97
Corporate 10 1 10 (64) 2 (52) 8 (44) (126) (170) 15 (155) (29)
Continuing operations
eliminations
(743) (5) 9 4 4 4 4 4
Continuing operations 6,994 6,994 1,950 (1,583) (6) 361 10 13 384 (644) (260) 360 100 744
Discontinued operation 210 202 57 (51) 6 6 (58) (52) (52) 6
Discontinued operation
eliminations
(8)
Group 7,196 7,196 2,007 (1,634) (6) 367 10 13 390 (702) (312) 360 48 750
2024
NZ$M
Gross
Revenue
External
Revenue
Gross
MarginOverheads*
Other
operating
income/
(expenses)
(1)
Operating
Profit
Equity
accounted
earnings
Revaluation
(2)
and other
gains/(losses)
(3)
EBIT before
Significant
Items
Significant
ItemsEBIT
Depreciation,
depletion and
amortisation
expenseEBITDA
EBITDA
before
Significant
Items
Building Products 1,345 1,093 442 (308) 2 136 7 143 (19) 124 64 188 207
Distribution 1,615 1,578 426 (376) 50 (1) 49 49 58 107 107
Concrete 1,082 782 301 (178) 2 125 4 1 130 4 134 75 209 205
Australia 1,979 1,925 682 (551) (3) 128 (1) (1) 126 (17) 109 81 190 207
Materials and distribution 6,021 5,378 1,851 (1,413) 1 439 10 (1) 448 (32) 416 278 694 726
Residential and Development 796 739 174 (76) 98 2 100 100 4 104 104
Construction 1,614 1,566 135 (110) 2 27 1 28 (292) (264) 42 (222) 70
Corporate 10 9 (81) (5) (77) 10 (67) (9) (76) 13 (63) (54)
Continuing operations
eliminations
(758) (9) 9
Continuing operations 7,683 7,683 2,160 (1,671) (2) 487 10 12 509 (333) 176 337 513 846
Discontinued operation 762 758 229 (222) 7 7 (155) (148) 36 (112) 43
Discontinued operation
eliminations
(4)
Group 8,441 8,441 2,389 (1,893) (2) 494 10 12 516 (488) 28 373 401 889
Note: External revenue includes income from the Group’s New Zealand Vertical Buildings Business (2025: $88 million;
2024: $159 million), which the Group is in the process of exiting The New Zealand International Convention Centre (NZICC)
represents the largest project in this business. EBIT before Significant Items, however, excludes any earnings or losses from
these projects that are reported separately as Significant Items.
* Overheads reflect warehouse, distribution, selling, general and administrative expenses.
(1) Other operating income/(expenses) include restructuring and redundancy costs, and costs associated with Golden Bay
®’s
MVAC ship breakdown. In the prior year, restructuring and redundancy costs were partially offset by insurance proceeds
received for business interruption costs from weather events in 2022 and 2023.
(2) Revaluation gains include gains recognised from the annual remeasurement of Vivid Living®’s investment properties
at each reporting date.
(3) Other gains/(losses) include gains/losses from the disposal of assets, net interest income on defined benefit plans,
and proceeds from the disposal of NZ ETS units.
15
Fletcher Building Limited Annual Report 2025
Notes to the Consolidated Financial Statements 2025 (Continued)
CONTENTS
Significant Items in FY25 from continuing operations include:
Building Products
Fletcher Steel restructure ($17 million)
During the year, Fletcher Steel recognised $10 million in asset write-downs across inventory, fixed assets, intangible assets and
right-of-use (RoU) assets, along with $1 million in redundancy costs associated with the announced divestment of the CSP Steel
business. A further $5 million write-down was recorded on Easysteel capital WIP assets, following a review and reprioritisation of
their capital investment and distribution network strategy, with $1 million in redundancy provisions recognised in connection with the
disestablishment of the broader Steel division. These amounts have been classified as Significant Items and disclosed separately due
to their non-recurring nature.
Winstone Wallboards® property rationalisation ($7 million)
Winstone Wallboards® exited two distribution centres in Auckland after the Group determined that the facilities were surplus to current
and future operational requirements. The decision was made as part of an ongoing review of the Group’s logistics network and asset
utilisation. One-off costs associated with the site exit were classified as Significant Items and disclosed separately due to their non-
recurring nature.
Iplex® New Zealand impairment ($68 million)
The Group recognised an impairment charge of $68 million in relation to the goodwill balance in the Iplex® New Zealand business.
Refer to note 2.3.
Distribution
PlaceMakers® Frame and Truss pause and pivot strategy ($18 million)
The Group announced a pause on further expansion of the PlaceMakers® Frame & Truss (F&T) network and a pivot in its growth
strategy to optimise existing capacity in the Group. As part of this shift, the planned development of a new F&T site at Felix Street,
Auckland, New Zealand was cancelled, with F&T operations instead to be consolidated into the former Clever Core® facility. This
decision enables increased throughput without the need for additional greenfield investment and avoided approximately $30 million
in capital expenditure. One-off costs incurred as a result of this pivot in strategy included the write-off of $12 million in fixed assets due
to a change in equipment requirements of the new F&T facility and a further $6 million relating to F&T specific capitalised costs at the
Felix Street site.
Mico® impairment ($14 million)
The Group recognised an impairment charge of $14 million in relation to the brands balance in the Mico® business. Refer to note 2.3.
Concrete
Humes® impairment ($30 million)
The Group recognised an impairment charge of $30 million in relation to the goodwill balance in the Humes® business. Refer to note 2.3.
Residential & Development
Clever Core® closure ($8 million)
The Group announced its decision to close its Clever Core® business following a strategic review of its financial performance, market
demand and capital efficiency. The closure formed part of the Group’s broader simplification strategy and will enable the repurposing
of the facility for use by PlaceMakers® Frame & Truss. One-off costs associated with the closure, include asset write-downs,
redundancy expenses and transition costs, which have been classified as Significant Items and disclosed separately due to their non-
recurring nature.
Other restructuring costs ($2 million)
The Residential and Development division has reviewed its operations to align more closely with current market conditions, including
the consolidation of its Auckland branch network. As part of this, the Northern branch is being closed and functions integrated across
other key locations to improve efficiency. This rationalisation has resulted in one-off costs, including employee redundancy expenses,
lease terminations and other exit-related costs, which have been classified as Significant Items and disclosed separately due to their
non-recurring nature.
Australia
Iplex® Australia Western Australia pipes matter ($180 million)
Iplex® Pipelines Australia (Iplex® Australia), in collaboration with the Western Australian (WA) Government and key industry
stakeholders, finalised the Industry Response (the IR) to address plumbing failures impacting some WA homes using Typlex Pro-Fit
pipe. As a result of its entry into the IR, Iplex® Australia recognised a pre-tax net provision of A$155 million (NZ$170 million) during
the period. The interim investigation fund established by Iplex® Australia in April 2023 in relation to these failures was extended up
to the finalisation of the agreement of the IR, at an additional cost during FY25 of A$2.8 million (NZ$3.1 million). The costs associated
with both the interim investigation fund and the IR have been classified as Significant Items. Additionally, Iplex® Australia incurred
A$7 million in legal costs associated with defending claims related to the matter during the period, which have also been classified
as a Significant Item. Refer to note 11.
Stramit® ($47 million) and Oliveri® ($49 million) impairment
The Group recognised combined impairment charges of $96 million in relation to the goodwill and brands balances in the Stramit®
and Oliveri® businesses. Refer to note 2.3.
16
Fletcher Building Limited Annual Report 2025
Notes to the Consolidated Financial Statements 2025 (Continued)
CONTENTS
Laminex® Australia site closures ($16 million) and silicosis legal costs ($1 million)
As part of a broader optimisation of its Laminex® Australia operations, the Group has discontinued the loss-making Laminex® MADE
product line and announced the closure of its Monkland (Queensland, Australia) manufacturing site, consolidating production into
more efficient facilities. These actions followed a review of capacity, cost structures and long-term demand, resulting in one-off
costs totalling $16 million, recognised as Significant Items. This comprised $8 million related to the Monkland site closure - including
a $4 million impairment of fixed assets, $2 million in closure expenses and $2 million in redundancy and associated costs - and an
additional $8 million from discontinuing the Laminex® MADE product line, primarily due to a $2 million impairment of fixed assets,
a $4 million inventory write-off and $2 million in other related costs. Additionally, the business incurred a further $1 million in legal
costs associated with silicosis claims.
Australia division closure ($3 million)
The Group announced the disestablishment of its Australian Division following a strategic review of structure, performance and cost
efficiency. Business units previously grouped under the division were reallocated into sector-specific divisions to improve integration,
simplify reporting lines and unlock cost synergies. The restructure resulted in the removal of a management layer and associated
support functions. These amounts have been classified as Significant Items and disclosed separately due to their non-recurring nature.
Construction
New Zealand International Convention Centre ($29 million)
The Group recognised an additional $15 million provision in relation to completing the final stages of the New Zealand International
Convention Centre project, along with a further $14 million of legal and associated legacy overhead costs incurred during the
period. The additional provision reflects updated estimates to complete commissioning, address defect remediation and secure
final regulatory approvals ahead of the planned handover in the second half of 2025. Refer to note 3.
Construction Fiji divestment and investment write down ($19 million)
The Group recognised a further $2 million loss on sale in relation to the divestment of 50% interest in its Fiji construction business,
driven by agreed working capital adjustments. Additionally, the Group fully impaired its remaining interest ($17 million), reflecting
ongoing underperformance, continued operating losses and material uncertainty regarding the joint venture’s future contract pipeline.
Remaining carrying value of the investment as at 30 June 2025 is nil.
South Pacific closures ($10 million)
As the Group exits its remaining wholly-owned construction operations in the South Pacific, it has incurred costs totalling $10 million.
These primarily consist of a $9 million loss related to remaining contract assets in Papua New Guinea and a $1 million write-down of
fixed and intangible assets following the closure of several regional branches.
Corporate
Corporate restructure ($2 million)
The Group completed the restructure of its Corporate and FletcherTech functions to simplify central operations and focus
resources on business-critical priorities. The restructure involved a reduction in overhead roles, consolidation of support services and
a refocus of digital investments within FletcherTech. As a result, one-off costs relating to redundancies, transitional support and other
related costs were incurred and classified as Significant Items. These costs are disclosed separately to provide clarity on their non-
recurring nature.
Digital@Fletcher ERP technology strategy review ($117 million)
The Group has now stopped the roll-out of its Digital@Fletcher ERP transformation programme in line with its decision to decentralise
decision-making to individual business units. The programme was originally designed to standardise systems and processes across
the Group's manufacturing and distribution businesses. To minimise future expenditure, the Group migrated the platform to SAP RISE,
a SaaS solution, in May 2025. Consequently, the Group has derecognised the previously capitalised ERP asset on its balance sheet,
with a carrying amount of $95 million and recognised an onerous contract provision of $22 million relating to committed licence costs
now deemed surplus to requirements. These charges have been classified as Significant Items and are disclosed separately due to
their non-recurring nature. See note 14.
Capital and funding restructure ($10 million)
Fletcher Building raised net proceeds of NZ$679 million in the equity raise carried out during the period (refer to note 20), with the
net proceeds subsequently being applied to repay and cancel existing debt facilities, including the partial early redemption of USPP
notes that were scheduled to mature in 2026 (see note 16). This early redemption of USPP notes led to a $10 million loss from the
partial close-out of the related CCIRS hedge instruments, which would otherwise no longer be considered effective, being recognised
in the income statement. The loss on close-out has been classified as a Significant Item incurred as part of the Group’s capital
restructuring activities.
Significant Items in FY25 from discontinued operation include:
Tradelink® disposal ($58 million)
On 30 September 2024, the Group completed the sale of Tradelink®, its Australian plumbing supplies business and recorded a
$58 million loss, classified as a Significant Item. This loss includes a $53 million reclassification of the foreign currency translation
reserve to the income statement and a further $5 million loss due to working capital and net debt adjustments on disposal,
see note 2.4.
17
Fletcher Building Limited Annual Report 2025
Notes to the Consolidated Financial Statements 2025 (Continued)
CONTENTS
Industry segments: Cash flow
2025
NZ$M
Cash
flow from
operating
activities
Adjust to
exclude: tax
payments
Adjust to
include: lease
payments
Trading
cash
Exclude:
Significant
Items and
legacy cash
flows
Trading cash
excluding
Significant
Items
Capital
expenditure
Proceeds
from
divestments
Investments
in Subs,
associates
and JVs
Dividends
received
Interest
received
Adjust to
include: tax
payments
Free cash
excluding
Significant
Items
Building Products 154 (2) (46) 106 1 107 (131) 53 (1) 9 37
Distribution 72 1 (63) 10 10 (23) (13)
Concrete 172 (39) 133 133 (72) 2 3 66
Australia 139 (59) 80 31 111 (46) 65
Materials and distribution 537 (1) (207) 329 32 361 (272) 55 (1) 12 155
Residential and
Development
47 (3) 44 44 (12) 32
Construction (22) 1 (30) (51) 120 69 (16) 16 (4) 4 69
Corporate (54) (9) (63) 2 (61) (6) 159 6 98
Continuing operations 508 (249) 259 154 413 (306) 230 (5) 16 6 354
Discontinued operation (7) (12) (19) (19) (2) (21)
Group 501 (261) 240 154 394 (308) 230 (5) 16 6 333
2024
NZ$M
Cash
flow from
operating
activities
Adjust to
exclude: tax
payments
Adjust to
include: lease
payments
Trading
cash
Exclude:
Significant
Items and
legacy cash
flows
Trading cash
excluding
Significant
Items
Capital
expenditure
Proceeds
from
divestments
Investments
in Subs,
associates
and JVs
Dividends
received
Interest
received
Adjust to
include: tax
payments
Free cash
excluding
Significant
Items
Building Products 229 1 (41) 189 17 206 (170) (4) 3 35
Distribution 108 4 (59) 53 53 (11) 42
Concrete 197 (35) 162 (3) 159 (92) 2 (7) 3 65
Australia 219 (54) 165 25 190 (53) 137
Materials and distribution 753 5 (189) 569 39 608 (326) 2 (11) 6 279
Residential and
Development
169 (3) 166 166 (20) 2 148
Construction (288) (26) (314) 384 70 (20) 3 4 57
Corporate (74) 10 (8) (72) 2 (70) (33) 5 (15) (113)
Continuing operations 560 15 (226) 349 425 774 (399) 7 (11) 10 5 (15) 371
Discontinued operation 28 (46) (18) (18) (10) (28)
Group 588 15 (272) 331 425 756 (409) 7 (11) 10 5 (15) 343
18
Fletcher Building Limited Annual Report 2025
Notes to the Consolidated Financial Statements 2025 (Continued)
CONTENTS
Industry segments: Balance sheet
2025
NZ$M
Net
working
capital
Property, plant
and equipment
and investment
property
Indefinite
life
intangible
assets
Other
intangible
assets
Investments
& Retirement
plan assets
Right-of-use
lease asset
Deferred
tax liability
– brands
Derivatives
for foreign
currency
hedging
Current tax
balances
Invested
Capital
Right-of-
use lease
liability
Deferred tax
balances (excl.
deferred tax on
brands)Net debt
Funds /
Group
Equity
Building Products 222 885 168 9 80 352 (9) 1,707 (413) 1,294
Distribution 167 68 57 8 328 628 (373) 255
Concrete 108 670 52 5 20 149 1,004 (179) 825
Australia 99 456 332 3 95 252 (49) 1,188 (319) 869
Materials and distribution 596 2,079 609 25 195 1,081 (58) 4,527 (1,284)
3,243
Residential and
Development
719 129 10 858 (11) 847
Construction (13) 126 47 13 23 112 (5) 303 (126) 177
Corporate and other (95) 15 9 150 43 (8) 29 143 (76) 272 (999) (660)
Continuing operations 1,207 2,349 656 47 368 1,246 (63) (8) 29 5,831 (1,497) 272 (999) 3,607
Discontinued operation
Group 1,207 2,349 656 47 368 1,246 (63) (8) 29 5,831 (1,497) 272 (999) 3,607
2024
NZ$M
Net
working
capital
Property, plant
and equipment
and investment
property
Indefinite
life
intangible
assets
Other
intangible
assets
Investments
& Retirement
plan assets
Right-of-use
lease asset
Deferred
tax liability
– brands
Derivatives
for foreign
currency
hedging
Current tax
balances
Invested
Capital
Right-of-
use lease
liability
Deferred tax
balances (excl.
deferred tax on
brands)Net debt
Funds /
Group
Equity
Building Products 209 818 244 10 82 315 (8) 1,670 (357) 1,313
Distribution 164 107 71 11 318 (4) 667 (362) 305
Concrete 103 654 82 6 20 136 1,001 (165) 836
Australia 250 471 433 3 95 208 (51) 1,409 (283) 1,126
Materials and distribution 726 2,050 830 30 197 977 (63) 4,747 (1,167) 3,580
Residential and
Development
731 112 11 854 (13) 841
Construction (85) 137 65 19 24 107 (6) 261 (123) 138
Corporate and other (78) 18 108 152 100 5 28 333 (137) 206 (1,766) (1,364)
Continuing operations 1,294 2,317 895 157 373 1,195 (69) 5 28 6,195 (1,440) 206 (1,766) 3,195
Discontinued operation 113 31 11 102 257 (139) 15 133
Group 1,407 2,348 895 168 373 1,297 (69) 5 28 6,452 (1,579) 221 (1,766) 3,328
19
Fletcher Building Limited Annual Report 2025
Notes to the Consolidated Financial Statements 2025 (Continued)
CONTENTS
Geographic segments
2025
NZ$MExternal revenue
EBIT before
Significant ItemsFunds*Non-current assets +
New Zealand 5,154 292 3,502 3,955
Australia 1,997 97 836 1,143
Other* 45 1 (731) 2
Group 7,196 390 3,607 5,100
2024
NZ$MExternal revenue
EBIT before
Significant ItemsFunds*Non-current assets +
New Zealand 5,602 383 3,613 4,137
Australia 2,702 132 1,229 1,212
Other* 137 1 (1,514) 3
Group 8,441 516 3,328 5,352
* Funds “other” includes net debt and taxation.
+ Non-current assets exclude deferred tax assets, retirement plan surplus and financial instruments.
Net earnings per share before Significant Items
Earnings per share is disclosed in full in note 5. The below disclosure has been included to provide additional useful information by
removing the impact of Significant Items in the current and prior year, and the resulting impact on the earnings per share measure.
The effect of Significant Items on earnings from continuing operations per share is as follows:
2025
NZ$M
2024
NZ$M
Net losses after taxation from continuing operations
(as per Consolidated Income Statement)
(367) (86)
Add back: Significant Items before taxation (note 2.2)
644333
Less: tax benefit on Significant Items (note 26)
(125)(64)
Net earnings from continuing operations before Significant Items152 183
Net earnings per share from continuing operations before Significant Items (cents)15.0 22.3
Net losses per share (cents) from continuing operations
– as reported per Consolidated Income Statement
(36.2)(10.5)
20
Fletcher Building Limited Annual Report 2025
Notes to the Consolidated Financial Statements 2025 (Continued)
CONTENTS
2.3 INTANGIBLE ASSET IMPAIRMENT TESTING
Goodwill and intangible assets with indefinite useful lives
The Group tests indefinite life intangible assets, including goodwill and brands, for impairment on an annual basis. Each cash
generating unit (CGU) to which goodwill is allocated is valued using a discounted cash flow model. This is representative of the
higher of fair value less costs to dispose and value-in-use.
Management has used its past experience of revenue growth, operating costs and margin, and external sources of information
where appropriate, to determine cash flow projections for the future. These cash flow projections are principally based on
the business units’ forecast five-year plan, which are risk adjusted where appropriate. Cash flows beyond five years have been
extrapolated using estimated terminal growth rates, which do not exceed the long-term average growth rate for the industries
and countries in which the business units operate. Cash flows are discounted using a nominal rate specific to each business
and jurisdiction.
The Group performs its annual impairment assessment and considers indicators of impairment at each reporting date. This includes
the relationship between the Group’s market capitalisation and its book value, among other factors. During the year, the Group
operated under challenging economic conditions across New Zealand and Australia, including subdued construction activity,
inflationary cost pressures and ongoing market uncertainty. These factors impacted demand, margin recovery and earnings visibility
across several businesses.
The updated assessment reflects a materially weaker underlying activity and earnings outlook for most business units over the
next five years. Twelve months ago, market sentiment anticipated a difficult first half for FY25 followed by a gradual improvement
through year end and steady growth thereafter. In practice, activity levels in New Zealand and Australia were lower than expected,
tender and development pipelines thinned, and leading indicators now point to a slower-than-expected recovery in housing
and construction.
Across core end-markets, new-build residential remains subdued amid affordability and financing constraints; alterations and
additions have been more resilient but are not offsetting weakness in new housing; non-residential work is patchy, with longer
decision cycles, deferrals and increased competitive intensity compressing margins; and infrastructure and civil work remains
strategic but with increased timing risk, creating greater near-term delivery uncertainty.
Against this backdrop, the Group undertook its annual impairment assessment alongside a broader review of its portfolio and
market positioning, including an evaluation of the strategic fit and long-term viability of business units, with a view to simplifying
the portfolio and improving returns. Impairment testing was carried out for all cash-generating units (CGUs) with goodwill and
other intangible assets with indefinite useful lives, using value-in-use models based on Board-approved budgets and forecasts.
Recoverable amounts also referenced fair value less costs of disposal, informed by portfolio review considerations. In addition,
higher weighted average cost of capital (WACC) rates than in prior years were applied, aligned to portfolio review benchmarking
and reflecting increased risk and uncertainty in forecast cash flows.
While most Group businesses are expected to recover under more normal trading conditions and return to “no-impairment”
EBIT levels over time - consistent with historic performance - the review identified a subset where risks are more acute. Iplex®
New Zealand, Humes®, Stramit®, Oliveri® and Mico® have market shares significantly below historic levels and have underperformed
in recent years. Management has initiated actions and growth plans to improve profitability for these businesses; however, given
the current market context and competitive pressures, growing market share and maintaining or expanding gross margins and
profitability will be challenging. The Construction Fiji joint venture (50% interest) significantly underperformed during the year and
had a less certain pipeline in addition to the challenges in key relationships identified at year end. Waipapa Pine’s EBIT was below
both budget and breakeven levels in FY25; however, production and sales volumes were ahead of the original acquisition business
case assumptions, with underperformance principally driven by below-median log pricing - to which the impairment model is
most sensitive.
As at 30 June 2025, Iplex® New Zealand, Oliveri®, Stramit®, Mico® and Humes® were assessed as requiring impairment following
sustained underperformance and ongoing sensitivity to market and operational assumptions. As a result, the Group recognised
non-cash impairments relating to goodwill and brand intangibles in these businesses. These charges reflect the challenging trading
conditions, execution risks associated with ongoing turnaround initiatives and reduced near-term earnings visibility. The Group’s
50% interest in the Construction Fiji joint venture was also fully impaired with the uncertainty in the project pipeline in the region
and key relationships.
In addition, Stramit®, Humes® and Waipapa Pine have been added to the Group’s impairment watchlist, joining Higgins® New
Zealand and Iplex® New Zealand, as these businesses continue to have a heightened risk of material impairment due to their
sensitivity to changes in operating assumptions.
New Zealand CGUs
The goodwill and brand balances for fifteen New Zealand CGUs represent 49% of the Group (2024: 50%). Discount rates between
10.5% and 12.1% (2024: between 8.5% and 10.8%) have been used for New Zealand business units, reflecting the risk profile and the
regions in which they operate. An average annual growth rate of (0.32)% (2024: 2.8%) has been used over the five-year forecast period
for New Zealand business units, based on past performance and management’s expectations of market development. The terminal
growth rate employed for New Zealand businesses was 2.0% (2024: 2.0%).
21
Fletcher Building Limited Annual Report 2025
Notes to the Consolidated Financial Statements 2025 (Continued)
CONTENTS
Australian CGUs
The goodwill and brand balances for two Australian CGUs represent 51% of the Group (2024: 50%). A discount rate of 9.8% (2024: 7.6%)
has been used for Australian business units, reflecting the risk profile and the regions in which they operate. An average annual growth
rate of 1.88% (2024: 4.2%) has been used over the five-year forecast period for Australian business units, based on past performance
and management’s expectations of market development. The terminal growth rate employed for Australian businesses was 2.5%
(2024: 2.5%).
Sensitivity to reasonably possible changes in assumptions
The following table sets out the goodwill and brands balance for those CGUs, where a reasonably possible change in key assumptions
could result in impairment:
2025
Higgins®
New Zealand
NZ$M
Iplex®
New Zealand
NZ$M
Stramit®
Australia
NZ$M
Waipapa Pine
New Zealand
NZ$M
Humes®
New Zealand
NZ$M
Goodwill2437145219
Brands19741
Higgins® New Zealand
Key AssumptionsValue attributed
Revenue growth (5-year Cumulative Average Growth Rate (CAGR))4.80%
EBIT margin (5-year average)3.92%
Discount rate12.10%
Group and divisional management have continued the execution of a multi-year transformation strategy across Higgins® New Zealand,
aimed at strengthening its core operations and returning the business to sustainable profitability. Key initiatives include restructuring
the project portfolio, investing in asphalt and bitumen infrastructure, and refreshing leadership and cost controls. These measures,
supported by a higher-quality order book focused on alliance and cost-plus maintenance contracts, are designed to drive long-term
margin uplift and improve capital efficiency. A terminal growth rate of 2.0% (2024: 2.0%) and a post-tax discount rate of 12.10% (2024:
10.80%) were applied. The CGU remains sensitive to assumptions around price recovery, capacity uplift and internal demand synergies.
In the financial year 2025, Higgins® New Zealand delivered improved operational performance, underpinned by renewed maintenance
contracts, rate resets on key alliances, disciplined cost control and improved execution across both construction and surfacing
operations. These results mark a meaningful step forward following the challenges of prior years, which included COVID-related
disruptions, legacy project losses and significant impairment and asset write-downs in the last financial year.
Despite this progress, management acknowledges that market and economic uncertainty continue to present risks to near-term
earnings stability. The strategic transformation is ongoing and will take time to fully embed. Performance remains sensitive to
macroeconomic factors, contract pipeline timing and execution of internal supply strategies. In this context, Group management has
assessed the recoverable value of the Higgins® New Zealand CGU using a value-in-use discounted cash flow model as at 30 June 2025.
Impact of possible changes in key assumptions (Higgins® New Zealand)
The recoverable value of Higgins® New Zealand is most sensitive to EBIT margin assumptions. Should the average EBIT margin used
in the value-in-use calculations reduce by 200 basis points from the average of 3.92%, an impairment of goodwill and brands of
approximately $53 million may be required. In contrast, the model is less sensitive to revenue growth and discount rate assumptions.
A 200 basis point change in either the revenue CAGR or the discount rate would not result in any impairment.
Iplex® New Zealand
Key AssumptionsValue attributed
Revenue growth (5-year Cumulative Average Growth Rate (CAGR))5.75%
EBIT margin (5-year average)11.10%
Discount rate10.75%
Iplex® New Zealand has experienced a prolonged period of underperformance, with the most recent earnings being below budget and
breakeven levels. The business has faced declining market conditions, cost inflation and operational disruption. Despite implementing
a strategic reset, the turnaround is in its early stages and execution risk remains present. While the business has achieved year-on-year
volume growth and shown progress in margin recovery, these benefits have not been sufficient to offset market weakness.
The recoverable value of the Iplex® New Zealand CGU of $119 million was assessed using a value-in-use discounted cash flow method.
As a result, the Group has recognised a non-cash impairment charge of $68 million, relating to the write-down of the goodwill
intangible asset balance. This valuation is based on a five-year business plan reviewed by the Board, formulated with consideration of
the business's historical performance. A terminal growth rate of 2.0% (2024: 2.0%) and a post-tax discount rate of 10.75% (2024: 9.20%)
were applied. This impairment reflects the sustained underperformance of the CGU, limited visibility on achieving breakeven EBIT and
the significant sensitivity of valuation outcomes to assumptions around price recovery and strategic execution.
22
Fletcher Building Limited Annual Report 2025
Notes to the Consolidated Financial Statements 2025 (Continued)
CONTENTS
While management remains committed to the turnaround plan, the impairment brings the carrying value of the CGU in line with a
more supportable outlook based on current market and operating conditions. Iplex® New Zealand remains on the Group’s impairment
watchlist as at 30 June 2025.
Impact of possible changes in key assumptions (Iplex® New Zealand)
The recoverable amount of Iplex® New Zealand is most sensitive to EBIT margin and discount rate assumptions. A 200 basis
point reduction in the average EBIT margin used in the value-in-use model would result in an additional goodwill impairment of
approximately $22 million. Similarly, increasing the discount rate by 200 basis points would also trigger an impairment of around
$22 million. In contrast, the model is less sensitive to revenue growth assumptions. A 200 basis point reduction in the assumed
revenue CAGR would result in an additional impairment of approximately $12 million, also applied to goodwill.
Oliveri®
Key AssumptionsValue attributed
Revenue growth (5-year Cumulative Average Growth Rate (CAGR))5.86%
EBIT margin (5-year average)8.68%
Discount rate9.80%
Oliveri® has faced significant trading headwinds over the past 12 to 24 months, which were compounded by operational disruption
linked to the exit from the Tradelink® business and the underperformance of its New Zealand expansion. These factors have resulted in
a marked decline in earnings and reduced Oliveri®’s ability to recover its cost base, despite targeted cost-saving initiatives and growth
strategies. While a number of strategic initiatives are underway, including onboarding new sales channels, rationalising inventory and
restructuring of its administrative cost base, these have yet to deliver the uplift required to support the business’s carrying value.
The recoverable value of the Oliveri® CGU of NZ$28 million (A$26 million) was assessed using a value-in-use discounted cash flow
method. As a result, the Group has recognised a non-cash impairment charge of NZ$49 million (A$44 million), relating to the write-
down of the goodwill and brand intangibles. This valuation is based on a five-year business plan reviewed by the Board, formulated
with consideration of the company’s historical performance. A terminal growth rate of 2.5% (2024: 2.5%) and a post-tax discount rate of
9.80% (2024: 8.10%) were applied. This impairment reflects the sustained underperformance of the CGU, limited visibility on achieving
breakeven EBIT and the significant sensitivity of valuation outcomes to assumptions around price recovery and strategic execution.
While management remains committed to the turnaround plan, the impairment brings the carrying value of the CGU in line with
a more supportable outlook based on current market and operating conditions.
Impact of possible changes in key assumptions (Oliveri®)
Following the impairment recognised as at 30 June 2025, the remaining carrying value of Oliveri®’s net assets is significantly lower,
which reduces the further potential downside of sensitivity of the model to changes in key assumptions. A 100 basis point change
in the EBIT margin, revenue CAGR or discount rate assumptions would each result in an additional impairment of approximately $4
million, applied against the business’s fixed assets.
Stramit®
Key AssumptionsValue attributed
Revenue growth (5-year Cumulative Average Growth Rate (CAGR))7.08%
EBIT margin (5-year average)2.22%
Discount rate9.80%
Stramit® has experienced sustained underperformance over the past two years, with results having been affected by soft residential
demand, adverse weather, service challenges and supplier disruptions, all contributing to reduced volumes and market share. Despite
cost reductions, this year’s earnings fell short of budget and current forecasts are below previously assumed growth assumptions. The
business has initiated a transformation program targeting service improvement, productivity and expansion in sheds and roller doors,
supported by capital investment. However, these initiatives are still in early stages and benefits have yet to materially offset the high
fixed cost base. The updated impairment assessment reflects a weaker long-term outlook.
The recoverable value of the Stramit® CGU (NZ$90 million; A$83 million) was assessed using a value-in-use discounted cash
flow method. An impairment of $47 million (A$44 million) was recognised for Stramit® in the year to align its carrying value with
recoverable amount, relating to the partial write-down of the goodwill intangible asset balance. This valuation is based on a five-year
business plan reviewed by the Board, formulated with consideration of the company’s historical performance. A terminal growth rate
of 2.5% (2024: 2.5%) and a post-tax discount rate of 9.80% (2024: 8.10%) were applied.
While management remains committed to delivering the turnaround, including integrating Stramit® into the newly formed Heavy
Building Materials division to capture operational and procurement synergies, earnings visibility remains limited. Given the expected
continuation of below-breakeven EBIT into FY26 and the uncertain market outlook, Stramit® has been placed on the Group’s
impairment watchlist as at 30 June 2025.
23
Fletcher Building Limited Annual Report 2025
Notes to the Consolidated Financial Statements 2025 (Continued)
CONTENTS
Impact of possible changes in key assumptions (Stramit®)
The recoverable value of Stramit® is most sensitive to its ability to deliver improved EBIT margins. A 100 basis point reduction
in the average EBIT margin used in the value-in-use calculations would imply an additional impairment of approximately $81
million (A$74 million), applied across goodwill, brand, fixed assets and right-of-use assets. The model is less sensitive to other key
assumptions. A 100 basis point reduction in the revenue CAGR would result in an additional impairment of approximately $22 million
applied against goodwill, brand, fixed and intangible assets, while a 100 basis point increase in the discount rate would imply an
additional impairment of approximately $15 million, applied against the goodwill and brand balances.
Waipapa Pine
Key AssumptionsValue attributed
Revenue growth (5-year Cumulative Average Growth Rate (CAGR))16.30%
EBIT margin (5-year average)15.60%
Discount rate10.80%
Waipapa Pine has underperformed relative to expectations since its acquisition in the 2023, with earnings below budget and
breakeven levels. The business has faced significant timber price deflation, subdued residential construction activity and slower-than-
anticipated scaling of its operating shift pattern. Despite these challenges, Waipapa Pine has achieved volume growth, increased
market share and operational improvements that position it for future recovery. A strategic reset is underway, including preparation
for the transition to a double-shift model in FY28.
No impairment has been recognised, although valuation headroom remains limited. This valuation is based on a five-year business
plan reviewed by the Board, formulated with consideration of performance since acquisition and external market forecasts. A terminal
growth rate of 2.0% (2024: 2.0%) and a post-tax discount rate of 10.80% (2024: 9.20%) were applied. The CGU remains sensitive to
assumptions around price recovery, capacity uplift and internal demand synergies.
While management remains committed to delivering its growth strategy and capital programme, the valuation of the CGU is
contingent on execution of these initiatives and recovery of the log prices to the median levels. Waipapa Pine has been placed on the
Group’s impairment watchlist as at 30 June 2025.
Impact of possible changes in key assumptions (Waipapa Pine)
The recoverable value of Waipapa remains sensitive to log prices, which directly influences EBIT margin assumptions. Should
the average EBIT margin over the forecast period reduce to 10%, this would result in an impairment of approximately $49 million,
applied against goodwill. A reduction in the revenue CAGR to 10% would imply an impairment of approximately $28 million against
the carrying amount of goodwill. A 100 basis point increase in the discount rate would result in an impairment of approximately
$14 million, also recognised against goodwill.
Humes®
Key AssumptionsValue attributed
Revenue growth (5-year Cumulative Average Growth Rate (CAGR))6.64%
EBIT margin (5-year average)5.53%
Discount rate10.60%
Humes® underperformed in FY25, with earnings impacted by weaker demand in key markets, where delays in large projects and
subdivision activity affected volumes in high margin concrete and precast segments. Despite effective cost control and increased
market share, the business fell short of budget and current forecasts reflect a softer outlook than previously assumed. Humes® is
progressing a strategy focused on network expansion, manufacturing optimisation and renewed sales capability, supported by
targeted capital investment. However, these initiatives are in early stages and forecast improvements remain modest in the near term.
The updated impairment assessment reflects a more cautious long-term view.
The recoverable amount of the Humes® CGU was assessed at $103 million using a value-in-use discounted cash flow model. This
reflected updated Board-approved forecasts and a weaker long-term market outlook. An impairment of $30 million was recognised
in FY25 against the carrying amount of goodwill. The valuation was based on a five-year business plan incorporating revised growth
assumptions, subdued near-term activity and updated external market inputs. A terminal growth rate of 2.0% (2024: 2.0%) and a
post-tax discount rate of 10.60% (2024: 9.20%) were applied. The CGU remains sensitive to assumptions around volume recovery,
margin improvement and execution of strategic initiatives.
While management remains committed to delivering its growth strategy and capital programme, the valuation supportability of the
CGU is contingent on execution of these initiatives. Humes® has been placed on the Group’s impairment watchlist as at 30 June 2025.
Impact of possible changes in key assumptions (Humes®)
The recoverable value of Humes® remains most sensitive to its ability to deliver improved EBIT margins. A 100 basis point reduction
in the average EBIT margin used in the value-in-use calculations would result in an additional impairment of approximately $21 million,
applied against the carrying amount of goodwill. The model is less sensitive to other key assumptions. A 100 basis point reduction in
the revenue CAGR would imply an additional impairment of approximately $10 million, while a 100 basis point increase in the discount
rate would result in an additional impairment of approximately $13 million.
24
Fletcher Building Limited Annual Report 2025
Notes to the Consolidated Financial Statements 2025 (Continued)
CONTENTS
Mico®
Key AssumptionsValue attributed
Revenue growth (5-year Cumulative Average Growth Rate (CAGR))2.43%
EBIT margin (5-year average)1.72%
Discount rate10.35%
Mico® was impacted by weaker market conditions and ongoing cost pressures during FY25, which reduced the business’s earnings
outlook and constrained its ability to support existing asset values. An impairment of $14 million was recognised for Mico® in the year,
fully writing down the remaining brand balances.
Impact of possible changes in key assumptions (Mico®)
If the revenue CAGR assumption used in the value-in-use calculation had been 100 basis points lower than management’s estimate as
at 30 June 2025, this would imply an additional impairment of $9 million against the carrying amount of fixed and right-of-use assets.
A 100 basis point reduction in the five-year average EBIT margin would imply an additional impairment of $30 million against the
carrying amount of fixed and right-of-use assets. If the discount rate applied to the cash flow projections had been 100 basis points
higher than management’s estimate, this would imply an additional impairment of $6 million against the carrying amount of fixed and
right-of-use assets.
25
Fletcher Building Limited Annual Report 2025
Notes to the Consolidated Financial Statements 2025 (Continued)
CONTENTS
2.4 DISCONTINUED OPERATIONS AND ASSETS HELD FOR SALE
The Group classifies non-current assets and disposal groups as held for sale if their carrying amounts will be recovered principally
through a sale transaction rather than through continuing use. Non-current assets and disposal groups classified as held for sale
are measured at the lower of their carrying amount and fair value less costs to sell. Costs to sell are the incremental costs directly
attributable to the disposal of an asset (disposal group), excluding finance costs and income tax expense.
The criteria for held for sale classification is regarded as met only when the sale is highly probable, and the asset or disposal group
is available for immediate sale in its present condition.
Property, plant and equipment, intangible assets and right-of-use assets are not depreciated or amortised once classified as held for
sale. Assets and liabilities classified as held for sale are presented separately as current items in the Consolidated Balance Sheet.
Discontinued operations are reported when a component of the Group has been disposed of or is classified as held for sale,
and represents a separate major line of business or geographical area of operations. The results of discontinued operations
are presented separately in the Consolidated Income Statement as a single amount comprising the post-tax profit or loss of
discontinued operations and the post-tax gain or loss recognised on the disposal or remeasurement to fair value less costs to
sell. Comparative information in the Consolidated Income Statement is represented to reflect the classification of operations as
discontinued from the start of the earliest period presented.
On 14 February 2024 the Group announced its intention to divest the Tradelink® business and initiated an active programme to locate
a buyer. The associated assets and liabilities were consequently presented as held for sale from 1 April 2024 when the criteria to be
classified as held for sale were met, with Tradelink® being classified as a discontinued operation. Tradelink® was sold on 30 September
2024 with effect from 1 October 2024.
Financial performance and cash flow information of Tradelink®, represented as a discontinued operation
The financial performance and cash flow information presented for the year ended 30 June 2025 include the results from 1 July 2024
and up to the date of disposal of 30 September 2024.
2025
NZ$M
2024
NZ$M
Revenue202 758
Cost of goods sold(145)(529)
Gross margin57 229
Warehouse, distribution, selling, general and administration expenses(51)(222)
Significant Items(58)(155)
Losses before interest and taxation (EBIT)(52)(148)
Lease interest expense(2)(7)
Income tax benefit2 14
Net losses from discontinued operation net of tax(52)(141)
Other Comprehensive Income - reclassification of foreign currency
translation reserve on disposal
53
Total comprehensive income/(loss) from discontinued operation1 (141)
20252024
Net losses per share from discontinued operation (cents)
Basic (5.2) (17.2)
Diluted (5.2) (17.2)
2025
NZ$M
2024
NZ$M
(1)
Net cash (outflow)/inflow from operating activities(7)28
Net cash outflow from investing activities(2)(10)
Net cash outflow from financing activities*(12)(46)
Net decrease in cash generated by the subsidiary(21)(28)
* Excludes the benefit of intercompany funding.
(1) Restated for change in policy in presentation of cash flows. Refer to note 2.1.
26
Fletcher Building Limited Annual Report 2025
Notes to the Consolidated Financial Statements 2025 (Continued)
CONTENTS
Details of the sale of Tradelink® business
30 September 2024
NZ$M
Consideration received or receivable186
Separation and transaction costs(33)
Total disposal consideration153
Carrying amount of net assets sold (158)
Loss on disposal before reclassification of foreign currency translation reserve (5)
Reclassification of foreign currency translation reserve (53)
Loss on disposal(58)
The consideration payable by the acquirer is the aggregate of the completion payment ($175 million) and the milestone payment
($11 million). The milestone amounts are payable upon delivery of transitional services by the Group to the acquirer, expected to occur
over a period of up to 24 months from completion. Obligation to deliver separation infrastructure has been recognised in "Other
provisions" (see note 11). The loss of $58 million is presented as a Significant Item from discontinued operation.
The final loss on disposal remains uncertain due to an ongoing dispute between the Group and MML Holdings (the buyer) regarding
the completion statements. On 22 May 2025, MML Holdings initiated proceedings in the Supreme Court of NSW against Crane Group
Pty Ltd (as vendor) and Fletcher Building (Australia) Pty Ltd (as guarantor), which the Group has good grounds to defend. Depending
on the outcome, through proceedings or otherwise, further losses may arise, and any adjustments will be recognised in the period in
which the final amount is determined.
The carrying amounts of assets and liabilities as at the date of sale
30 September 2024
NZ$M
Cash4
Property, plant and equipment29
Intangible assets12
Tax asset15
Right-of-use assets105
Debtors110
Inventories160
Total assets435
Creditors, accruals and other liabilities126
Lease liabilities132
Provisions19
Total liabilities277
Net assets
158
Other disposals
On 31 July 2024, following receipt of regulatory approvals, the Group successfully completed the transaction to divest 50% of its Fiji
construction business. The transaction originally valued the Fiji business, comprising Fletcher Construction and Higgins® branded
operations, at NZ$42 million, with NZ$21 million received for the sale of the 50% stake in the business, and 50% retained by the Group
to be accounted for as an equity-accounted investment going forward. Working capital adjustments resulted in net proceeds of $13
million being received and a loss on disposal of $2 million being recognised. The Fiji construction business sold was not classified as
a discontinued operation for reporting purposes. In addition, New Zealand Ceiling and Drywall (NZCDS) was disposed by the Group in
March 2025.
27
Fletcher Building Limited Annual Report 2025
Notes to the Consolidated Financial Statements 2025 (Continued)
CONTENTS
3. CONSTRUCTION ACCOUNTING
The Group’s Construction division is engaged with a wide variety of customers to construct and maintain building and infrastructure
projects across New Zealand and the South Pacific. Services provided by the division include construction contract works, engineering
and maintenance services. Each project has a different risk profile based on its individual contractual and delivery characteristics. The
Group’s policies for accounting for such projects are outlined below, including related estimate and judgements made by management
that have the most significant effect on the carrying value of assets and liabilities of the Group as at 30 June 2025.
Estimates and judgements are made relating to a number of factors when accounting for construction contracts. On the income
side, these include estimates and judgements made on variations to consideration which typically include variations due to changes
in scope of work, recoveries of claim income or bonus elements from customers, and potential liquidated damages or penalties that
may be levied by customers. On the cost side, these include estimates and judgements related to the assessment of future costs
after considering; the programme of work throughout the contract, any changes in the scope of work, any maintenance and defect
liabilities, expected inflation (for unlet sub-trades), and the recovery of any cost through insurance claims. For cost reimbursable
contracts where the Group is the principal in the arrangement, there are also estimates required on the level of disallowable costs
which require an assessment of whether costs are recoverable under the terms of the contract and therefore should be recognised
as income. Estimates of the final outcome of each contract may include cost contingencies to take account of specific risks within
each contract that have been identified.
Construction projects are inherently more uncertain earlier in their lifetime, which leads to a number of significant estimates
and judgements being made at these early stages. Construction divisional management perform regular reviews of their project
positions including reassessment of costs to complete estimates, including any cost contingencies and estimated recoverability of
any variations at each reporting date. Significant estimates and judgements are reviewed on a regular basis throughout the contract
life and are adjusted where appropriate. However, the nature of the risks on contracts is such that they often cannot be resolved
until the project has been completed.
The significant judgements inherent in accounting for the Group’s most material construction projects are:
−The extent to which a project progresses in line with the complex project programme and timetable previously formed and the
resulting impact of any programme delays or gains on project costs, especially project overheads (preliminary and general costs)
and any liquidated or other damages or penalties;
−Sub-contractor costs, in particular costs that are yet to be agreed in scope or price (including inflationary pressures) or cost
increases that may arise due to programme prolongation;
−Recovery of any insurance claims;
−The outcome of ongoing commercial negotiations, including elements of variable consideration and changes in project scope
with customers; and
−Future weather and ground conditions.
The Group’s Construction division has a diverse portfolio of long-term construction contracts. The nature and complexity of these
contracts mean the outcome can be subject to a significant level of estimation uncertainty, particularly in relation to the likelihood
and quantum of any variation claims receivable, as well as the quantification and assessment of any other claims/counterclaims that
may exist. Actual outcomes could be different from estimated amounts which may impact projected positions recognised.
Construction accounting policies
Revenue recognition
Construction contract revenue
The Group derives revenue from the construction of building and infrastructure projects across New Zealand and the South Pacific.
Contracts entered into may be for the construction of one or several separate inter-linked pieces of large infrastructure. While it is
uncommon, contracts can be entered into for the delivery of several projects. Where this occurs, management determine whether
a single or multiple performance obligations exist, and allocate the total contract price across each performance obligation based
on the relative stand-alone selling prices. The nature of construction projects ordinarily leads to variations in the project size and
scope over time, it is also normal practice for contracts to include bonus and penalty elements based on timely construction or
other performance criteria, recognised as variable consideration.
Generally, contracts identify various inter-linked activities required in the construction process and the performance obligation
is fulfilled over time and as such revenue is recognised over time. Revenue is invoiced based on the measured output of each
process based on appraisals that are agreed with the customer on a regular basis, with the Group’s right to payment occurring
on a performance to date basis also.
Revenue on construction contracts (including sub-contracts) is determined using the percentage of completion method and
represents the value of work carried out during the period, including amounts not invoiced. Costs are recognised as incurred
and revenue is recognised on the basis of the proportion of total costs at the reporting date to the estimated total costs of the
contract. Margin on a contract is not recognised until the outcome of the contract can be reliably estimated. Management use their
professional judgement to assess both the timing of physical completion of the project and the risks associated with the forecasted
financial result of the contract as part of this determination.
28
Fletcher Building Limited Annual Report 2025
Notes to the Consolidated Financial Statements 2025 (Continued)
CONTENTS
Maintenance contract revenue
Services revenue is primarily generated from maintenance services supplied to roading assets owned by local or central
Government in New Zealand and the South Pacific. This revenue also arises in respect of infrastructure assets previously constructed
by the Group where maintenance was included in the contract. The service contracts are typically determined to have one single
performance obligation which is significantly integrated and is fulfilled over time.
Variable consideration
Revenue in relation to variations, such as a change in the scope of the contract, is only included in the contract price when it is
approved by the parties to the contract, the variation is enforceable, or in certain circumstances when it is highly probable that
a significant reversal of revenue recognised will not occur and is approved by the Board of Directors.
Revenue backlog
Revenue backlog, as disclosed below, refers to the level of construction work the Group is contracted to but is not yet complete as
at period end. This represents the performance obligations that are yet to be completed for the construction contracts active as at
30 June 2025. The long-term nature of the contracts held by the Buildings, Infrastructure, Brian Perry Civil® and Higgins® businesses
will see these performance obligations completed over a period generally between one to five years, although some may extend longer.
30 June 202530 June 2024
Revenue backlog
by business units
Current Revenue Backlog
NZ$M
Top 5 projects as a %
of Revenue Backlog
Current Revenue Backlog
NZ$M
Top 5 projects as a %
of Revenue Backlog
Buildings18100%104100%
Infrastructure625100%30598%
Brian Perry Civil®26368%39567%
Higgins®69451%1,00648%
South Pacific8100%3599%
1,608NA1,845NA
Contract assets, contract liabilities and provisions for onerous contracts
Contract assets/liabilities are usually stated at cost-plus profit recognised to date, less progress billings. Costs include all
expenditure directly related to specific projects and an allocation of fixed and variable overheads incurred in the Group’s contract
activities based on normal operating capacity.
Onerous contracts are defined in NZ IAS 37 Provisions; where the unavoidable costs (i.e. the costs that the division cannot avoid
because it has to fulfil the contract) of meeting the obligations under a contract exceed the economic benefits expected to be
received under it. When a contract is identified as onerous (“loss-making”), a provision is made for estimated future losses on the
entire contract. Onerous contract provisions recognised in relation to the Group’s legacy building and infrastructure projects have
been disclosed in note 11.
Contract assets
The gross amount of construction and maintenance work in progress consists of costs attributable to work performed and emerging
profit after providing for any foreseeable losses. In applying the accounting policies on providing for these losses, accounting
judgement is required.
Construction contracts with cost and margin in advance of billings are presented as part of contract assets.
Contract liabilities
Construction contracts where the total progress billings issued to clients (together with foreseeable losses if applicable) on a project
exceed the costs incurred to date plus recognised profit on the contract are recognised as a liability.
2025
NZ$M
2024
NZ$M
Construction contracts with cost and margin in advance of billings50142
Contract assets50142
Construction contracts with billings in advance of cost and margin56166
Contract liabilities56166
29
Fletcher Building Limited Annual Report 2025
Notes to the Consolidated Financial Statements 2025 (Continued)
CONTENTS
Legacy construction projects update
A summary of the major construction projects, including their approximate stage of completion and other relevant information
is disclosed to demonstrate the uncertainty that remains on these projects.
Status of legacy construction projects (> $200 million original contract value) as at 30 June 2025
Business unit
Forecast practical
completion/
handover*
Percentage of
completion 2025
(% cost)
New Zealand International Convention Centre (NZICC) - Fixed price
contract and fire reinstatement
Buildings202599%
Pūhoi to Warkworth - Fixed price contract (Public Private Partnership)Infrastructure202499%
* Calendar year
Pūhoi to Warkworth (P2W)
On the Pūhoi to Warkworth (P2W) motorway project, as announced on 23 June 2025, Fletcher Construction and Acciona,
its 50% partner in the design and construction of the motorway (together, the Construction JV) reached a settlement with the
New Zealand Transport Agency and the Northern Express Group of the Construction JV’s claim related to the impacts and delays
to the project arising from COVID-19 and other weather events. As a result of the settlement, the Group recognised a loss on claims
receivable of $16.4 million, with a corresponding impact to FY25 EBIT before Significant Items as at 30 June 2025. The settlement
has enabled the recovery of $56 million in project-related cash and represents further progress in closing out historical construction
contract exposures.
Separately, the Construction JV has submitted material claims under the contract works insurance for damage to the P2W project
caused by the landslips and weather events during construction. These claims were settled subsequent to year end, consistent with
the amounts recognised as at 30 June 2025. There is also a limited range of less material matters to be resolved in relation to the
project. The resolution of these matters, together with the insurance claims, will determine the final P2W project outcome.
New Zealand International Convention Centre (NZICC)
On the New Zealand International Convention Centre (NZICC) project, good progress was made during the year to 30 June 2025
with building work completed and the focus turning to commissioning, remediating minor defects and securing required Council
sign-offs. Fletcher Construction anticipates handing over the NZICC to SkyCity during the second half of 2025, prior to SkyCity’s
announced opening in February 2026.
On 6 June 2025, SkyCity issued proceedings against Fletcher Construction and the Company over delays in the NZICC project
and associated costs. Fletcher Construction has already paid significant liquidated damages to SkyCity in relation to the delays in
delivering the NZICC, up to the capped amount provided for in the building works contract. Whilst the delivery of the NZICC project
has suffered from a number of challenges, including as a consequence of the fire and Covid-related impacts, Fletcher Construction
rejects absolutely that it has breached the building works contract in the manner alleged by SkyCity and that, accordingly, SkyCity
is not entitled to additional liquidated damages above the capped amount. Fletcher Construction will vigorously defend itself
against the SkyCity claim.
Additionally, as announced on 6 June 2025, the net costs to complete the NZICC project have been reassessed, taking into
account the costs and resources estimated for the project’s final stages. The result is that an additional provision of $15 million was
recognised in the project forecast, which does not allow for any costs associated with the SkyCity proceedings. The assessment of
the net cost to complete the project continues to rely on the application of estimates and judgements (e.g., programme to complete
and cost estimates for certain trades) and, as such, may be subject to change as the project progresses. It is possible that the final
provision could be below or above the levels currently allowed for due to changes in costs to complete.
The Group continues to pursue recoveries under the NZICC Third Party Liability (TPL) insurance policy of more than $100 million and
has brought legal action against the roofing membrane subcontractors in relation to the fire. While the Company considers it has
good grounds to recover material amounts under the TPL policy, it has determined that these proceeds are not yet “virtually certain”
in accordance with NZ IAS 37 Provisions, Contingent Liabilities and Contingent Assets to be recognised. As such, no amount has
been recognised to be recovered under the TPL policy in the project position. The Company will continue to pursue its rights to
recovery under the TPL policy and the Court action, though this is not expected to be settled until calendar year 2026.
Wellington International Airport (WIAL) Carpark
On the Wellington International Airport (WIAL) Carpark project, Fletcher Construction completed a multi-level carpark for WIAL in
October 2018. The client alleged there are a number of defects in the carpark and the adjacent storm water drainage. It is claiming
the cost of remediation and other related losses of approximately $40 million.
As at 30 June 2025, the storm water drainage remediation works were complete and the project was issued a Final Completion
Certificate. Fletcher Construction continues to seek to agree with WIAL a remediation solution to the quality issues alleged by WIAL
and to settle other disputes between them in relation to the project. Alongside commercial discussions, the parties are preparing
for an arbitration to resolve the disputes, which is currently set down to be held during 2026. The second part is expected to cover
WIAL’s concrete cover claim and is scheduled to be heard in September 2026.
30
Fletcher Building Limited Annual Report 2025
Notes to the Consolidated Financial Statements 2025 (Continued)
CONTENTS
Based on Fletcher Construction’s assessment of the estimated remedial costs and expected recoveries, no additional provision
is required to be recognised on this project as at 30 June 2025.
It is possible that the final provision could be below or above the levels currently allowed for and would ultimately depend on the
resolution of the disputes between the parties.
Financial Review
This section explains the results and performance of the Group, including the segmental analysis and earnings per share.
4. REVENUE FROM CONTRACTS WITH CUSTOMERS
The Group revenue is derived from the following streams:
−Sale of building products and materials
−Development and sale of properties
−Construction of building and infrastructure projects (refer to note 3)
−Maintenance service contracts (refer to note 3)
Revenue from contracts with customers is recognised when control of the goods or services is transferred to the customer at
an amount that reflects the consideration to which the Group expects to be entitled in exchange for those goods or services.
The Group has generally concluded that it is the principal in its revenue arrangements, because it typically controls the goods
or services before transferring them to the customer.
Sale of building products and materials
The materials and distribution businesses within the Group recognise revenue when control of the goods has passed to the
customer, the associated costs and possible return of goods can be estimated reliably, there is no continuing management
involvement with the goods, and there is a high probability that a significant reversal in the revenue recognised will not occur.
Revenue is measured net of returns, trade discounts and volume rebates. The timing of the transfer of control varies depending
on the individual terms of the sales agreement. For most sales, this occurs when the product is delivered to the customer.
Development and sale of properties
Through the Residential and Development division the Group derives income from the sale of completed houses and apartments,
and the sale of development sites surplus to Group requirements. Revenue is recognised when control passes to the customer
for each type of transaction. Residential unit sales are commonly recognised at the time of settlement, when title passes to the
customer and payment is received. Land development sales are recognised in line with the requirements of the specific sale and
purchase agreement.
Performance obligations vary between the types of transactions. The sale of a completed house to a customer is a single
performance obligation, as residential units are not constructed under contract from a customer. For development sales, the
division reviews the terms of the sale to determine whether the performance obligations are distinct and separately identifiable.
20252024
NZ$MPoint in timeOver time
Total
revenuePoint in timeOver time
Total
revenue
Sales of building products and
materials
5,041 5,041 5,378 5,378
Development and sale of properties 520 520 739 739
Construction contract revenue 778 778 797 797
Maintenance revenue 655 655 769 769
Total 5,561 1,433 6,994 6,117 1,566 7,683
31
Fletcher Building Limited Annual Report 2025
Notes to the Consolidated Financial Statements 2025 (Continued)
CONTENTS
5. NET EARNINGS PER SHARE
Earnings per share is the portion of a company’s profit allocated to each outstanding ordinary share and is calculated by dividing the
earnings attributable to shareholders by the weighted average of ordinary shares on issue during the year including treasury stock.
Capital notes and options are convertible into the Company’s shares and may therefore result in dilutive securities for purposes of
determining the diluted net earnings per share. The Group may, at its option, purchase or redeem the capital notes for cash at the
principal amount plus any accrued but unpaid interest.
Bonus share
The Group has restated the prior year earnings per share metrics to reflect the slight dilution resulting from the “bonus share” element
of the capital raise completed during the period. The new shares, issued at $2.40 under the share placement, were priced at a
theoretical 17.0% discount to the $2.89 closing price on the NZX on 20 September 2024, before the equity raise was announced. The
additional shares issued due to the discount, compared to the number required without a discount, are considered the “bonus share”
element. The prior year’s comparative weighted average number of ordinary shares of 783 million shares has been adjusted to reflect
these “bonus shares”, equating to 819 million shares. Similarly, the current year’s weighted average number of ordinary shares has
been increased as if these bonus shares had been in place for the entire financial year, rather than just from the date of issue.
20252024
Net losses per share (cents)
Basic (41.4) (27.7)
Diluted (41.4) (27.7)
Net losses per share from continuing operations (cents)
Basic (36.2) (10.5)
Diluted (36.2) (10.5)
NZ$MNZ$M
Numerator
Net losses(419)(227)
Numerator for basic losses per share(419)(227)
Dilutive capital notes
Numerator for diluted net losses per share(419)(227)
Numerator (continuing operations)
Net losses(367)(86)
Numerator for basic losses per share(367)(86)
Dilutive capital notes
Numerator for diluted net losses per share from continuing operations(367)(86)
Denominator (millions of shares)
Weighted average number of shares outstanding1,013 819
Conversion of dilutive capital notes
Denominator for diluted net losses per share1,013 819
32
Fletcher Building Limited Annual Report 2025
Notes to the Consolidated Financial Statements 2025 (Continued)
CONTENTS
6. CONSOLIDATED INCOME STATEMENT DISCLOSURES
The following items are specific disclosures, either required or provided for transparency, and are included within cost of goods sold
and warehouse, distribution, selling, general and administrative expenses, other operating income/(expenses) and other gains/(losses)
from continuing operations (excluding Significant Items) in the Consolidated Income Statement:
2025
NZ$M
2024
NZ$M
Employee related short-term costs
(1)
1,392 1,482
Other long-term employee related benefits 56 51
Depreciation of property, plant & equipment 154 149
Amortisation of intangible assets 17 16
Depreciation of right-of-use assets 189 172
Short-term and low-value lease asset expense 53 57
Repairs and maintenance 161 168
Bad debts written off 4 2
Net periodic pension service cost 2 2
Research and development expenditure 2 3
Donations and sponsorships 3 3
Other operating income/(expenses)
Restructuring costs (6) (16)
Golden Bay MVAC ship breakdown (6)
Other sundry income 6 5
Insurance proceeds - business interruption 9
Other gains/(losses)
Emission trading unit sales 1 6
Net interest income on defined benefit assets 7 6
Loss on disposal of property, plant and equipment (1) (2)
(1) Short-term employee benefits for the executive committee included in the above are disclosed in note 23.
Auditor’s remuneration
2025
NZ$000’s
2024
NZ$000’s
Audit and review of the financial statements
(1)
3,974 4,066
Total audit and assurance services 3,974 4,066
Other services
(2)
176 24
Total non-assurance services 176 24
Total auditor's remuneration 4,150 4,090
(1) The audit includes fees for both the annual audit of the financial statements (including subsidiary level statutory financial statements) and the review of the interim
financial statements.
(2) Other services relate to due diligence support ($128,000), pre-assurance procedures over climate-related disclosures ($25,000), agreed upon procedures ($10,000),
taxation compliance ($8,000) and financial statements presentation services ($5,000) relating to the Group’s Fiji based subsidiaries.
33
Fletcher Building Limited Annual Report 2025
Notes to the Consolidated Financial Statements 2025 (Continued)
CONTENTS
Working Capital Management
This section provides details of the key elements of working capital which include cash, receivables, inventories and
short-term liabilities.
7. CASH AND CASH EQUIVALENTS
Cash and cash equivalents comprise cash and demand deposits with banks that are readily convertible to cash.
Cash and cash equivalents include the Group’s share of amounts held by joint operations of $24 million (2024: $31 million).
At 30 June 2025, approximately $23 million (2024: $42 million) of total cash and deposits were held in subsidiaries that operate in
countries where exchange controls and other legal restrictions apply and are not immediately available for general use by the Group.
2025
NZ$M
2024
NZ$M
Cash and bank balances121 295
Contract retention bank balances18 16
Cash and cash equivalents139 311
Reconciliation of net losses to net cash from operating activities
2025
NZ$M
2024
NZ$M
Net losses(419)(227)
Earnings attributable to minority interest27
(417)(220)
Add/(less) non-operating cash flow items:
Interest expense178 205
Interest income(6)(5)
Add/(less) non-cash items:
Depreciation, depletions and amortisation expenses360 373
Other non-cash items576 429
Taxation(69)25
Net loss on disposal of businesses, property, plant and equipment61 3
1,1001,030
Net working capital movements
Residential and Development(8)67
Construction(95)(346)
Other divisions:
Debtors(7)151
Inventories18 64
Creditors(90)(158)
(182)(222)
Net cash from operating activities501 588
8. DEBTORS
Debtors are amounts due from customers for goods sold or services performed in the ordinary course of business. They are
generally due for settlement within 30 to 90 days and are therefore all classified as current. Debtors are recognised initially at the
amount of consideration that is unconditional, unless they contain significant financing components, when they are recognised at
fair value. The Group holds the trade receivables with the objective of collecting the contractual cash flows and therefore measures
them subsequently at amortised cost using the effective interest method. Details about the Group’s credit risk policies and the
calculation of the loss allowance are provided in note 18.3.
34
Fletcher Building Limited Annual Report 2025
Notes to the Consolidated Financial Statements 2025 (Continued)
CONTENTS
2025
NZ$M
2024
NZ$M
Trade debtors618 636
Contract debtors93 148
Contract retentions29 32
Less: expected credit loss provisions(16)(15)
Trade and contract debtors724 801
Other receivables125 113
849 914
Current642 705
0 – 30 days over standard terms68 80
31 – 60 days over standard terms10 10
61+ days over standard terms20 21
Provision(16)(15)
Trade and contract debtors724 801
Fair value of debtors
Due to the short-term nature of the current receivables, their carrying amount is considered to be the same as their fair value.
Recoverability and risk exposure
Information about the recoverability of trade receivables and the Group’s exposure to foreign currency risk and credit risk can be found
in notes 18.1 and 18.3.
9. INVENTORIES, INCLUDING LAND AND PROPERTY DEVELOPMENTS
Raw materials, stores, work in progress and finished goods
Raw materials, stores, work in progress and finished goods are stated at the lower of cost and net realisable value. Cost comprises
direct materials, direct labour and an appropriate proportion of variable and fixed overhead expenditure, the latter being allocated
on the basis of normal operating capacity. Cost includes the reclassification from equity of any gains or losses on qualifying cash
flow hedges relating to purchases of raw material but excludes borrowing costs. Costs are assigned to individual items of inventory
on a first-in, first-out basis. Costs of purchased inventory are determined after deducting rebates and discounts. Net realisable value
is the estimated selling price in the ordinary course of business less the estimated costs of completion and the estimated costs and
replacement costs in the consumable stores and spares necessary to make the sale.
Property and land inventories
Residential units and freehold land held for resale are stated at the lower of cost and net realisable value. Freehold land under
development comprises land acquisition and development costs as well as any direct or indirectly attributable overheads.
Residential units, both completed and under development, comprise apportioned land costs as well as direct materials, labour
costs, site overheads, associated professional charges and other attributable overheads. Net realisable value represents the
estimated selling prices less all estimated costs of completion and overheads.
2025
NZ$M
2024
NZ$M
Manufacturing, distribution and other inventories
Raw materials178 213
Work in progress18 17
Finished goods584 585
Consumable stores and spare parts59 54
839 869
Inventories held at cost780 814
Inventories held at net realisable value59 55
839 869
35
Fletcher Building Limited Annual Report 2025
Notes to the Consolidated Financial Statements 2025 (Continued)
CONTENTS
2025
NZ$M
2024
NZ$M
Property and land inventories
Freehold land75 69
Freehold land under development541 511
Properties under development315 273
Completed properties135 148
1,066 1,001
All property and land inventories are held at cost.
Total inventories
Current portion1,325 1,276
Non-current portion580 594
1,905 1,870
Inventory classified as non-current
The non-current portion of inventories relates to land and developments that are expected to be held for greater than 12 months.
Land and property commitments
The Group’s Residential and Development division has commitments for the purchase of land and construction services totalling
$236 million (2024: $275 million), of which $93 million is expected to be delivered in the year ending 30 June 2026.
Emissions units
Emissions units held for own use are allocated to the Group under the New Zealand Emissions Trading Scheme (NZ ETS) and used to
settle the Group’s emissions obligation. The units are initially recognised at cost with subsequent reassessment for lower of cost or net
realisable value. Emissions units held by the Group as at 30 June 2025 have been recognised at nil value (2024: nil).
10. CREDITORS, ACCRUALS AND OTHER LIABILITIES
Trade creditors and other liabilities are stated at cost or estimated liability where accrued. Employee entitlements include annual
leave which is recognised on an accrual basis and the liability for long service leave which is measured as the present value of
expected future payments to be made in respect of services provided by employees.
Assumptions in determining long service leave relate to the discount rate, estimates relating to the expected future long service
leave entitlements, future salary increases, attrition rates and mortality.
2025
NZ$M
2024
NZ$M
Trade creditors469 530
Contract retentions20 22
Accrued interest14 20
Other liabilities525 493
Employee entitlements164 200
Workers' compensation schemes10 11
1,202 1,276
Current portion1,171 1,142
Non-current portion31 134
Carrying amount at the end of the year1,202 1,276
The non-current portion of creditors and accruals as at 30 June 2025 primarily relates to long service employee entitlement obligations
and deferred land purchases.
36
Fletcher Building Limited Annual Report 2025
Notes to the Consolidated Financial Statements 2025 (Continued)
CONTENTS
Put option liability
Included in “Other liabilities” is $102 million (2024: $60 million) reflecting put options held by partners in residential developments.
These represent the Group’s contractual obligations to purchase the partners' interests under specified conditions. In accordance with
NZ IAS 32 Financial Instruments: Presentation, these put options are classified as financial liabilities and measured at amortised cost
using the effective interest method. As the risks and rewards of the partnership interests are expected to be retained by the partner,
any subsequent remeasurement of the liability is done through non-controlling interests in reserves.
Deferred land settlement
Included in "Other liabilities" is $142 million (2024: $140 million) of deferred payables for residential land acquisitions contracted
to by the Group.
11. PROVISIONS
Provisions for restructuring, service and environmental warranties and other provisions are recognised when the Group has a
present legal or constructive obligation as a result of past events, it is probable that an outflow of resources will be required to settle
the obligation, and the amount can be reliably estimated. Provisions are not recognised for future operating losses other than losses
recognised on onerous contracts. Where there are a number of similar obligations, the likelihood that an outflow will be required in
settlement is determined by considering the class of obligations as a whole. A provision is recognised even if the likelihood of an
outflow with respect to any one item included in the same class of obligations may be small.
Provisions are measured at the present value of management’s best estimate at the end of the reporting period of the expenditure
required to settle the present obligation. The discount rate used to determine the present value is a pre-tax rate that reflects current
market assessments of the time value of money and the risks specific to the liability. The increase in the provision due to the passage
of time is recognised as an interest expense.
Restructuring
Restructuring provisions are recognised when the Group is demonstrably committed, without realistic possibility of withdrawal,
to a formal detailed plan. Costs relating to ongoing activities are not provided for.
Warranty and environmental
Warranty provisions represent an estimate of potential liability for future rectification work in respect of products sold and services
provided. Environmental provisions represent an estimate for future liabilities relating to environmental obligations.
Onerous contracts
An onerous contract is a contract under which the unavoidable costs (i.e. the costs that the Group cannot avoid because it has
the contract) of meeting the obligations under the contract exceed the economic benefits expected to be received under it. The
unavoidable costs under a contract reflect the least net cost of exiting from the contract, which is the lower of the cost of fulfilling
it and any compensation or penalties arising from failure to fulfil it. The cost of fulfilling a contract comprises the costs that relate
directly to the contract (i.e. both incremental costs and an allocation of costs directly related to contract activities).
Make good
Make good provisions are recognised for obligations to restore leased sites to the original condition. Costs are estimated based
on lease terms, discounted where material, and capitalised into the related asset.
Other
Other provisions relate to miscellaneous matters, across the Group.
37
Fletcher Building Limited Annual Report 2025
Notes to the Consolidated Financial Statements 2025 (Continued)
CONTENTS
2025
Restructuring
NZ$M
Warranty &
environmental
NZ$M
Onerous
contracts
NZ$M
The
Industry
Response
NZ$M
Make
good
NZ$M
Other
NZ$M
Total
NZ$M
Carrying amount at the
beginning of the year
15 18 78 26 62 199
Charged to earnings7 1 37 170 36251
Settled or utilised(9)(7)(78)(14)(3)(19)(130)
Released to earnings(4) (1)(5)
Recognised on balance sheet 26 (1)25
Currency translation1 (2)(1)
10 12 37 154 49 77 339
2024
Carrying amount at the
beginning of the year
11 24 281 25 93 434
Charged to earnings14 6 180 14 214
Settled or utilised(8)(10)(383)(3)(37)(441)
Released to earnings(1)(2)(4)(7)
Recognised on balance sheet4 (2)2
Currency translation/other(1)(2)(3)
15 18 78 26 62 199
2025
NZ$M
2024
NZ$M
Current portion278171
Non-current portion6128
Carrying amount at the end of the year339199
During the year, the Group utilised $9 million (2024: $8 million) in respect of restructuring obligations across various businesses.
The $10 million remaining provision, in relation to restructuring, is expected to be utilised within the next 12 months. Warranty and
environmental provisions are expected to be utilised over the next two years.
Silicosis
Laminex® Australia (together with other engineered stone manufacturers, distributors and fabricators in Australia) is the subject
of a number of silica related personal injury claims in Australia. Laminex® Australia has settled the majority of claims that have
been brought against it to date, and in FY25 Laminex® Australia contributed $0.4 million (2024: $1.3 million) to claim settlements.
Estimating the number and cost of future silica related personal injury claims is subject to uncertainties and assumptions, as further
detailed below. The Group has considered the exposure Laminex® Australia may have for the existing and future claims and, to the
extent it considers appropriate to do so, has provided for them. Based on currently available information, no change in provision
amount is required. While regulators in multiple States are currently seeking a greater contribution from the industry to settlement
amounts than has been the case historically, Laminex® Australia does not accept the basis for seeking greater contribution,
however there is a risk that the proportionate contribution by the industry to settlement amounts may increase in future claims.
Notwithstanding the information obtained from settling claims in recent years, there remains significant uncertainty in relation
to the Group's full exposure to these claims, including:
−the number of workers affected by silicosis as a result of engineered stone provided by manufacturers and fabricators
in Australia;
−the number of claims that may be received and the timing of them;
−the nature of those claims and the amounts sought to be recovered, which vary considerably based on the condition and
circumstances of the injured worker;
−the size of any settlement amounts agreed or damages awarded, particularly given different laws in various States; and
−the degree to which other parties, such as the worker’s employer and other manufacturers, are liable to (and do) contribute
to any amount owed to the worker.
As a result, there remains a risk that, ultimately, the final exposure of Laminex® Australia to these claims will be greater than the
amount currently allowed.
38
Fletcher Building Limited Annual Report 2025
Notes to the Consolidated Financial Statements 2025 (Continued)
CONTENTS
The WA plumbing failures Industry Response
Fletcher Building subsidiary, Iplex® Pipelines Australia (Iplex® Australia) has been addressing claims raised against Iplex® Australia
in respect of a hot and cold water polybutylene pipe product it previously manufactured under the name “Pro-fit”, primarily relating
to plumbing failures impacting some WA homes.
Iplex® Australia started manufacturing Pro-fit with Typlex resin from mid-2017 and those products represented the bulk of sales of
hot and cold water residential pipes after that time. Iplex® Australia ceased the sale of Pro-fit in mid-2022. The Pro-fit product was
sold in other Australian states (outside WA) but it was not sold in New Zealand.
In response to the claims raised, Iplex® Australia established an interim investigation fund in April 2023 to support urgent repairs
and undertake investigations. Comprehensive testing confirmed that the pipes met manufacturing standards. Iplex® Australia also
worked with builders, independent experts and government regulators to assess and determine the root causes.
On 13 November 2024, the Group announced that Iplex® Australia, together with the Western Australian Government and key
industry stakeholders, had finalised the Industry Response (the IR) to address the plumbing failures impacting some WA homes
constructed using Typlex Pro-Fit pipe. Among other matters, the IR provides builders participating in the IR with funding for an
agreed work and remediation programme for affected WA homes. The IR commits Iplex® Australia to fund 80% of the direct costs
incurred by participating builders, with the WA Government contributing 20% up to a capped amount of A$30 million (NZ$33
million). The IR is entered into on a no liability, no admissions basis. All participants in the IR have also agreed to a “no sue” provision
as part of the agreement.
As a result of its entry into of the IR, Iplex® Australia recorded a provision of A$155 million (NZ$170 million) pre-tax for the expected
costs it has agreed and is obligated to incur under the IR, which are classified as a Significant Item. The total provision amount
assumes approximately A$125 million (NZ$138 million) for repair costs (net of the A$30 million contribution receivable from the WA
Government), A$15 million (NZ$16 million) for the installation of leak detector units, and A$15 million (NZ$16 million) for expected
administrative and overhead expenses. These costs are expected to be incurred over at least five years, with higher expenditure
anticipated in the initial stages to address urgent remediation work and establish necessary infrastructure (e.g., leak detectors).
As of 30 June 2025, A$13 million (NZ$14 million) of the total provision amount has been utilised.
The IR was launched in November 2024 and now has 38 participating builders who are undertaking the agreed work and
remediation programme. This includes remedying plumbing failures and associated damage, replacing pipes in ceilings and rooms,
as well as full home pipe replacements (during which the homeowner has the benefit of temporary accommodation where required).
The IR also includes a roll out of leak detector units to affected homes, free of charge. Information from the IR has revealed that, on
average, the cost of leak and damage repairs are reduced where the home has been fitted with a leak detector unit. As at 30 June
2025, 55 homes have been fully remediated, and over 2,000 homes have had leak detector units installed, under the IR.
Costs incurred to date under the IR by Iplex® Australia are in line with the current provision which:
−assumes ~5,300 WA homes will experience one or more plumbing failures over time;
−covers the direct costs of remediation and preventive measures, including leak detector units, pipe repairs, ceiling pipe
replacements, and, for WA homes with extensive failures, a full house re-pipe plus temporary accommodation where required;
−excludes builders’ overheads or management costs or any margin or cost of expenses incurred directly by them in connection
with repairing, rectifying, or remediating any defective workmanship; and
−excludes any legal costs, including litigation defence costs.
While most major builders have agreed to participate in the IR, the Buckeridge Group of Companies (BGC), which is responsible for
constructing ~55% of the affected WA homes, has not joined the IR. The provision includes allowances for homes built by BGC, as
BGC has the option to participate in the IR at any time. BGC has not ruled out joining the IR in the future and Iplex® Australia remains
open to engaging with BGC as to how that could be achieved. To the extent that BGC remains outside the IR, the repair costs and
associated cash flows for Iplex Australia are expected to be proportionally lower. BGC homes are being fitted with leak detectors.
However, BGC remaining outside the IR could increase the liability exposure that may arise due to further disputes and claims from
BGC. See note 25 for further details.
The total estimated cost of the remediation works under the IR remains subject to significant risk and uncertainty. As noted
above, key assumptions underlying the provisioned amount include BGC’s participation in the IR and the number of WA homes
built with Typlex Pro-Fit pipes that are expected to develop leaks over time. In relation to the latter, the number of homes that
have experienced plumbing failures that have been reported via the IR up to 30 June 2025 remains within the number of homes
accommodated by the provision and the number of homes experiencing their first plumbing failure continues to decline over
time. A second assumption is that not all homes that experience one failure will go on to experience subsequent failures. A third
assumption is the cost for remediating each plumbing failure in accordance with the agreed work programme and the timing of
that expenditure. If the actual number of affected homes, the extent of failures or the repair costs (or any revised estimate thereof)
exceeds current estimates (including, for example, if the distribution of repairs skews towards more extensive and expensive
interventions), the provision may be insufficient and need to be increased. While to date these assumptions have been adequately
accommodated within the existing provision, they remain subject to review and change over time.
The provision does not account for any risk from litigation or class action (see note 25 for further details of the existing claims and
class action). There are two claims against Iplex Australia outside the IR relating to the plumbing failures, which seek recovery of a
wide range of damages and losses on behalf of all relevant homeowners and some builders, including the class action. The claims
include: costs of removing, repairing, replacing and disposing of the affected pipe; repair costs and/or possessions damaged by the
affected pipe; reduction in property value, vexation, distress and disappointment. If a current or future claim is successful, it may
have a material adverse impact on the Group.
39
Fletcher Building Limited Annual Report 2025
Notes to the Consolidated Financial Statements 2025 (Continued)
CONTENTS
The IR should operate to some extent as a mitigant of those risks but it does not dispose of them. Further, the IR does not affect the
right of homeowners or others with claims (e.g., home insurers) to take action. Homeowners are entitled to remain in the class action
while also taking up the work programme on offer under the IR. A final outcome of a class action may ultimately replace the IR terms
for the homes of class members and their successors.
The Group will monitor the provision and will reassess its adequacy if and as new and material information becomes available.
Provision for Interim Investigation Fund
Iplex® Australia’s interim investigation fund was closed to new claims on finalisation of the IR. The total amount disbursed under the
fund since its establishment in May 2023 was ~A$17.8 million (NZ$20 million). Of this, A$2.8 million (NZ$3.1 million) was recognised
and classified in FY25 as a Significant Item, given that A$15 million (NZ$16 million) had already been recognised in FY24.
Fletcher Insulation® provision for product claims
Fletcher Insulation® Australia is the subject of claims relating to installed glass wool insulation containing an imported foil. Fletcher
Insulation® Australia is investigating the complaints to ascertain the cause and extent of the issue. Fletcher Building’s New Zealand
insulation business, Comfortech®, did not use the same imported foil. The Group has considered the exposure Fletcher Insulation®
Australia may have for the existing and future claims, with a provision recognised based on the facts and circumstances known at
balance date. Fletcher Insulation® Australia is also assessing potential recoveries from its supplier of the product. There remains
a risk that the Group’s full exposure will be greater than the amount currently allowed.
Long-term Investments
This section details the long-term assets of the Group including property, plant and equipment, investment property, intangible assets
and leases.
12. PROPERTY, PLANT AND EQUIPMENT
Land, buildings, plant and machinery and fixtures and fittings are stated at historical cost less depreciation. Historical cost includes
expenditure that is directly attributable to the acquisition of the items. The cost of purchasing land, buildings, plant and machinery,
fixtures and equipment is the value of the consideration given to acquire the assets and the value of other directly attributable
costs which have been incurred in bringing the assets to the location and the condition necessary for their intended service,
including subsequent expenditure. To the extent acquisition, development and construction of capital projects extend over a
period of 12 months, attributable borrowing costs are capitalised as part of the cost of the asset while the asset is being developed
or constructed. On completion of development, all assets included in assets under construction are reclassified appropriately into
the relevant categories of property, plant and equipment.
Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only when it is
probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured
reliably. The carrying amount of any component accounted for as a separate asset is derecognised when replaced. All other repairs
and maintenance are charged to the Consolidated Income Statement during the reporting period in which they are incurred.
Depreciation of property, plant and equipment is calculated on the straight-line method. Expected useful lives, which are regularly
reviewed, typically range between:
Buildings 30 – 50 years
Plant and machinery 5 – 15 years
Fixtures and equipment 2 – 10 years
Resource extraction assets are held at historic cost and depleted over the shorter of the life of the site or right-to-use period.
Site development costs incurred in order to commence extraction are capitalised as resource extraction assets.
Assets are reviewed annually for impairment indicators. An asset’s carrying amount is written down immediately to its recoverable
amount if the asset’s carrying amount is greater than its estimated recoverable amount.
Gains and losses on disposals are determined by comparing proceeds with carrying amount. These are included in the Consolidated
Income Statement.
40
Fletcher Building Limited Annual Report 2025
Notes to the Consolidated Financial Statements 2025 (Continued)
CONTENTS
2025
Land
NZ$M
Buildings
NZ$M
Plant &
Machinery
NZ$M
Fixtures &
Equipment
NZ$M
Resource
Extraction
NZ$M
Total
NZ$M
Carrying value at the beginning of the year2623331,3361591172,207
Additions4711455616292
Disposals(10)(1)(11)
Depreciation expense(10)(110)(24)(10)(154)
Impairment(14)(10)(2)(26)
Transfer to right-of-use assets(39)(39)
Transfer of assets to inventory(37)(4)(41)
Currency translation(1)(1)(3)(5)
1893751,3481881232,223
Represented by:
Cost1895292,8244331854,160
Accumulated depreciation and impairment(154)(1,476)(245)(62)(1,937)
Carrying value at the end of the year1893751,3481881232,223
2024
Carrying value at the beginning of the year 2442861,2641711072,072
Additions20611975319350
Acquisitions from business combination1113
Classified as held for sale(2)(1)(10)(32)(45)
Disposals(1)(2)(5)(2)(10)
Depreciation expense(11)(104)(31)(10)(156)
Impairment(8)(8)
Currency translation11
2623331,3361591172,207
Represented by:
Cost2624632,7283901694,012
Accumulated depreciation and impairment(130)(1,392)(231)(52)(1,805)
Carrying value at the end of the year2623331,3361591172,207
As at 30 June 2025, property, plant and equipment includes $461 million of assets under construction that are not depreciated until
they are commissioned and brought into use (2024: $396 million).
Physical impacts from climate-related risk
In FY20, FY22 and FY24, the Group appointed Aon New Zealand to assess climate-related physical risks. The assessment focused on a
number of climate-related hazards, including rainfall, temperature, sea level rise and extreme storm events, and other events such as
bush fire.
Three scenarios over three time horizons (2030, 2050 and 2070) were used for the FY24 assessment. The scenarios used map to
RCP2.5/SSP1, RCP2.6/SSP2 and RCP 8.5/SSP3 in the fifth and sixth IPCC assessment reports. Of the three scenarios assessed, the
RCP 8.5/SSP3 scenario, also known as the "reasonable worst case" or "Hot House" scenario, is the scenario with the highest projected
temperature rise.
The assessment generated a number of key outputs including:
−the Group’s overall exposure to climate related hazards is moderate with flooding being the key exposure;
−less than 5% of the Group’s asset value has high or extreme flood hazard exposure;
−the assessment did not identify a material change in risk in the FY2030 or 2050 timeframes; and
−some change in flood risk is expected for the FY2070 timeframe due to changes in climate stressors.
The Group is currently undertaking a review of climate-related physical risks in conjunction with Marsh Advisory. As at the reporting
date, no material changes have been identified relative to the prior year assessment performed by Aon. Accordingly, there has been
no change to the Group’s view of physical climate risk exposure or the expected useful economic lives of non-current assets.
41
Fletcher Building Limited Annual Report 2025
Notes to the Consolidated Financial Statements 2025 (Continued)
CONTENTS
Key impacts arising from climate-related transition risk
A significant climate-related transition risk for the Group relates to the current New Zealand Emissions Trading Scheme (NZ ETS)
settings, which will principally affect the Group’s Golden Bay® business and operating model. Golden Bay® is New Zealand’s only
domestic cement manufacturer, providing supply chain resilience to the construction industry, and is a significant employer in the
Northland region of New Zealand. Recent changes to ETS legislation in 2023, including the Climate Change Response (Late Payment
Penalties and Industrial Allocation) Amendment Act 2023, have introduced uncertainty regarding future free allocation levels which,
in the Group's view, disincentivises accelerated decarbonisation and increases the possibility of emissions leakage. While the business
is committed to decarbonising cement and concrete, it cannot deploy the capital previously signalled to the market for domestic
manufacturing until there is greater regulatory certainty. The Group considers that a Carbon Border Adjustment Mechanism (CBAM),
or a mechanism that delivers an equivalent level playing field, would need to be in place for the business to continue to be able to
manufacture cement domestically in the long term. In the absence of a CBAM or equivalent mechanism, Golden Bay® would likely
need to consider transitioning to an import model by the earlier 2030’s, which (if done) could result in a non-cash impairment and
write-down of assets of up to ~$165 million, as well as potential make good and redundancy cash costs of up to ~$180 million. These
amounts are scenario-based and subject to material judgement and estimation uncertainty; no impairment or provision related to this
scenario has been recognised at the reporting date.
13. INVESTMENT PROPERTY
The Group’s investment property primarily relates to Vivid Living®, the Group’s retirement operations, and is held for long-term yields
and is not occupied by the Group. The Group’s investment property includes freehold development land and building units under
development including adjacent common facilities.
Investment property is initially measured at cost and includes land and property construction costs, together with any directly
attributable overheads of bringing the asset to the condition necessary for it to be capable of operating in the manner intended
by management.
The Group applies the fair value model for subsequent measurement of its development land and completed retirement units, with
any resulting gain or loss being recognised in the Consolidated Income Statement. The measurement of fair value is within the
scope of NZ IFRS 13 Fair Value Measurement, and determined by way of an independent valuation undertaken of the retirement
village assets in accordance with professional valuation standards as at 30 June 2025.
All investment property has been determined to be level 3 in the fair value hierarchy as the fair value is determined using inputs that
are unobservable.
The Group’s investment property is categorised as follows:
2025
NZ$M
2024
NZ$M
Development land at fair value52 27
Retirement units under construction at cost3 25
Completed retirement units at fair value71 48
126
100
Movement in the Group’s investment property balances is outlined below:
2025
NZ$M
2024
NZ$M
Opening balance100 58
Additions12 20
Transferred from inventory8 20
Change in fair value6 2
Closing balance126 100
The Group’s interest in all completed investment property was valued on 30 June 2025 by Colliers Limited. The fair value of completed
investment property was $71 million (2024: $48 million).
During the year, 29 retirement units were provided to residents under Vivid Living®’s occupation right agreements (ORA) (2024: 17).
As at 30 June 2025, the carrying value of the Group’s ORA liability amounted to $44 million (2024: $17 million), recognised in "Other
liabilities" (see note 10).
42
Fletcher Building Limited Annual Report 2025
Notes to the Consolidated Financial Statements 2025 (Continued)
CONTENTS
14. INTANGIBLE ASSETS
Intangible assets acquired separately are measured on initial recognition at cost. Following initial recognition, intangibles are carried
at cost less any accumulated amortisation and accumulated impairment losses.
The Group’s intangible assets with indefinite useful lives are not amortised but are tested for impairment annually, either individually
or at the cash-generating unit level. Intangible assets with a definite life are amortised on a straight-line basis.
Goodwill is stated at cost, less any impairment losses. Goodwill is allocated to cash-generating units and is not amortised but is
tested annually for impairment, and when an indication of impairment exists. Brands for which all relevant factors indicate that
there is no limit to the foreseeable net cash flows are considered to have an indefinite useful life and are held at cost and are not
amortised but are subject to an annual impairment test.
For the purposes of considering whether there has been an impairment, assets are grouped at the lowest level for which there are
identifiable cash flows that are largely independent of the cash flows of other groups of assets. When the book value of a group
of assets exceeds the recoverable amount, an impairment loss arises and is recognised in the Consolidated Income Statement
immediately.
Amortisation of definite life intangible assets are calculated on the straight-line method. Expected useful lives, which are regularly
reviewed, typically range between:
Intangible assets, including software 5 – 15 years
Cloud computing arrangements
The Group recognises costs incurred in configuring or customising cloud application software as an intangible asset only if the
activities create a resource that the Group can control and from which it expects to benefit. Such costs are amortised over the
estimated useful life of the software application on a straight-line basis. The remaining useful life is reviewed at least at the end
of each reporting period and any changes are treated as changes in accounting estimates.
Where the Group cannot determine whether it has control of the cloud application software, the arrangement is deemed to be
a service contract. In such cases, any implementation costs (i.e. cost incurred to configure or customise the cloud application
software) are expensed to the Consolidated Income Statement as incurred.
Where the provider of the cloud application software provides both configuration and customisation services, judgement is required
to determine whether these services are distinct from the underlying use of the software application. Distinct configuration and
customisation costs are expensed as incurred as the software application is configured or customised (i.e. upfront). Non-distinct
configuration and customisation costs, that significantly enhance or modify the cloud-based application, are recognised as a
prepaid asset and expensed over the contract term on a straight-line basis.
To the extent the acquisition and development of capital intangible projects extend over a period of 12 months, attributable
borrowing costs are capitalised as part of the cost of the asset while the asset is being developed. On completion, all cost included
in asset under development are reclassified as "Other intangibles" and amortised when available for use.
Assessing the carrying value of goodwill and indefinite life brands requires management to estimate future cash flows to be
generated by the related cash-generating unit. The key assumptions used in the value-in-use or fair value less costs of disposal basis
include the expected rate of growth of revenues and earnings, the EBIT margin and the appropriate discount rate to apply, and are
detailed in note 2.3.
43
Fletcher Building Limited Annual Report 2025
Notes to the Consolidated Financial Statements 2025 (Continued)
CONTENTS
2025
Goodwill
NZ$M
Brands
NZ$M
Other
Intangibles
NZ$M
Total
NZ$M
Carrying value at the beginning of the year 6442321581,034
Additions33
Impairment/derecognition(195)(19)(97)(311)
Amortisation expense(17)(17)
Currency translation (4)(2)(6)
44521147703
Represented by:
Cost4453122501,007
Accumulated impairment/amortisation(101)(203)(304)
Carrying value at the end of the year44521147703
2024
Goodwill
NZ$M
Brands
NZ$M
Other
Intangibles
NZ$M
Total
NZ$M
Carrying value at the beginning of the year 8242851441,253
Additions5454
Disposals(1)(1)
Acquired from business combination66
Classified as held for sale(33)(2)(14)(49)
Impairment (153)(52)(9)(214)
Amortisation expense(16)(16)
Currency translation 11
6442321581,034
Represented by:
Cost6443123441,300
Accumulated impairment/amortisation(80)(186)(266)
Carrying value at the end of the year6442321581,034
Impairment of software assets
As at 30 June 2025, other intangible assets included $5 million of assets under development (2024: $105 million).
In June 2024, the Group announced a 25-month pause to the Group’s Digital@Fletcher (D@F) ERP programme, a multi-year
transformation to implement a single integrated ERP platform across all manufacturing and distribution business units. By 30 June
2024, only four business units had transitioned to the platform. During the current year, amortisation of $2 million was recognised
on the D@F asset.
In June 2025, the Group stopped its Digital@Fletcher ERP transformation programme in line with its decision to decentralise
decision-making to individual business units. To minimise future expenditure, the Group migrated its SAP S/4 Hana system to
SAP RISE in May 2025, a subscription-based SaaS cloud solution (S/4 Hana Cloud Private Edition). Following this migration, and in
accordance with NZ IAS 38 Intangible Assets, the Group determined that it no longer retained control over the previously capitalised
ERP software asset. This conclusion was based on the transfer of operational responsibility to SAP, the non-substantive option to
revert to the on-premise model due to significant costs and operational burdens and the loss of key cloud-exclusive capabilities
such as AI features, automated testing and enhanced cybersecurity available through SAP RISE. As a result, the Group derecognised
the ERP asset with a carrying amount of $95 million, classifying this amount as a Significant Item, recognised in the income
statement. This treatment reflects significant accounting judgement and is consistent with the IFRIC March 2021 agenda decision
on the accounting for SaaS cloud computing arrangements.
44
Fletcher Building Limited Annual Report 2025
Notes to the Consolidated Financial Statements 2025 (Continued)
CONTENTS
Significant intangible balances within cash-generating units (CGUs)
Goodwill
2025
NZ$M
Goodwill
2024
NZ$M
Brands
2025
NZ$M
Brands
2024
NZ$M
Laminex® Australia156158123123
Higgins® New Zealand24241919
Iplex® New Zealand3710577
Stramit®14614141
PlaceMakers®5656
Waipapa Pine5257
Humes®1949
Other871342142
445644211232
The goodwill allocated to significant CGUs accounts for 80% (2024: 79%) of the total carrying value of goodwill. The remaining "other"
CGUs, which comprise 9 (2024: 9) in total, are each less than 7% of total carrying value (2024: 6%). The significant brand assets
account for 90% (2024: 82%) of the total carrying value of brands. The remaining "other" brand assets are each less than 6% of total
carrying value (2024: 5%).
15. LEASES
The Group leases various offices, warehouses, retail stores, equipment and vehicles. Rental contracts are typically made for fixed
periods, but may have extension options.
Lease terms are negotiated on an individual basis and contain a wide range of terms and conditions. The lease agreements do not
impose any covenants other than the security interests in the leased assets that are held by the lessor. Leased assets may not be
used as security for borrowing purposes.
Assets and liabilities arising from a lease are initially measured on a present value basis. The lease payments are discounted using
the interest rate implicit in the lease. If that rate cannot be readily determined, which is generally the case for property leases in the
Group, the lessee’s incremental borrowing rate is used, being the rate that the individual lessee would have to pay to borrow the
funds necessary to obtain an asset of similar value to the right-of-use asset in a similar economic environment with similar terms,
security and conditions.
Right-of-use assets are measured at cost and include, after consideration of the initial measurement of the lease liability, any lease
incentives, initial direct costs and any make good costs associated with the lease. Right-of-use assets are generally depreciated over
the shorter of the asset’s useful life and the lease term on a straight-line basis. If it is reasonably certain the Group will exercise a
purchase option, the right-of-use asset is depreciated over the underlying asset’s useful life.
Payments associated with short-term leases of equipment and vehicles and all leases of low-value assets are recognised on a
straight-line basis as an expense in the Consolidated Income Statement. Short-term leases are leases with a lease term of 12 months
or less. Low-value assets comprise IT equipment and small items of office furniture.
Extension options
The Group has some lease contracts that include extension options. The Group assesses at lease commencement date whether
it is reasonably certain it will exercise the extension options. The Group reassesses whether it is reasonably certain it will exercise
the options if there is a significant event or significant change in circumstances within its control. These options provide flexibility
in managing the leased-asset portfolio and align with the Group’s business needs. Management exercises significant judgement
in determining whether these extension and termination options are reasonably certain to be exercised.
As at 30 June 2025, five of the six largest property lease contracts (2024: six) have related extension options included in the
estimated lease term (where management is reasonably certain to exercise the options), resulting in future lease payments being
included in the measurement of the lease liability recorded in the Consolidated Balance Sheet.
45
Fletcher Building Limited Annual Report 2025
Notes to the Consolidated Financial Statements 2025 (Continued)
CONTENTS
2025
Land
NZ$M
Buildings
NZ$M
Plant &
Machinery
NZ$M
Total
NZ$M
Opening net book value at the
beginning of the year
129632161,191
Additions and renewals1021186307
Depreciation (2)(113)(74)(189)
Impairment(1)(7)(8)
Terminations/revisions of extension options(83)(7)(90)
Transfer of assets from property, plant and
equipment
3939
Currency translation(4)(4)
Closing balance at the end of the year589672211,246
2024
Opening net book value at the
beginning of the year
121,1022101,324
Additions and renewals1152108261
Classified as held for sale(96)(26)(122)
Depreciation (1)(124)(75)(200)
Impairment(2)(2)
Terminations/revisions of extension options(71)(2)(73)
Currency translation213
Closing balance at the end of the year129632161,191
Lease liabilities
2025
NZ$M
2024
NZ$M
Opening balance1,4361,596
Additions and renewals335258
Classified as held for sale(143)
Repayments(177)(206)
Terminations/revisions of extension options(92)(74)
Currency translation(5)5
Closing balance1,4971,436
Current portion172 164
Non-current portion1,325 1,272
Carrying amount at the end of the year1,497 1,436
46
Fletcher Building Limited Annual Report 2025
Notes to the Consolidated Financial Statements 2025 (Continued)
CONTENTS
Funding and Financial Risk Management
This section includes details on the Group’s funding and outlines the market, credit and liquidity risks that the Group is exposed to and
how these risks are managed, including the use of derivative financial instruments.
Capital risk management
The Group’s objectives when managing capital are to provide returns to shareholders and benefits for other stakeholders and to
maintain an optimal capital structure that safeguards the Group’s ability to continue as a going concern. In order to maintain or adjust
the capital structure, the Group may adjust the amount of dividends paid to shareholders, return capital to shareholders, undertake
share buybacks, issue new shares or sell assets to reduce net debt.
The Group has various debt facilities and covenants in place. A key measure is a through-the-cycle net debt to EBITDA ratio (leverage).
Net debt represents the value of the Group’s drawn borrowings adjusted for debt hedging activities and available cash funding. The
Group has set a net debt target range of $400 million to $900 million, with dividends to be suspended until the dividend policy is
reset and communicated to shareholders.
Credit rating
As at 30 June 2025, the Group’s credit rating is Baa3 with a stable outlook, reaffirmed by Moody’s on 25 July 2025. This followed a
downgrade from Baa2 in June 2024. The initial Baa2 rating was assigned in October 2023. The downgrade had no material impact
on near-term funding costs.
16. BORROWINGS
The Group borrows in the form of private placements, bank loans, capital notes and other financial instruments. Funding costs
associated with the Group’s borrowings are shown in note 17.
Borrowings are initially recognised at fair value net of attributable transaction costs, and are subsequently measured at amortised
cost using the effective interest rate method. Any borrowings that have been designated as hedged items (USD and any other
foreign currency borrowings) are carried at amortised cost plus a fair value adjustment under hedge accounting requirements.
Borrowings denominated in foreign currencies are retranslated to the functional currency at each reporting date.
Economic debt represents the face value of drawn borrowings adjusted for foreign currency movements hedged with derivative
instruments. The Group uses cross currency interest rate swaps, interest rate swaps and forward foreign exchange contracts to
manage its exposure to interest rates and borrowings sourced in currencies different from that of the borrowing entity’s reporting
currency. Details of debt hedging activities and instruments used are included in note 18.
Reconciliation of liabilities arising from financing activities
The table below details changes in the Group’s net debt arising from financing activities, including both cash and non-cash changes.
2024
NZ$M
Drawdowns /
Cash inflows
NZ$M
Repayments /
Cash outflows
NZ$M
Currency
translation
NZ$M
Other non-cash
movements
(including hedge
accounting)
NZ$M
2025
NZ$M
Private placements489 (198)14 18 323
Bank loans 1,302 629 (1,302)(2)627
Capital notes 297 (80)217
Other loans 20 (15)5
Carrying value of borrowings
(as per Consolidated Balance Sheet)
2,108 629 (1,595)12 18 1,172
Less: value of derivatives* (31)18 (13)(8)(34)
Economic debt2,077 629 (1,577)(1)10 1,138
Less: Cash and cash equivalents (311)172 (139)
Net debt1,766 801 (1,577)(1)10 999
* Used to manage changes in hedged risks on debt instruments.
47
Fletcher Building Limited Annual Report 2025
Notes to the Consolidated Financial Statements 2025 (Continued)
CONTENTS
2023
NZ$M
Drawdowns /
Cash inflows
NZ$M
Repayments /
Cash outflows
NZ$M
Currency
translation
NZ$M
Other non-cash
movements
(including hedge
accounting)
NZ$M
2024
NZ$M
Private placements484 (3)8 489
Bank loans 946 920 (565)1 1,302
Capital notes 343 32 (78) 297
Other loans 30 (3)(7)20
Carrying value of borrowings
(as per Consolidated Balance Sheet)
1,803 952 (646)(2)1 2,108
Less: value of derivatives*(26) 3 (8)(31)
Economic debt1,777 952 (646)1 (7)2,077
Less: Cash and cash equivalents (365)54 (311)
Net debt1,412 1,006 (646)1 (7)1,766
* Used to manage changes in hedged risks on debt instruments.
Carrying value of borrowings included within the Consolidated Balance Sheet as follows:
2025
NZ$M
2024
NZ$M
Current borrowings60 86
Non-current borrowings1,112 2,022
Total borrowings1,172 2,108
At reporting date, the Group had the following funding facilities:
Utilised facilities1,138 2,077
Unutilised bank loan facilities916 760
Total facilities2,054 2,837
Capital raise
During November and December 2024, the Group repaid $680 million of its outstanding borrowings on a pro rata basis, including full
repayment and cancellation of the Group’s Club Loan ($400 million) on 29 November 2024 and partial repayment and cancellation
of the amounts outstanding under its USPP facility ($169 million) and syndicated bank facility ($111 million), on 10 and 11 December
2024 respectively. The repayments were funded via proceeds from the equity capital raise during the period. In conjunction with
the partial repayment of USPP notes, the Group closed out corresponding interest rate swaps (notional value: NZ$200 million) and
partially closed out cross currency interest rate swaps (notional value: US$94.6 million, EUR$20.3 million) that were used in hedging
the underlying borrowings repaid. A $10 million loss from the close-out of the CCIRS hedge instruments that was related to the early
redemption of USPP facility has been classified as a Significant Item in note 2.2. As a result of the debt repayments the Group also
agreed certain amendments with all of its senior lenders (SFA and USPP), see further below.
Private placements
Private placements comprise loans of US$151 million, CA$15 million, EUR$21 million and GBP$10 million with maturities between 2026
and 2028.
Capital notes
At 30 June 2025 the Group had issued $217 million of listed capital notes to retail investors (2024: $297 million) with maturities
between 2026 and 2029. The capital notes do not carry voting rights and do not participate in any change in value of the issued shares
of Fletcher Building Limited.
On 28 January 2025, the Group through its subsidiary Fletcher Building Industries Limited (FBI) announced that the trustee for the
noteholders of each series of capital notes had agreed to amend the conditions of the capital notes. This allows FBI to elect to redeem
all capital notes of a series on the applicable election date for that series, as an alternative to the procedure for rollover of the capital
notes on new terms. FBI elected to redeem all of the FBI190 Capital Notes that were due to rollover on 17 March 2025.
48
Fletcher Building Limited Annual Report 2025
Notes to the Consolidated Financial Statements 2025 (Continued)
CONTENTS
Listed capital notes are long-term fixed rate unsecured subordinated debt instruments that are traded on the NZDX. On election date,
holders may choose either to keep their capital notes on new terms or convert the principal amount and any interest into shares of
Fletcher Building Limited, at approximately 98% of the current market price. If the principal amount of these notes held at 30 June
2025 were to be converted to shares, 77 million (2024: 107 million) Fletcher Building Limited shares would be issued at the share price
as at 30 June 2025, of $2.89 (2024: $2.83).
Instead of issuing shares to holders who choose to convert, Fletcher Building may, at its option, purchase or redeem the capital notes
for cash at the principal amount plus any accrued interest.
As at 30 June 2025, the Group held $183 million (2024: $202 million) of its own capital notes.
Bank loans
Syndicated revolving credit facilities
At 30 June 2025, the Group had a NZ$836 million (2024: $925 million) and A$654.5 million (2024: A$674.5 million) syndicated
revolving credit facility on an unsecured, negative pledge and borrowing covenant basis. The participating lenders are both New
Zealand registered and offshore banks. The facility comprises four tranches as follows: A$654.5 million expiring in two tranches
including July 2027 and June 2029, NZ$325 million expiring on 22 November 2026, NZ$400 million expiring on 1 July 2027 and
NZ$200 million expiring on 31 May 2028. The funds under the syndicated revolving credit facility can be borrowed in Australian and
New Zealand dollars only.
In the 2024 financial year, the Group announced amendments to its banking agreements which enabled it to rely on more favourable
terms for covenant testing through to the end of calendar year 2025.
Other loans
At 30 June 2025, the Group had other loans of $5 million (2024: $20 million) and all were subject to the negative pledge. Other loans
include bank overdrafts, short-term loans, working capital facilities and vendor loans.
Negative pledge
The Group borrows certain funds based on a negative pledge arrangement. The negative pledge includes a cross guarantee between
a number of wholly owned subsidiaries and ensures that external senior indebtedness ranks equally in all respects and includes the
covenant that security can be given only in very limited circumstances. At 30 June 2025, the Group had debt subject to the negative
pledge of $920 million (2024: $1,779 million).
Covenants
The Group’s financial covenants under its senior borrowing arrangements include interest cover and leverage ratio.
As a result of the debt repayments the Group agreed certain amendments with all of its lenders (SFA and USPP) which enable it to rely
on more favourable terms for testing of its Senior Interest Cover covenant from December 2024 to September 2025. This is in addition
to the Senior Interest Cover and Senior Leverage covenant amendments previously agreed and disclosed, which are continuing, for
the period from June 2024 to December 2025 (inclusive) if required. Should the Group need to rely on the amended covenant levels,
it will not pay a dividend until it agrees to be tested by, and complies with, its existing (original) covenant levels. The Group was in
compliance with all financial covenants during the year and at balance date.
CovenantsExisting levelDec 2025
Level for
Jun 2026+
Senior Leverage<3.5x<3.25x
<3.25x
Senior Interest Cover>2.25x>2.25x
>3.0x
Total Interest cover>2.0x>2.0x
>2.0x
Note: The Senior Interest Cover covenant of >3.0x (from Jun-26+) is the level contained in the USPP lending agreements. The covenant in the SFA is >2.75x.
49
Fletcher Building Limited Annual Report 2025
Notes to the Consolidated Financial Statements 2025 (Continued)
CONTENTS
The impact of debt hedging activities on borrowings
2025Underlying borrowing exposureEconomic debt exposure
Currency of borrowings
Fixed rate
NZ$M
Floating rate
NZ$M
Impact of hedging
NZ$M
Fixed rate
NZ$M
Floating rate
NZ$M% Fixed
New Zealand Dollar21742221955330564%
Australian Dollar21070 11316741%
British Pound23(23)
Canadian Dollar18(18)
Euro41(41)
United States Dollar241(241)
Total540632(34)66647259%
2024Underlying borrowing exposureEconomic debt exposure
Currency of borrowings
Fixed rate
NZ$M
Floating rate
NZ$M
Impact of hedging
NZ$M
Fixed rate
NZ$M
Floating rate
NZ$M% Fixed
New Zealand Dollar2971,080354 77395845%
Australian Dollar227104 14718444%
British Pound21(21)
Canadian Dollar18(18)
Euro73(73)
United States Dollar377(377)
Other15 15
Total7861,322(31)9201,15744%
Liquidity and funding risk
Liquidity risk is the risk that the Group will encounter difficulty in meeting its financial commitments as they fall due. Funding risk is
the risk that the Group under normal circumstances, will not be able to refinance its maturing debts in an orderly manner. The Group
manages its liquidity and funding risk by maintaining a target level of undrawn committed credit facilities and an appropriate spread
of maturity dates in respect of the Group’s debt facilities that it reviews on an ongoing basis.
The following maturity analysis table sets out the remaining contractual undiscounted cash flows, including estimated interest
payments for non-derivative financial liabilities and derivative financial instruments. Creditors and accruals are excluded from this
analysis as they are not part of the Group’s assessment of liquidity risk because these are offset by debtors with similar payment terms.
50
Fletcher Building Limited Annual Report 2025
Notes to the Consolidated Financial Statements 2025 (Continued)
CONTENTS
2025
Contractual
cash flows
NZ$M
Up to 1 Year
NZ$M
1–2 Years
NZ$M
2–5 Years
NZ$M
Over 5 Years
NZ$M
Bank loans627325302
Capital notes217559072
Private placements332170162
Other loans55
Borrowings – principal cash flows1,18160585536
Gross settled derivatives – to pay(709)(125)(347)(237)
Gross settled derivatives – to receive666125324217
Debt derivatives financial instruments
– principal cash flows
(43)(23)(20)
Total principal cash flows1,13860562516
Contractual interest cash flows76362119
Total lease cash flow2,0432342125071,090
Total contractual cash flows3,2573307951,0421,090
2024
Bank loans1,3021,302
Capital notes2978055162
Private placements516516
Other loans2020
Borrowings – principal cash flows2,13580751,980
Gross settled derivatives – to pay458458
Gross settled derivatives – to receive(516)(516)
Debt derivatives financial instruments
– principal cash flows
(58)(58)
Total principal cash flows2,07780751,922
Contractual interest cash flows149583952
Total lease cash flow1,791212191458930
Total contractual cash flows4,0173503052,432930
17. NET FUNDING COSTS
Interest income and expense are recognised on an accrual basis in the Consolidated Income Statement using the effective
interest method.
Interest costs relating to qualifying assets under development are capitalised as a component of the cost of development or
construction. Where funds are borrowed specifically for qualifying projects, the actual borrowing costs incurred are capitalised.
Where the projects are funded through general borrowings, the borrowing costs are capitalised based on the weighted average
cost of borrowing. Borrowing costs incurred after commencement of commercial operations are expensed in the Consolidated
Income Statement.
Funding costs also include the changes in fair value relating to derivatives used to manage interest rate risk, and the associated
changes in fair value of the borrowings designated in a hedge relationship attributable to the hedged risk.
51
Fletcher Building Limited Annual Report 2025
Notes to the Consolidated Financial Statements 2025 (Continued)
CONTENTS
2025
NZ$M
2024
NZ$M
Interest income(6)(5)
Interest on borrowings and derivatives96 131
Interest capitalised to balance sheet(13)(13)
Other interest expense7 7
Net interest expense84 120
Changes in fair value relating to:
Borrowings designated in a hedging relationship(18)8
Derivatives designated in a hedging relationship18 (8)
Total changes in fair value
Bank fees, registry and other expenses1 2
Line fees16 15
Debt restructure fees1 5
Net funding costs102 142
Included in interest on borrowings and derivatives is the net settlement of the Group’s interest derivatives. This consists of
$34 million of interest income and $42 million of interest expense (2024: $49 million interest income; $57 million interest expense).
Other expenses include credit valuation adjustments (CVA)/debit valuation adjustments (DVA) on derivatives.
Capitalisation of borrowing costs
The Group funds capital projects with general borrowings and, where newly acquired or constructed assets meet qualifying
criteria of NZ IAS 23 Borrowing costs, interest costs have been capitalised to their cost at a weighted average capitalisation rate
of 5.62% (2024: 6.62%), resulting in $13 million of capitalised borrowing costs in the year ended 30 June 2025 (2024: $13 million).
The capitalised amount mainly relates to Laminex® New Zealand’s wood panels plant ($11 million).
Interest rate risk
At 30 June 2025, 59% of the Group’s debt was subject to a fixed interest rate (2024: 44% fixed).
(i) Interest rate repricing
The following tables set out the interest rate repricing profile of interest bearing financial liabilities assuming floating rate facilities are
utilised to maintain debt levels.
2025
NZ$M
2026
NZ$M
2027
NZ$M
2028
NZ$M
2029
NZ$M
2030
NZ$M
Fixed financial liabilities 666442310158125125
Floating financial liabilities4726968289801,0131,013
Economic Debt1,1381,1381,1381,1381,1381,138
% Fixed59%39%27%14%11%11%
The Group’s overall weighted average interest rate (based on year-end borrowings) excluding fees is 5.60% (2024: 6.22%).
(ii) Interest rate risk
It is estimated a 100 basis point increase in interest rates would result in an increase in the Group’s interest costs by approximately
$8 million pre-tax on the Group’s debt portfolio exposed to floating rates at balance date (2024: $11 million) assuming that all other
variables remain constant.
52
Fletcher Building Limited Annual Report 2025
Notes to the Consolidated Financial Statements 2025 (Continued)
CONTENTS
18. FINANCIAL RISK MANAGEMENT
Exposures to credit, liquidity, foreign currency, interest rate and commodity price risks arise in the normal course of the Group’s
business. The principles under which these risks are managed are set out in policy documents approved by the Board. The policy
documents identify the risks and set out the Group’s objectives, policies and processes to measure, manage and report the risks.
The policies are reviewed periodically to reflect changes in financial markets and the Group’s businesses. Risk management is
carried out in conjunction with the Group’s central treasury function, which supports compliance with the risk management policies
and procedures.
Derivative financial instruments, including forward foreign exchange contracts, interest rate swaps, foreign currency swaps, cross
currency interest rate swaps, options, forward rate agreements and commodity price swaps are utilised to reduce exposure to
market risks. All the Group’s derivative financial instruments are held to hedge risk on underlying assets, liabilities, and forecast and
committed trading and funding transactions. The Group policy specifically prohibits the use of derivative financial instruments for
trading or speculative purposes.
The table below summarises the key financial market risks to the Group and how these risks are managed:
Financial riskDescriptionManagement of risks
Foreign currency
trade transaction risk
(note 18.1(i))
Arises on the conversion of a business
unit’s foreign currency revenue and
expenditure to its functional currency,
such that a material loss or a gain may
be incurred. This covers imports, exports,
capital expenditure, and foreign currency
bank accounts balances that are not in
a business unit’s functional currency.
It is Group policy that no currency exchange risk may be entered into or
allowed to remain outstanding should it arise on committed transactions.
The Group uses foreign currency forward contracts and foreign currency
options to manage the risk on firm commitments and recognised
material trade related exposures. The majority of these transactions
have maturities of less than one year from the reporting date.
Foreign currency
balance sheet
translation risk
(note 18.1(ii))
Arises due to the translation of the
Group’s foreign denominated assets
and liabilities, overseas operations and
subsidiaries to the company’s functional
currency of NZD, such that the Group’s
reporting of financial ratios would be
materially affected.
It is the Group’s policy to hedge this foreign currency translation risk by
borrowing in the currency of the asset in proportion to the Group’s target
debt to debt plus equity ratio.
Where the underlying debt in any currency does not equate to the
required proportion of total debt, debt derivatives, such as foreign
exchange forwards, swaps and cross currency interest rate swaps are
entered into. These are designated as net investment hedges where
the borrowings or contracts are in a different currency from that of the
business in which they are recognised.
To manage the net exposure to foreign currency borrowings, the Group
enters into cross currency interest rate swaps (CCIRS). CCIRS are used
to manage the combined foreign exchange risk and interest rate risk as
they swap fixed rate foreign currency borrowings and interest payments
into equivalent New Zealand and Australian dollar-denominated amounts
of principal with floating and fixed interest rates.
Interest rate risk
(note 17 & note 18.2)
The risk that the value of borrowings
or cash flows associated with the
borrowings will change due to changes
in market rates.
The Group manages the fixed interest rate component of its borrowings
by entering into CCIRS, interest rate swaps, forward rate agreements
and options. It aims to maintain fixed interest rate borrowings between
certain ranges over specific time periods.
Commodity
price risk
Arises from committed or highly
probable trade transactions that are
linked to commodities.
The Group manages its commodity price risks through negotiated supply
contracts and, for certain commodities, by using commodity price swaps
and options. The Group manages its commodity price risk depending
on the underlying exposures, economic conditions and access to active
derivatives markets.
Cash flow hedge accounting is applied to commodity derivative
contracts. At 30 June 2025, the Group has hedged a portion of its
electricity and diesel usage for the period 1 July to 31 December 2030
and 30 June 2026 respectively. The average hedged electricity price
is NZ$155/MWh and the average hedged diesel price (ex-Singapore)
is NZ$0.87/Litre.
A 10% increase in the New Zealand electricity spot price at balance sheet
date would result in an increase to equity of approximately $4 million
and no material impact on the Consolidated Income Statement.
A 10% increase in the New Zealand diesel spot price at balance sheet
date would not have a material impact on the Group’s earnings or
equity position.
Disclosures about the credit risk associated with financial instruments and fair value measurement of financial instruments are
included in notes 18.3 and 18.4.
53
Fletcher Building Limited Annual Report 2025
Notes to the Consolidated Financial Statements 2025 (Continued)
CONTENTS
Derivative financial instruments and hedge accounting
Derivatives are recorded at fair value with the resulting gain or loss on remeasurement recognised in the Consolidated Income
Statement unless the derivative is designated into an effective hedge relationship as a hedging instrument, in which case the timing
of recognition in the Consolidated Income Statement depends on the nature of the designated hedge relationship. For a derivative
instrument to be classified and accounted for as a hedge, it must be highly correlated with, and effective as a hedge of the
underlying risk being managed. This relationship is documented from inception of the hedge. The fair values of derivative financial
instruments are determined by applying quoted market prices, where available, or by using inputs that are observable for the asset
or liability.
The Group may designate derivatives as:
−Fair value hedges (where the derivative is used to manage the variability in the fair value of recognised assets and liabilities);
−Cash flow hedges (where the derivative is used to manage the variability in cash flows relating to recognised liabilities or forecast
transactions); or
−Net investment hedges (where borrowings or derivatives are used to manage the risk of fluctuation in the translated value of its
foreign operations).
The Group holds derivative instruments until expiry except where the underlying rationale from a risk management point of view
changes, such as when the underlying asset or liability that the instrument hedges no longer exists, in which case early termination
occurs.
Fair value hedges
Where a derivative financial instrument is designated as a hedge of a recognised asset or liability, or of a firm commitment, any gain or
loss on the derivative (hedging instrument) is recognised directly in the Consolidated Income Statement, together with any changes in
the fair value of the hedged risk (hedged item).
Cash flow hedges
Where a derivative financial instrument is designated as a hedge of the variability in cash flows of assets or liabilities, or of a highly
probable forecasted transaction, the effective part of any gain or loss is recognised directly in the cash flow hedge reserve within
equity and the ineffective part is recognised immediately in the Consolidated Income Statement. The effective portion is reclassified
to the Consolidated Income Statement when the underlying cash flows affect the Consolidated Income Statement.
If the hedge no longer meets the criteria for hedge accounting, hedge accounting is discontinued. The cumulative gain or loss
previously recognised in the cash flow hedge reserve remains there until the forecast transaction occurs, or is immediately recognised
in the Consolidated Income Statement if the transaction is no longer expected to occur.
Net investment hedges
Where the derivative financial instruments are designated as a hedge of a net investment in a foreign operation, the derivative
financial instruments are accounted for on the same basis as cash flow hedges through the foreign currency translation reserve (FCTR)
within equity.
Cost of hedging
The forward elements of foreign exchange forwards and swaps are excluded from designation as the hedging instrument and the
foreign currency basis spreads of CCIRS are separately accounted for and recognised in Other Comprehensive Income as a cost
of hedging.
Derivatives that do not qualify for hedge accounting
Where a derivative financial instrument does not qualify for hedge accounting, or where hedge accounting has not been elected, any
gain or loss is recognised directly in the Consolidated Income Statement.
18.1 FOREIGN CURRENCY RISK
(i) Currency transaction risk
Cash flow hedge accounting is applied to forecast transactions and short-term intra-Group cash funding. The Group designates the
spot element of foreign exchange forwards and swaps to hedge its currency risk and applies a hedge ratio of 1:1. The Group’s policy
is for the critical terms of the foreign exchange forwards and swaps to align with the hedged item. The main currencies hedged are
the Australian dollar, the United States dollar and the Euro. The gross value of these foreign exchange derivatives at 30 June 2025 was
$645 million (2024: $542 million).
(ii) Currency translation risk
The effect of the Group’s hedge accounting policy in managing foreign exchange risk related to the Group’s net investments in foreign
operations is presented in the table below:
54
Fletcher Building Limited Annual Report 2025
Notes to the Consolidated Financial Statements 2025 (Continued)
CONTENTS
Hedged investments and hedging instruments used
2025
Maturity:
0–37 months
NZ$M
2024
Maturity:
0–49 months
NZ$M
Amount of investment hedged
Foreign currency AUD70 104
Notional amount
Cross currency interest rate swaps (13–37 months)(70)(104)
Hedge effectiveness
Change in value used for calculating hedge ineffectiveness11
Net investment hedge (gain)/loss recognised in Other Comprehensive Income(1)(1)
It is estimated a 10% weakening of the New Zealand dollar against the foreign currencies that the Group is exposed to on the net assets
of its foreign operations, would result in an increase to equity of approximately $111 million (2024: $88 million) and no material impact
on the Consolidated Income Statement.
The Group applies hedge accounting to foreign currency denominated borrowings that are managed by CCIRS. The hedge ratio
applied is 1:1. The hedge relationship may be designated into separate cash flow hedges and fair value hedges to manage the different
components of foreign currency and interest rate risk:
−fair value hedge relationship where CCIRS are used to manage the interest rate and foreign exchange risks;
−currency risk in relation to foreign currency denominated borrowings with fixed interest rates; and
−cash flow hedge relationship where CCIRS are used to manage the variability in cash flows arising from interest rate movements
on floating interest rate payments and foreign exchange movements on payments of principal and interest.
The Group determines the existence of an economic relationship between the hedging instrument and hedged item based on the
currency, reference interest rates, tenors, repricing dates and maturities and the notional amounts. The Group assesses whether the
derivative designated in each hedging relationship is expected to be effective in offsetting changes in the fair value of the hedged item
using the hypothetical derivative method.
In these hedging relationships, the main sources of ineffectiveness are:
−changes in counterparty credit risk and cross currency basis spreads that are not reflected in the change in the fair value of the
hedged item; and
−differences in repricing dates between the cross currency interest rate swaps and the borrowings.
The effect of the Group’s hedge accounting policies in managing both its foreign exchange risk and interest rate risk related
to borrowings denominated in foreign currency is presented in the table below:
2025
USD
13–37 Months
Floating
NZD/USD
0.6944
NZ$M
CAD*
37 Months
Fixed – 4.43%
AUD/CAD
0.927
NZ$M
EUR*
13 Months
Fixed – 4.30%
AUD/EUR
0.684
NZ$M
GBP*
37 Months
Fixed – 4.80%
AUD/GBP
0.568
NZ$M
Total
NZ$M
Cash flow hedging and fair value hedging
Cross currency interest rate swaps
Nominal amount of the hedging instrument 250 18 41 23 332
Carrying amount 21 1 7 3 32
Accumulated cost of hedging recognised
in Other Comprehensive Income
(1) (1)
Change in value used for calculating
hedge ineffectiveness
21 1 22
Hedging (gain)/loss recognised
in Other Comprehensive income
(3) (1) (4)
Fair value hedge (gain)/loss in the
Consolidated Income Statement
(18) (18)
* Designated in cash flow relationship only
55
Fletcher Building Limited Annual Report 2025
Notes to the Consolidated Financial Statements 2025 (Continued)
CONTENTS
2024
USD
25–49 months
Floating
NZD/USD
0.6944
NZ$M
CAD*
49 Months
Fixed – 4.43%
AUD/CAD
0.927
NZ$M
EUR*
25 Months
Fixed – 4.30%
AUD/EUR
0.684
NZ$M
GBP*
49 Months
Fixed – 4.80%
AUD/GBP
0.568
NZ$M
Total
NZ$M
Cash flow hedging and fair value hedging
Cross currency interest rate swaps
Nominal amount of the hedging instrument 404 18 73 21 516
Carrying amount 18 5 1 24
Accumulated cost of hedging recognised
in Other Comprehensive Income
(4) (4)
Change in value used for calculating
hedge ineffectiveness
5 1 1 7
Hedging loss/(gain) recognised
in Other Comprehensive Income
3 (1) (1) 1
Fair value hedge (gain)/loss in the
Consolidated Income Statement
(8) (8)
* Designated in cash flow relationship only
18.2 INTEREST RATE RISK
The Group applies hedge accounting to the borrowings and the associated interest rate swaps, for movements in benchmark market
interest rates. Hedge accounting is applied to these instruments for floating-to-fixed instruments as cash flow hedges or for fixed-to-
floating instruments as fair value hedges. The Group applies a hedge ratio of 1:1.
The Group determines the existence of an economic relationship between the hedging instrument and hedged item based on the
reference interest rates, tenors, repricing dates and maturities and the notional amounts. The Group assesses whether the derivative
designated in each hedging relationship is expected to be effective in offsetting changes in the fair value of the hedged item using the
hypothetical derivative method.
In these hedging relationships, the main sources of ineffectiveness are:
−the effect of the counterparty and the Group’s own credit risk on the fair value of the interest rate swaps that is not reflected in the
change in the fair value of the hedged item; and
−differences in repricing dates between the interest rate swaps and the borrowings.
2025
NZD
6-36 Months
4.74%
NZ$M
AUD
19 Months
4 .1 1 %
NZ$M
Total
NZ$M
Cash flow hedging
Interest rate swaps
Nominal amount of the hedging instrument33543378
Carrying amount - derivative assets/(liabilities)(9)(1)(10)
Change in value used for calculating hedge ineffectiveness(13)(1)(14)
Hedging loss/(gain) recognised in Other Comprehensive Income13114
2024
NZD
13-48 Months
4.34%
NZ$M
AUD
31 Months
4 .1 1 %
NZ$M
Total
NZ$M
Cash flow hedging
Interest rate swaps
Nominal amount of the hedging instrument47544519
Carrying amount - derivative assets/(liabilities)44
Change in value used for calculating hedge ineffectiveness(3)(2)(5)
Hedging (gain)/loss recognised in Other Comprehensive income325
There was no hedge ineffectiveness recognised in the Consolidated Income Statement during the year.
56
Fletcher Building Limited Annual Report 2025
Notes to the Consolidated Financial Statements 2025 (Continued)
CONTENTS
18.3 CREDIT RISK
Credit risk is the risk of financial loss to the Group if a customer or counterparty to a financial instrument fails to meet its contractual
obligations. To the extent the Group has a receivable from another party, there is a credit risk in the event of non-performance by that
counterparty and arises principally from receivables from customers, derivative financial instruments and the investment of cash.
(i) Impairment of financial assets
The Group has a credit policy in place under which customers are individually analysed for credit worthiness and assigned a purchase
limit. If no external ratings are available, the Group reviews the customer’s financial statements, trade references, bankers’ references
and/or credit agencies’ reports to assess credit worthiness. These limits are reviewed on a regular basis. Owing to the Group’s industry
spread at balance date, there were no significant concentrations of credit risks in respect of trade receivables. Refer to note 8 for
debtor balances and ageing analysis.
The Group has two types of financial assets that are subject to the expected credit loss model:
−Debtors (including trade debtors, contract debtors and contract retentions) – note 8
−Construction contract assets – note 3
While cash and cash equivalents are also subject to the impairment requirements of NZ IFRS 9 Financial Instruments, the identified
impairment loss was immaterial.
Most goods are sold subject to retention of title clauses, so that in the event of non-payment the Group may have a secured claim.
Credit risks may be further mitigated by registering an interest in the goods sold and the proceeds arising from that supply. The Group
does not otherwise require collateral in respect of trade receivables.
Debtors and construction contract assets
The Group applies the NZ IFRS 9 simplified approach to measuring expected credit losses (ECL) which uses a lifetime expected loss
allowance for all trade receivables and contract assets.
To measure the expected credit losses, trade receivables and contract assets have been grouped based on shared credit risk
characteristics and the days past due. The construction contract assets relate to unbilled work in progress and have substantially
the same risk characteristics as the trade receivables for the same types of contracts. The Group has therefore concluded that the
expected loss rates for trade receivables are a reasonable approximation of the loss rates for the contract assets.
The expected loss rates are based on the payment profiles of historical sales the corresponding historical credit losses experienced
within this period. The historical loss rates are adjusted to reflect current and forward looking information on macroeconomic factors
affecting the ability of the customers to settle the receivables. The Group has identified the GDP and the unemployment rate of the
countries in which it sells its goods and services to be the most relevant factors, and accordingly adjusts the historical loss rates
based on expected changes in these factors.
The table below provides movement in the Group’s expected credit loss provision:
2025
NZ$M
2024
NZ$M
Opening provision for expected credit losses(15)(20)
Increase in provision for doubtful debts recognised in the
Consolidated Income Statement
3 (1)
Receivables written off during the year as uncollectible(4)1
Unused amount reversed2
Reclassified to held for sale3
Closing provision for expected credit losses(16)(15)
Trade receivables and contract assets are written off where there is no reasonable expectation of recovery. Indicators that there is no
reasonable expectation of recovery include, amongst others, the failure of a debtor to engage in a repayment plan with the Group.
Impairment losses on trade receivables and contract assets are presented as net impairment losses in the Consolidated Income
Statement. Subsequent recoveries of amounts previously written off are credited against the same line item.
(ii) Derivative financial instruments and the investment of cash
The Group enters into derivative financial instruments and invests cash with various counterparties in accordance with established
Board approved credit limits as to credit rating and dollar value but does not require collateral or other security except in limited
circumstances. In accordance with the established counterparty limits, there are no significant concentrations of credit risk in respect
of these financial instruments and no loss is expected.
The Group has not renegotiated the terms of any financial assets that would otherwise be overdue or impaired. The carrying amount
of non-derivative financial assets represents the maximum credit exposure. The carrying amount of derivative financial assets is at
their current fair value.
57
Fletcher Building Limited Annual Report 2025
Notes to the Consolidated Financial Statements 2025 (Continued)
CONTENTS
18.4 FAIR VALUES
The estimated fair value measurements for financial assets and liabilities compared to their carrying values in the Consolidated
Balance Sheet, are as follows:
20252024
Classification
Carrying
value
NZ$M
Fair value
NZ$M
Carrying
value
NZ$M
Fair value
NZ$M
Financial assets
Cash and liquid depositsAmortised cost 139 139 311 311
DebtorsAmortised cost 743 743 799 799
Forward exchange contracts – fair value through profit or lossFair value 1 1 2 2
Forward exchange contracts – cash flow hedgeFair value 5 5 1 1
Forward exchange contracts – net investment hedgeFair value
Cross currency interest rate swaps – split designationFair value 26 26 32 32
Cross currency interest rate swaps – cash flow hedgeFair value 11 11 7 7
Interest rate swaps – cash flow hedgeFair value 6 6
Commodity price swaps – cash flow hedgeFair value 8 8 8 8
Total financial assets 933 933 1,166 1,166
Financial liabilities
Creditors and accrualsAmortised cost 1,002 1,002 1,024 1,024
Bank loansAmortised cost 627 627 1,302 1,302
Private placementsAmortised cost 323 339 489 486
Other loansAmortised cost 5 5 20 20
Capital notesAmortised cost 217 211 297 274
Forward exchange contracts – fair value through profit or lossFair value 5 5 1 1
Forward exchange contracts – cash flow hedgeFair value2 2 3 3
Forward exchange contracts – net investment hedgeFair value
Cross currency interest rate swaps – split designationFair value 5 5 13 13
Interest rate swaps – cash flow hedgeFair value10 10 2 2
Commodity price swaps – cash flow hedgeFair value 3 3 1 1
Total financial liabilities2,199 2,209 3,152 3,126
Total financial instruments(1,266)(1,276)(1,986)(1,960)
Fair value measurement
All of the Group’s derivatives are in designated hedge relationships and are measured and recognised at fair value.
All derivatives are level 2 valuations based on accepted valuation methodologies. Forward exchange fair value is calculated using
quoted forward exchange rates and discounted using yield curves derived from quoted interest rates matching maturity of the
contract. The fair value of commodity price swaps is measured using a derived forward curve and discounted using yield curves
derived from quoted interest rates matching the maturity of the contract.
Interest rate derivatives are calculated by discounting the future principal and interest cash flows at current market interest rates
that are available for similar financial instruments.
Level 1 Quoted prices (unadjusted) in active markets for identical assets or liabilities.
Level 2 Inputs that are observable for the asset or liability, either directly (as prices) or indirectly (derived from prices) other
than quoted prices included within level 1.
Level 3 Inputs for the asset or liability that are not based on observable market data (unobservable inputs).
Fair value disclosures
The fair values of borrowings used for disclosure are measured under level 2, by discounting future principal and interest cash flows
at the current market interest rate plus an estimated credit margin that is available for similar financial instruments with a similar credit
profile to the Group.
The interest rates across all currencies used to discount future principal and interest cash flows are between 1.8% and 8.1% (2024: 2.6%
and 10.3%) including margins, for both accounting and disclosure purposes.
58
Fletcher Building Limited Annual Report 2025
Notes to the Consolidated Financial Statements 2025 (Continued)
CONTENTS
Group Structure and Related Parties
This section details the Group’s capital, non-controlling interest of subsidiaries, investments in associates and joint ventures and
information relating to transactions with other related parties.
19. DIVIDENDS AND SHAREHOLDER TAX CREDITS
Dividends
2025
NZ$M
2024
NZ$M
Full year dividend paid October 2023 (16.0 cents per share)124
124
The Board determined that it would not declare a final dividend for the 2025 financial year.
Shareholder tax credits
Imputation and franking credits allow the Company to transfer the benefit from the tax it has paid in New Zealand and Australia
respectively to its shareholders when it pays dividends.
2025
NZ$M
2024
NZ$M
Imputation credit account
Imputation credits at the beginning of the year 3 37
Taxation paid 2 3
Imputation credits attached to dividend paid (37)
Imputation credits available for use in subsequent accounting periods5 3
2025
A$M
2024
A$M
Franking credit account
Franking credits at the beginning of the year 38 38
Franking credits available for use in subsequent accounting periods38 38
20. CAPITAL
Ordinary shares are classified as shareholders’ funds. Costs directly attributable to the issue of new shares or options are shown in
shareholders’ funds as a reduction from the proceeds. Acquired shares are classified as treasury stock and presented as a deduction
from share capital under the treasury stock method, as if the shares are cancelled, until they are reissued or otherwise disposed of.
Issue of shares
On 23 September 2024, Fletcher Building Limited announced a NZ$700 million equity raise comprising a fully underwritten
c.NZ$282 million institutional placement (“Placement”) and c.NZ$418 million pro rata accelerated non-renounceable entitlement offer
(Entitlement Offer). The Placement and Entitlement Offer were fully underwritten. A total of 291,853,776 new shares were issued at
an offer price of NZ$2.40 per share as part of the capital raise, with proceeds of $679 million raised, net of transaction costs. All new
shares issued rank equally in all respects with Fletcher Building’s existing ordinary shares.
2025
NZ$M
2024
NZ$M
Reported capital at the beginning of the year excluding treasury stock2,995 2,993
Issue of shares679
Repurchase of shares
Vested share-based payment6 2
Reported capital at the end of the year excluding treasury stock3,680 2,995
All ordinary shares are issued and fully paid and carry equal rights in respect of voting, dividend payments and distribution upon
winding up.
59
Fletcher Building Limited Annual Report 2025
Notes to the Consolidated Financial Statements 2025 (Continued)
CONTENTS
2025
NZ$M
2024
NZ$M
Number of ordinary shares issued and fully paid
Number of shares on issue at the beginning of the year783,043,596 783,043,596
Issue of shares291,853,776
Total number of shares on issue1,074,897,372 783,043,596
Less shares accounted for as treasury stock(4,303,432)(6,322,384)
1,070,593,940 776,721,212
21. NON-CONTROLLING INTERESTS
Non-controlling interests are allocated their share of profit for the year in the Consolidated Income Statement and are presented
separately within equity in the Consolidated Balance Sheet. The effect of all transactions with non-controlling interests that change
the Group’s ownership interest but do not result in a change in control are recorded in equity.
2025
NZ$M
2024
NZ$M
Share capital9 9
Reserves(4)2
5 11
22. INVESTMENTS IN ASSOCIATES, JOINT VENTURES AND JOINT OPERATIONS
A joint arrangement is an arrangement where two or more parties have joint control. The Group classifies its joint arrangements
as either joint operations or joint ventures depending on the legal, contractual and other rights and obligations.
Equity accounting
Under the equity method of accounting, the investments are initially recognised at cost and adjusted thereafter to recognise the
Group’s share of the post-acquisition profits or losses of the investee in the Consolidated Income Statement, and the Group’s share
of movements of the investee’s other comprehensive income in the Consolidated Statement of Comprehensive Income. Dividends
received or receivable from associates and joint ventures are recognised as a reduction in the carrying amount of the investment.
Where the Group’s share of losses in an equity-accounted investment equals or exceeds its interest in the entity, including any other
unsecured long-term receivables, the Group does not recognise further losses, unless it has incurred obligations or made payments
on behalf of the other entity.
Investment in joint ventures and associates
Investments in associates and joint ventures are measured using the equity method. The equity method has been used for associate
entities over which the Group has significant influence but not control.
Joint operations
The Group recognises its direct right to the assets, liabilities, revenues and expenses of joint operations and its share of any jointly
held or incurred assets, liabilities, revenues and expenses. These have been incorporated in the consolidated financial statements
under the appropriate headings.
2025
NZ$M
2024
NZ$M
Investment by associate/joint venture:
Wespine Industries Pty Ltd70 71
Hexion Australia Pty Ltd 25 24
Altus® NZ Limited80 82
NX2 Hold LP23 24
Other 20 20
218 221
60
Fletcher Building Limited Annual Report 2025
Notes to the Consolidated Financial Statements 2025 (Continued)
CONTENTS
2025
NZ$M
2024
NZ$M
Equity-accounted earnings comprise:
Sales – 100%469 257
Earnings before taxation – 100%4849
Earnings before taxation – Fletcher Building share13 13
Taxation expense(3)(3)
Earnings after taxation – Fletcher Building share10 10
Interest in joint operations
The Group recognises its interest in the assets, liabilities, revenue and expenses of joint operations.
Name of joint operationPrincipal activity
Principal place of
business
2025
%
2024
%
Liveable StreetsMaintenanceAuckland50%50%
P2W Construction JVConstructionAuckland50%50%
Eastern Busway AllianceConstructionAuckland60%60%
Waterview Connection Joint OperationsMaintenanceAuckland23%23%
Kirkbride Alliance ConstructionAuckland56%
Hamilton Expressway ConstructionWaikato61%61%
Mackays to Peka Peka ConstructionWellington75%75%
Transport Rebuild East CoastMaintenance Hawke's Bay33%33%
Ground Improvement ConstructionCanterbury50%
23. RELATED PARTY DISCLOSURES
The disclosures below set out transactions and outstanding balances that Group companies and other related parties have with
each other.
Key management personnel are defined as the Executive Committee and Board of Directors.
2025
Sales to
related parties
NZ$M
Purchases from
related parties
NZ$M
Amounts owing
from related
parties (within
debtors)
NZ$M
Amounts owing
to related parties
(within creditors)
NZ$M
Wespine Industries Pty Ltd and Hexion Australia Pty Ltd 39 7
Altus® NZ Limited 5
NX2 Hold LP(10)
Construction Fiji 5
Others4 12 1
2024
Wespine Industries Pty Ltd and Hexion Australia Pty Ltd 39 5
Altus® NZ Limited 4
NX2 Hold LP19
Others3 13
As at 30 June 2025, the Group held no material cash deposits on behalf of two alliances/joint operations (Mackays to Peka Peka and
Hamilton Expressway). The Group holds 75% and 61% respective interest in these alliances/joint operations.
61
Fletcher Building Limited Annual Report 2025
Notes to the Consolidated Financial Statements 2025 (Continued)
CONTENTS
2025
NZ$M
2024
NZ$M
Key management personnel compensation
Directors' fees2 2
Executive committee remuneration paid, payable or provided for:
Short-term employee benefits13 12
Long-term employee benefits(1)2
Termination benefits4
Fletcher Building Retirement Plan
During the year Fletcher Building Nominees Limited (the New Zealand retirement plan) transferred to members or sold on market all
shares held in Fletcher Building (2024: held $2.1 million of shares).
Other Information
This section provides additional required disclosures that are not covered in the previous sections.
24. CAPITAL EXPENDITURE COMMITMENTS
Capital expenditure commitments are those where future expenditure has been committed at year end, but not recognised
as liabilities as follows:
2025
NZ$M
2024
NZ$M
Committed at year end
Property, plant and equipment and other long-term assets111114
25. CONTINGENT LIABILITIES
Contingent liabilities are possible legal or constructive obligations arising from past events and whose existence will be confirmed
only by occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the Group.
A contingent liability may also be a present obligation arising from past events but is not recognised on the basis that an outflow of
economic resources to settle the obligation is not viewed as probable, or the amount of the obligation cannot be reliably measured.
When the Group has a present obligation, an outflow of economic resources is assessed as probable and the Group can reliably
measure the obligation, a provision is recognised.
The Group, in the normal course of business, may be subject to legal claims and other exposures in respect of which no provision
has been made. Obligations assessed as having probable future economic outflows capable of reliable measurement are recognised
as provisions at reporting date. Matters assessed as having possible future economic outflows, where the outflows are capable of
reliable measurement, are disclosed as contingent liabilities. Contingent liabilities that cannot be reliably quantified are described
but not included in the total amount disclosed below.
Individually significant matters, including narrative on potential future exposures incapable of reliable measurement, are disclosed
below, to the extent that disclosure does not prejudice the Group.
Guarantees
In certain circumstances, the Group guarantees the performance of particular business units in respect of their obligations. This
includes bonding and bank guarantee facilities used primarily by the construction business as well as performance guarantees for
certain of the Group’s subsidiaries.
Contingent liabilities in relation to guarantees, quantifiable claims and others
2025
NZ$M
2024
NZ$M
Contingent liabilities with respect to guarantees extended on trading transactions,
performance bonds and other transactions
241426
Contingent liabilities with respect to quantifiable claims3030
271456
62
Fletcher Building Limited Annual Report 2025
Notes to the Consolidated Financial Statements 2025 (Continued)
CONTENTS
Class action proceedings: Western Australia plumbing failures
On 6 August 2024, the Group announced that a class action proceeding had been filed in the Federal Court of Australia against
Iplex® Pipelines Australia (Iplex® Australia), on behalf of persons, Australia-wide, who acquired polybutylene pipes manufactured by
Iplex® Australia composed of a resin known as Typlex-1050. The class action alleges that the Pro-fit product was not of acceptable
quality at the time of supply and seeks a broad range of damages (unquantified), including: costs of removing, repairing, replacing
and disposing of the affected pipe; repair costs and/or possession damaged by the affected pipe; reduction in property value,
vexation, distress and disappointment. Iplex® Australia is defending the action and has brought cross-claims against certain WA
builders and plumbers.
On 27 August 2024, the Group announced that Western Australian home builder, BGC, had filed legal proceedings against Iplex®
Australia in relation to the Pro-Fit pipes issues, making similar allegations to those raised in the class action. Iplex® Australia is
defending the BGC proceedings.
The proceedings are both currently in the discovery phase and are expected to remain in that phase for at least the rest of this
calendar year.
The outcome of both these proceedings and associated liabilities, if any, remains uncertain at the date of this report. Ultimately,
if Iplex® Australia is found to bear full or part responsibility for the amounts claimed, the cost to it in meeting any damages claims
could have a material impact on the Group’s financial position. It is not practicable as at 30 June 2025 to provide an estimate of
the financial effect, including any quantum of costs or any penalty, or the timing of their incurrence, and disclosure of any possible
impact would be materially prejudicial to the Group’s commercial interests.
Commerce Commission Winstone Wallboards® proceedings
On 1 November 2024, the Group announced that the New Zealand Commerce Commission had filed legal proceedings against
Winstone Wallboards®, seeking declarations that Winstone Wallboards® contravened the Commerce Act 1986 in relation to its
historical use of volume rebates, together with associated civil pecuniary penalties. The volume rebates were discontinued by
Winstone Wallboards® in 2022.
Winstone Wallboards® does not believe that its previous use of volume rebates, which are widespread in the industry, breached
the Commerce Act and is defending the proceedings. The proceedings are at a relatively early stage and the claims made by the
Commission cannot be quantified at this time. As at 30 June 2025, it is not practicable to provide, in relation to these proceedings:
(a) an estimate of financial effect; (b) an indication of the uncertainties in relation to the amount or timing of any outflow; or (c) the
possibility of any pecuniary penalty.
Class action proceedings: Building + Interiors disclosures
On 13 March 2023, the Group announced that class action proceedings had been filed against it in the Supreme Court of Victoria
making allegations that between 17 August 2016 and 23 October 2017 the Group misrepresented the performance and financial
position of its Building + Interiors (B+I) business and failed to disclose information as to its true financial position. The claim is
brought on behalf of shareholders who acquired an interest in fully paid ordinary shares in the Group on the Australian Securities
Exchange or NZX Main Board between those dates. The Group is defending the proceedings. Based on current status of the
proceedings, the claims made on behalf of shareholders have not yet been and are not required to be quantified. As at 30 June
2025, it is not practicable to provide: (a) an estimate of the financial effect; (b) an indication of the uncertainties relating to the
amount or timing of any outflow; or (c) the possibility of any reimbursement.
Construction defects
As part of its business, the Group’s Construction division has exposure for defects in construction projects post their completion.
That exposure arises either from the terms of the relevant contract or at law. As at 30 June 2025, the Group was subject to claims of
this type. In assessing them, the Group has applied estimates and judgements, including assessing the merits of the claim, the cost
to repair and the likelihood of receipt of payment or other recovery. These estimates and judgements may change as the claim or
repair work progresses. The Group has considered its exposure to the claims received to date and, where it considers appropriate
to do so, has provided for them. There remains a risk that, ultimately, the final exposure of the Group to these claims will be greater
than the amount allowed.
26. TAXATION
The provision for current tax is the estimated amount due for payment during the next 12 months by the Group. The provision for
deferred tax has been calculated using the balance sheet liability method.
Deferred tax is recognised on tax losses, tax credits and on the temporary difference between the carrying amount of assets and
liabilities and their taxable value where recovery is considered probable. Deferred tax is not recognised on the following temporary
differences:
−The initial recognition of goodwill; and
−The initial recognition of asset and liabilities for a transaction that is not a business combination and, at the time of the
transaction, affects neither the accounting nor taxable profit or loss.
There are no significant deferred tax liabilities in respect of the undistributed profits of subsidiaries and associates.
Judgements are required about the application of income tax legislation. These judgements and assumptions are subject to risk and
uncertainty as there is a possibility of future changes in the interpretation and/or application of tax legislation. This may impact the
amount of current and deferred tax assets and liabilities recognised in the Consolidated Balance Sheet and the amount of other tax
losses and temporary differences not yet recognised. In such circumstances, some or all of the carrying amounts of recognised tax
assets and liabilities may require adjustment, resulting in a corresponding credit or charge to the Consolidated Income Statement.
63
Fletcher Building Limited Annual Report 2025
Notes to the Consolidated Financial Statements 2025 (Continued)
CONTENTS
The Organisation for Economic Co-operation and Development’s (OECD)/G20 Inclusive Framework on Base Erosion and Profit
Shifting (BEPS) addresses the tax challenges arising from the digitalisation of the global economy. The BEPS Pillar Two model rules
seek to apply a 15% global minimum tax across all jurisdictions and will apply to the Group from 1 July 2024, being the Australian
domestic implementation date. The rules are not expected to have a material impact as the Group does not have significant
operations in low-tax jurisdictions. The Group has applied the exception to recognising and disclosing information about deferred
tax assets and liabilities related to Pillar Two income taxes.
Below is the reconciliation of earnings before taxation to taxation expense:
2025
NZ$M
2024
NZ$M
Losses before taxation - continuing operations(432)(24)
Taxation at 28 cents per dollar(121)(7)
Adjusted for:
Difference in tax rates(3)
Non-assessable income(7)(5)
Non-deductible expenses66 34
Tax losses for which no deferred tax asset was recognised
Tax in respect of prior years(2)(1)
Removal of building depreciation 34
Tax (benefit)/expense on earnings - continuing operations(67)55
Income tax expense on continuing operations is attributable to:
Tax on earnings before Significant Items58 119
Tax benefit on Significant Items(125)(64)
Tax (benefit)/expense on earnings - continuing operations(67)55
Income tax expense on discontinued operation is attributable to:
Tax on earnings before Significant Items1
Tax benefit on Significant Items(2)(15)
Tax benefit on earnings - discontinued operation(2)(14)
Income tax expense is attributable to:
Total current taxation expense (3)
Total deferred taxation benefit(69)44
Tax (benefit)/expense on earnings(69)41
Current tax assets/(liabilities)
Included within the Consolidated Balance Sheet as follows:
Current tax assets29 28
Current tax liabilities
29 28
Movement in current tax assets during the year:
Opening provision for current tax assets28 6
Current period tax benefit(8)(10)
Prior period adjustments8 13
Non-controlling interest share of taxation expense1
Tax recognised directly in reserves 1 1
Net tax payments15
Other tax movements3
Currency movement(1)
29 28
64
Fletcher Building Limited Annual Report 2025
Notes to the Consolidated Financial Statements 2025 (Continued)
CONTENTS
2025
NZ$M
2024
NZ$M
Provision for deferred tax assets
Included within the Consolidated Balance Sheet as follows:
Deferred tax assets209 136
209 136
Movement in deferred tax assets during the year:
Opening deferred tax assets136 193
Current period deferred tax benefit75 3
Prior period adjustment(3)(13)
Removal of building depreciation(34)
Tax recognised directly in reserves 2 3
Reclassification to held for sale(17)
Currency movement(1)1
209 136
Composed of:
Provisions and other liabilities146 101
Inventories14 15
Debtors5 4
Property, plant and equipment(67)(68)
Brands(63)(69)
Tax losses117 91
Right-of-use assets(345)(326)
Lease liabilities408 393
Other(6)(5)
209 136
The net deferred tax assets balance of $209 million at 30 June 2025 (2024: $136 million) largely comprises New Zealand and Australia
carried forward tax losses incurred in the current and prior periods, timing differences on the Group's provisions and net deferred tax
assets on the Group's right-of-use assets/liabilities. It is expected there will be sufficient future earnings in New Zealand and Australia
to utilise the deferred tax assets in each of these jurisdictions.
Removal of building depreciation (New Zealand)
In the last financial year, the New Zealand Government passed legislation to remove commercial building depreciation for tax
purposes, the main asset impacted by the new legislation was the Winstone Wallboard®’s recently commissioned plasterboard plant
in Tauriko (Bay of Plenty, New Zealand). As a result, the Group’s deferred tax liabilities increased by $34 million with an one-off tax
expense of $34 million recognised in the year ended 30 June 2024, as the tax base of the Group’s buildings in New Zealand reduced
to nil.
27. RETIREMENT PLANS
Fletcher Building Limited is the principal sponsoring company of a plan that provides retirement and other benefits to employees of
the Group in New Zealand and Australia. Participation in this plan has been closed for a number of years, although defined contribution
savings plans have been made available.
The Group’s plan assets and liabilities in respect of individual defined benefit retirement plans are calculated separately for each
plan by an independent actuary, as being the fair value of the plan’s assets less the present value of the future obligations to the
members. The value of the asset recognised cannot exceed the present value of any future refunds from the plans or reductions
in future contributions to the plans, unless a constructive right to a refund of the surplus exists, in which case the amount to be
refunded is recognised as an asset. In the Group’s balance sheet, plans that are in a surplus position are not offset with plans that
are in a liability position. The refund of the New Zealand surplus is subject to Financial Markets Authority (FMA) approval under
FMCA 2013 Section 177.
65
Fletcher Building Limited Annual Report 2025
Notes to the Consolidated Financial Statements 2025 (Continued)
CONTENTS
Principal assumptions made in the actuarial calculation of the defined benefit obligation relate to the discount rate, rate of salary
inflation and life expectancy. The calculation of the defined benefit obligations are based on years of service and the employees’
compensation during their years of employment. Contributions are intended to provide not only for benefits attributed to service to
date but also for those expected to be earned in the future. A discount rate of 4.52% has been applied in 2025 on benefit obligations
(2024: 4.82%). In applying sensitivity analysis, a 1% lower discount rate assumption increases the defined benefit obligation by
$11 million (2024: $12 million), whilst adding one additional year of life expectancy of scheme members decreases the obligation
by $7 million (2024: $7 million increase).
The following table provides the weighted average assumptions used to develop the net periodic pension cost and the actuarial
present value of projected benefit obligations for the Group’s plans:
2025
%
2024
%
Assumed discount rate on benefit obligations4.524.82
Annual rate of increase in future compensation levels2.302.39
Fletcher Building Limited has an obligation to ensure that the funding ratio of the New Zealand plan’s assets is at least 115% of the
plan’s actuarial liability. At 31 March 2025, the value of the plan assets was 210% of the actuarial liability and the funded surplus was
$153 million (31 March 2024: 199%, $146 million).
During the year, the Group obtained High Court approval for amendments to the Pension Plan Trust Deed. These permit the Trustees
to grant discretionary additional benefits of up to one month’s pension annually, conditional on maintaining a minimum post-payment
funding ratio of 140%. The amendments also clarified that any residual surplus on wind-up remains attributable to the Company
subject to FMA approval. The resulting $10 million actuarial impact has been recognised in Other Comprehensive Income, with
no material change in the net defined benefit asset.
During the year the Group contributed less than $1 million (2024: less than $1 million) in respect of its Australian defined benefit plans.
The Group is currently not contributing to the New Zealand plan. It contributed $56 million (2024: $51 million) in respect of its defined
contribution plans worldwide, including Kiwisaver and Australia Superannuation.
2025
NZ$M
2024
NZ$M
Recognised net asset
Assets of plans363367
Projected benefit obligation(213)(215)
Funded surplus150152
Asset ceiling effect
Recognised net asset150152
Movement in recognised net asset
Recognised net asset at the beginning of the year152126
Actuarial movements for the year(7)21
Net periodic pension cost55
Recognised net asset150152
Assets of the plans
Assets of plans at the beginning of the year367348
Actual return on assets2538
Total contributions12
Benefit payments(30)(20)
Currency translation(1)
363367
66
Fletcher Building Limited Annual Report 2025
Notes to the Consolidated Financial Statements 2025 (Continued)
CONTENTS
2025
NZ$M
2024
NZ$M
Assets of the plans consist of:
Australasian equities2730
International equities103141
Property220
Bonds164109
Cash and short-term deposits4847
Other assets1920
363367
Projected benefit obligation
Projected benefit obligation as at the beginning of the year(215)(222)
Service cost(2)(2)
Interest cost(10)(10)
Past service cost/curtailments
Actuarial loss arising on changes in demographic assumptions(10)(1)
Member contributions(1)
Actuarial gain arising on changes in financial assumptions(3)
Actuarial loss arising on other assumptions - experience adjustments(3)(1)
Benefit payments29 20
Currency translation2 1
(213)(215)
Net periodic pension cost
Service cost(2)(2)
Net interest income76
Net periodic pension benefit – recognised in earnings before interest and taxation54
28. SHARE-BASED PAYMENTS
The Group has a number of employee incentive schemes, and whilst some are offered to all employees, others are offered only
to specific individuals.
All schemes are equity-settled share-based payment arrangements, accounted for under NZ IFRS 2 Share-based Payments and are
measured at fair value at grant date. The fair value of shares or options granted to employees is recognised as an employee expense
in the Consolidated Income Statement over the restrictive period, with the restrictive period being the period over which the service
requirement of the particular scheme is met, with a corresponding increase in the employee share-based payment reserve.
When shares or options vest and shares are awarded to employees, the amount in the share-based payment reserve relating to those
instruments is transferred to share capital. When share-based payments do not vest as a result of market conditions not being met,
the amount in the share-based payment reserve is reclassified to retained earnings. When share-based payments do not vest due
to a performance condition not being met, any amount previously recognised is released to the Consolidated Income Statement.
Long-term incentive (LTI) share scheme
The Group has a long-term share-based performance incentive scheme targeted at selected employees most able to influence the
results of the Group (invited to participate at the discretion of the Company). The aim is to drive long-term, sustainable results and
create shareholder value by aligning our most senior people with the shareholders’ interests, ensuring value is only created for our
people where relative Total shareholder Return (TSR) is realised.
The long-term share scheme allows scheme participants to acquire shares in the Company at market price (i.e. face value at the time
of grant), funded by an interest-free loan from the Group. The scheme participants are entitled to vote on the shares and to receive
cash dividends, the proceeds of which are used to reduce the loan. The shares are held in trust for the scheme participants by the
Trustee, Fletcher Building Share Schemes Limited.
67
Fletcher Building Limited Annual Report 2025
Notes to the Consolidated Financial Statements 2025 (Continued)
CONTENTS
Entitlement under the scheme is dependent upon the Group’s TSR exceeding the 51st percentile of the TSR of the comparator Group
over a three-year restricted period. Scheme participants can elect to extend the restrictive period for an additional year if the Group’s
TSR means that the vesting level is between the 51st and 75th percentile of the comparator Group. The three-year restrictive period is
automatically extended for an additional year if the minimum vesting threshold is not met.
At the end of the restrictive period or any extension, the Group will pay a bonus to the executives to the extent that performance
hurdles have been met, the after-tax amount of which will be generally sufficient for the scheme participants to repay the balance
of the loan in respect of the shares which are to be transferred.
If the performance hurdles are not met or are only partially met and the shares do not transfer to the scheme participants, the amount
in the share-based payments reserve will remain in equity and will not be released to earnings, with the trustee acquiring the beneficial
interest in some or all of the relevant shares. The loan provided in respect of those shares which do not transfer to the scheme
participants (the forfeited shares) will be novated to the trustee and will be fully repaid by the transfer of the forfeited shares.
During the 2022 year, there was an introduction of a return on funds employed (ROFE) measure in addition to the current relative total
shareholder return (rTSR) measure. The use of ROFE in the LTI share scheme aligns to the Group’s focus on performance and growth.
The weighting of rTSR has been adjusted from 100% to 50% with ROFE sitting at 50%. For both measures, 0% vests at threshold and
100% at maximum (i.e. up to 50% for each measure) with straight-line vesting in between. All grants from 2022 onwards do not include
the opportunity to extend the restrictive period.
The following are details with regard to the scheme:
2024
Award
2023
Award
2022
Award
2021
Award
Grant date1 September 20241 September 20231 September 20221 July 2021
Number of shares granted1,302,514745,440616,654395,085
Market price per share at grant date$2.96$4.88$5.61$7.48
Total value at grant date (NZ$)$3,855,441$3,637,747$3,459,429$2,955,236
Vesting date31 August 202731 August 202631 August 202530 June 2024
Number of shares:
Number of shares originally granted1,302,514745,440616,654395,085
Less forfeited over life of scheme(81,107)(298,021)(137,782)(309,032)
Less vested over life of scheme
Number of shares held at 30 June 20251,221,407447,419478,87286,053
Cumulative number of shares held2,233,7511,012,344564,92586,053
* As of 1 July 2025, the 2021 award scheme did not vest.
2025
NZ$M
2024
NZ$M
Total fair value expense in year for LTI(1)2
Amount recognised at year end in the share based payment reserve510
Fair value has been determined using Monte Carlo valuation methodology.
Deferred short-term incentive (STI) plan
A senior short-term incentive (STI) share-based payment scheme has been put in place for selected senior employees (invited to
participate at the discretion of the Company), which is recognised on the achievement of the Group and individual performance
objectives using a balanced scorecard. The aim is to align the financial interests of participating senior employees with the Company’s
shareholders and recognise the differing priorities, and development phases in which our businesses are operating through individual
targets and measures.
The scheme grant date is 1 July each year, with 1 July 2021 being the first scheme offered. Following the release of the final audited
financial year results, the selected employees STI’s are split between a cash payment and a deferred STI portion entitling the employee
to share rights. Achievement is calculated based on various non-market conditions specific to the individual, safety goals, as well as
financial goals and is performed one year after grant date, generally in September, with the cash component settled at this time. The
share rights portion of award convert into Fletcher Building ordinary shares two years from achievement date, where the number of
share rights awarded are determined based on the share price at 30 June, one year after grant date. For most employees, the award
is subject to the participant remaining employed with the Group for three years.
2025
NZ$M
2024
NZ$M
Total fair value expense in year for deferred STI(1)3
68
Fletcher Building Limited Annual Report 2025
Notes to the Consolidated Financial Statements 2025 (Continued)
CONTENTS
Employee retention share scheme
The employee retention share scheme is a one-off share-based arrangement granted to certain senior management and executives as
a targeted retention measure. The total fair value expense recognised in respect of this scheme was less than $500,000 in each of the
two financial years presented.
Employee share purchase scheme - FBuShare
FBuShare is Fletcher Building’s employee share purchase scheme available to all eligible Group employees. The plan aims to connect
our people with our performance, and to promote employee engagement and retention. Employees purchase shares (purchased
shares) at market prices in the Group and, if they continue to be employed after a three-year qualification period, they become entitled
to receive one bonus award share for every two shares purchased in the first year of each qualification period and still owned at the
end of that period. FBuShare does not require any performance criteria to be met. FBuShare has a minimum contribution rate of
NZ$250 per annum and a maximum contribution rate of NZ$5,000 per annum (or the equivalent currency in other countries) of the
employees after-tax pay. Directors are not eligible to participate in FBuShare.
Dividends paid will be re-invested in additional shares. Employees will receive award shares on any additional shares, subject to the
same conditions set out above. The employees are responsible for any income tax liability payable on dividends and on the value of
any award shares.
At the end of each three-year qualification period, employees may continue to hold any purchased, additional and award shares or
they may sell some or all of the shares.
During the year, approximately 0.7 million award shares vested. At 30 June 2025, approximately 1.9 million shares would be required
to satisfy the obligation to provide award shares to FBuShare participants based on the purchased share balances.
2025
NZ$M
2024
NZ$M
Total fair value expense in year for employee share purchase scheme2
69
Fletcher Building Limited Annual Report 2025
Notes to the Consolidated Financial Statements 2025 (Continued)
CONTENTS
Independent auditor’s report to the shareholders of Fletcher Building Limited
Report on the audit of the financial statements
Opinion
We have audited the financial statements of Fletcher Building Limited (the “Company”) and its subsidiaries (together the
“Group”) on pages 5 to 69, which comprise the consolidated balance sheet of the Group as at 30 June 2025, and the
consolidated income statement, consolidated statement of comprehensive income, consolidated statement of movements
in equity and consolidated statement of cash flows for the year then ended of the Group, and the notes to the consolidated
financial statements including material accounting policy information.
In our opinion, the consolidated financial statements on pages 5 to 69 present fairly, in all material respects, the
consolidated financial position of the Group as at 30 June 2025 and its consolidated financial performance and cash flows
for the year then ended in accordance with New Zealand Equivalents to International Financial Reporting Standards and
International Financial Reporting Standards.
This report is made solely to the Company’s shareholders, as a body. Our audit has been undertaken so that we might
state to the Company’s shareholders those matters we are required to state to them in an auditor’s report and for no
other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the
Company and the Company’s shareholders, as a body, for our audit work, for this report, or for the opinions we have formed.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (New Zealand). Our responsibilities under
those standards are further described in the Auditor’s responsibilities for the audit of the financial statements section of
our report.
We are independent of the Group in accordance with Professional and Ethical Standard 1 International Code of Ethics
for Assurance Practitioners (including International Independence Standards) (New Zealand) issued by the New Zealand
Auditing and Assurance Standards Board, and we have fulfilled our other ethical responsibilities in accordance with these
requirements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Ernst & Young provides agreed upon procedures, taxation compliance, financial statement preparation services and limited
financial due diligence to the Group. Partners and employees of our firm may deal with the Group on normal terms within
the ordinary course of trading activities of the business of the Group. We have no other relationship with, or interest in,
the Group.
Key audit matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the
consolidated financial statements of the current year. These matters were addressed in the context of our audit of the
consolidated financial statements as a whole, and in forming our opinion thereon, but we do not provide a separate opinion
on these matters. For each matter below, our description of how our audit addressed the matter is provided in that context.
We have fulfilled the responsibilities described in the Auditor’s responsibilities for the audit of the financial statements section
of the audit report, including in relation to these matters. Accordingly, our audit included the performance of procedures
designed to respond to our assessment of the risks of material misstatement of the financial statements.
The results of our audit procedures, including the procedures performed to address the matters below, provide the basis
for our audit opinion on the accompanying consolidated financial statements.
70
Fletcher Building Limited Annual Report 2025
CONTENTS
Independent Auditor’s Report
Long-term fixed price construction contracts
Why significantHow our audit addressed the key audit matter
A substantial amount of the Group's revenue
relates to revenue from construction contracts.
Where these contracts are fixed price and have
a long-term duration, revenue and margin
are recognised over time as the services are
performed. This is calculated based on the
proportion of total costs incurred at the reporting
date compared to the Group's estimation of
total costs of the contract, applied to the total
expected revenue from the relevant contract.
Expected revenue comprises fixed contractual
revenue and, where relevant, other amounts such
as variations due to scope changes or extension
of time claims. Where the unavoidable costs of
meeting the obligations under a contract exceed
the economic benefits expected to be received
under that contract, an onerous contract provision
is recorded for the difference between these
amounts.
There is a high level of management judgement
and estimation involved in accounting for the
Group's fixed price and long-term construction
contracts, in particular relating to:
• initial forecasting of total cost to complete,
and revisions to these forecast costs as a result
of events or conditions that occur during the
performance of the contract or are expected to
occur to complete the contract;
• the recognition of variable consideration
based on an assessment by the Group as to
whether it is highly probable that the amount
will be approved by the customer and therefore
recovered; and
• the estimation of the unavoidable cost and
economic benefits expected when a contract
has become onerous.
Disclosures regarding the Group's construction
contracts are included in notes 2.2, 3, 4 and 11
of the financial statements.
In obtaining sufficient appropriate audit evidence, we:
• confirmed our understanding of the Group's processes regarding
accounting for contract revenues and costs. We tested selected
controls including:
−the performance of monthly project reviews, which involves
management assessing key aspects of contract performance
and forecasting;
−the project reviews undertaken by divisional and Group
management, where relevant; and
−controls related to contract costs incurred in the year.
• Selected a sample of contracts for testing based on a number
of quantitative and qualitative factors. These qualitative factors
included known or expected to be onerous contracts, those with
significant deterioration of forecast margin, significant unapproved
variations and/or claims and other factors which might indicate
a greater level of judgement was required by the Group. For the
contracts selected, where relevant and appropriate, we:
−read the key contract terms and conditions to evaluate and
address any identified risks arising from the specific contract
type;
−sample tested the estimated costs to complete, where material,
by agreeing or comparing key forecast cost assumptions to
underlying evidence such as subcontractor quotes, historical
costs, employment records or agreements with subcontractors;
−evaluated the Group's ability to forecast total cost to complete
by analysing the accuracy of previous forecasts relative to actual
outcomes or to current estimates of cost to complete, assessing
the reason for any changes to the estimate;
−read and considered external legal and construction experts'
reports to identify factors which might influence the recognition
of variable consideration or liquidated or other damages
included in management's assessment of the least net cost to
fulfil onerous contracts;
−compared variable consideration to supporting documentation
taking into account relevant contractual terms, and where
appropriate, executive leadership team and Board approvals;
−evaluated project revenues on a sample basis against claims
certified by the customer;
−evaluated contract performance in the period since year
end to the date of this report to assess the Group's year end
judgements in respect of revenue recognition and forecast
costs to complete;
−evaluated any insurance recoveries relevant to the expected
value of onerous contract provisions; and
• considered the adequacy of the associated disclosures in the
financial statements including whether they appropriately describe
the assumptions made and uncertainties in estimating the onerous
contract provisions.
71
Fletcher Building Limited Annual Report 2025
Independent Auditor’s Report (Continued)
CONTENTS
Provisions – Iplex® Australia Industry Response
Why significantHow our audit addressed the key audit matter
In November 2024, the Group recognised a
provision in relation to Iplex® Australia Industry
Response with a balance of $154m reported as at
30 June 2025.
NZ IAS 37 Provisions, Contingent Liabilities and
Contingent Assets provides criteria for recognition
of liabilities for such matters. The application of
this standard required significant judgement in
determining whether a present obligation existed
at balance date, whether the provision could
be reliably measured and measurement of the
recorded provision.
There is complexity in relation to the assessment
of this matter and uncertainty as to the outcome
and quantification of associated future economic
outflow. Accordingly, we considered this to be a
key audit matter.
Disclosures regarding the provision recognised
are included in notes 2.2 and 25 of the financial
statements.
In obtaining sufficient appropriate audit evidence, we:
• evaluated the Group’s assessment as to whether a present
obligation exists arising from past events based on the available
facts and circumstances;
• in order to assess the facts and circumstances:
−inspected the agreement with the West Australian government
and where appropriate held discussions with the Group’s
internal and external legal counsel;
−held discussions with management, reviewed Board and Audit &
Risk Committee papers, and attended Audit and Risk Committee
meetings to understand progress on the matter; and
−considered the underlying documentation prepared by the
Group’s external specialists and other relevant documents;
• evaluated the competence, capabilities and objectivity of the
Group’s external specialists;
• involved our EY actuarial specialists to assess the appropriateness
of the methodology adopted by management’s specialist to
determine the leak rate;
• evaluated the methodology adopted to calculate the provision in
accordance with Accounting Standards, and assessed whether the
assumptions such as leak rate, leak mix, costs incurred to date and
estimated amounts were reasonable; and
• considered the adequacy of the associated disclosures in the
financial statements including whether they appropriately describe
the assumptions made and uncertainties in estimating the product
claim provision.
72
Fletcher Building Limited Annual Report 2025
Independent Auditor’s Report (Continued)
CONTENTS
Goodwill and intangible assets with indefinite useful lives impairment assessment
Why significantHow our audit addressed the key audit matter
The Group holds goodwill and intangible assets
with indefinite useful lives of $656 million at 30
June 2025. Impairments totalling $214 million have
been recognised during the year ended 30 June
2025.
The recoverable amount of the Group’s Cash
Generating Units with Goodwill (“CGUs”) is
determined each reporting period by reference
to valuations prepared using discounted cash
flow models (“DCF models”). DCF models contain
significant judgement and estimation in respect
of future cash flow forecasts, discount rate and
terminal growth rate assumptions. Changes
in certain assumptions can lead to significant
changes in the assessment of the recoverable
amount.
Disclosures regarding the Group’s key assumptions
adopted and the sensitivity to reasonably possible
changes in key assumptions which could result in
impairment for higher risk CGUs are included in
note 2.3 of the financial statements.
Disclosures regarding the Group’s impairment
recognised are included in notes 2.2, 2.3 and 14
of the financial statements.
In obtaining sufficient appropriate audit evidence, we:
• understood the Group's goodwill and intangible assets with
indefinite useful lives impairment assessment process and
identified relevant controls;
• assessed the Group's determination of CGUs and those CGUs
considered to have a higher likelihood of impairment based on
our understanding of the nature and financial performance of the
Group's business units;
• obtained the Group's DCF models and, for those CGUs with a
higher likelihood of impairment, compared earnings before interest
and tax forecasts to the Board approved FY26 budget;
• assessed key inputs to the DCF models including future cash flow
forecasts, allocation of corporate costs, discount rates and terminal
growth rates;
• considered the accuracy of previous Group cash flow forecasting
to inform our evaluation of forecasts included in the DCF models;
• for those CGUs with a higher likelihood of impairment, involved
our valuation specialists to assess the Group's discount and
terminal growth rates. Our valuation specialists were also involved
in benchmarking the Group's assessed recoverable amounts with
relevant market multiples and assessing the clerical accuracy of
the DCF models;
• performed sensitivity analysis in relation to the discount rate,
terminal growth rate and forecast cash flows to consider
the potential impact of changes in these assumptions to the
recoverable amounts;
• for the CGUs where goodwill and intangible assets with indefinite
useful lives were determined to be impaired and an impairment
was recognised, we assessed the output of the DCF models against
the carrying value of the CGUs to assess the calculation of the
impairment recognised; and
• considered the adequacy of the associated disclosures in the
financial statements particularly focusing on the disclosure of the
CGUs where the impairment assessment is sensitive to reasonably
possible changes in assumptions and the disclosure related to the
CGUs where an impairment has been recognised.
73
Fletcher Building Limited Annual Report 2025
Independent Auditor’s Report (Continued)
CONTENTS
Information other than the financial statements and auditor’s report
The directors of the Company are responsible for the other information. The other information comprises the annual report,
which includes the Climate Statement but does not include the financial statements and our auditor’s report thereon.
We obtained the annual report other than the Climate Statement prior to the date of this auditor’s report. The Climate
Statement is expected to be made available to us after the date of this report.
Our opinion on the consolidated financial statements does not cover the other information and we do not express any form
of assurance conclusion thereon.
In connection with our audit of the consolidated financial statements, our responsibility is to read the other information and,
in doing so, consider whether the other information is materially inconsistent with the consolidated financial statements or
our knowledge obtained during the audit, or otherwise appears to be materially misstated.
If, based upon the work we have performed on the other information that we obtained prior to the date of this auditor’s
report, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard. When we read the Climate Statement, if we conclude that there is a material
misstatement therein, we are required to communicate the matter to those charged with governance and, if uncorrected,
to take appropriate action to bring the matter to the attention of users for whom our auditor’s report was prepared.
Directors’ responsibilities for the financial statements
The directors are responsible, on behalf of the entity, for the preparation and fair presentation of the consolidated financial
statements in accordance with New Zealand Equivalents to International Financial Reporting Standards and International
Financial Reporting Standards, and for such internal control as the directors determine is necessary to enable the
preparation of financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the consolidated financial statements, the directors are responsible for assessing on behalf of the entity the
Group’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the
going concern basis of accounting unless the directors either intend to liquidate the Group or cease operations, or have
no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are
free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion.
Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with
International Standards on Auditing (New Zealand) will always detect a material misstatement when it exists. Misstatements
can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be
expected to influence the economic decisions of users taken on the basis of these consolidated financial statements.
A further description of the auditor’s responsibilities for the audit of the financial statements is located at the External
Reporting Board’s website: https://www.xrb.govt.nz/standards/assurance-standards/auditors-responsibilities/audit-
report-1-1/. This description forms part of our auditor’s report.
The engagement partner on the audit resulting in this independent auditor’s report is Graeme Bennett.
Chartered Accountants
Auckland
20 August 2025
74
Fletcher Building Limited Annual Report 2025
Independent Auditor’s Report (Continued)
CONTENTS
1. CORPORATE GOVERNANCE
Fletcher Building’s Corporate Governance Statement, current as at 20 August 2025, is available on the Group’s website at
https://fletcherbuilding.com/investor-centre/corporate-governance.
During the financial year ended 30 June 2025, Fletcher Building followed all of the recommendations in the NZX Corporate
Governance Code dated January 2025 other than in the following respects (as approved by the Board):
Code PrincipleCode recommendationKey differenceCommentary
Principle 8:
The board should
respect the rights of
shareholders and foster
constructive relationships
with shareholders that
encourage them to
engage with the issuer.
If seeking additional equity
capital, issuers of quoted equity
securities should offer further
equity securities to existing
equity security holders of the
same class on a pro rata basis,
and on no less favourable terms,
before further equity securities
are offered to other investors.
In September 2024,
the Company raised
$700 million of capital
by way of a $282 million
institutional placement
and a $418 million
pro rata accelerated
non renounceable
entitlement offer.
The Offer Document dated 23 September 2024
sets out at section 8 the reasons why the Board
chose to raise capital through an accelerated
non renounceable entitlement offer (ANREO).
In concluding that the ANREO structure was
in the best interests of Fletcher Building,
the Board obtained independent expert
investment banking advice in relation to
the merits of the offer and considered:
(a) the fairness of the structure to
shareholders; and (b) the benefits of the
ANREO structure such as better pricing,
allocation flexibility and execution certainty.
A copy of the Offer Document is available
on the NZX and ASX websites.
Principle 5:
The remuneration of
directors and executives
should be transparent,
fair and reasonable.
An issuer should disclose the
remuneration arrangements in
place for the CEO in its annual
report. This should include
disclosure of the base salary,
short term incentives and
long term incentives and the
performance criteria used to
determine performance based
payments.
The full detail of the
Company’s Managing
Director are not set out
in this annual report.
The remuneration arrangements of the
Company’s Managing Director will be set
out in the Remuneration Report that will be
made available to shareholders on the Group’s
website in connection with the Company’s
2025 Notice of Annual Shareholders’ Meeting.
2. CLIMATE-RELATED DISCLOSURES
Fletcher Building’s 2024 Climate Statements are available on the Group’s website at https://fletcherbuilding.com/sustainability/
sustainability-reports-publications-and-policies. Fletcher Building will release its 2025 Climate Statement on the Group’s website by
31 October 2025, in accordance with applicable reporting requirements.
75
Fletcher Building Limited Annual Report 2025
CONTENTS
Mandatory Disclosures
3. DIRECTORS
The table below sets out the names of the directors of Fletcher Building as at 30 June 2025.
The Board considers that all of the directors are independent other than Andrew Reding. Andrew Reding is considered by the Board
to be a non independent director because he is employed as the Managing Director and Chief Executive Officer of Fletcher Building.
In summary ‘independence’ means that the director is not an employee and does not have any direct or indirect position, association
or relationship that could reasonably influence, or could reasonably be perceived to influence, in a material way, the director’s
capacity to:
(a) bring an independent view to decisions in relation to Fletcher Building; or
(b) act in the best interests of Fletcher Building; or
(c) represent the interests of Fletcher Building’s financial product holders generally,
including having regard to the factors described in the NZX Corporate Governance Code that may impact on director independence,
if applicable.
DirectorRole
Peter CrowleyIndependent Chair
Cathy QuinnIndependent director
Sandra DoddsIndependent director
Tony DragicevichIndependent director
Andrew RedingNon independent Managing Director
Jacqui CoombesIndependent director
James MillerIndependent director
Barbara Chapman resigned as a director with effect from 30 April 2025.
76
Fletcher Building Limited Annual Report 2025
Mandatory Disclosures (Continued)
CONTENTS
DIRECTOR ATTENDANCE AT BOARD AND COMMITTEE MEETINGS
The table below shows directors’ attendance at the Board and Committee meetings during the year ended 30 June 2025.
Board
Audit & Risk
Committee
(ARC)
Disclosure
Committee
(DC)
Nominations
Committee
(NOMS)
People &
Remuneration
Committee
(PREM)
Safety, Health,
Environment &
Sustainability
Committee
(SHES)
Number of meetings
held*
31410466
Peter Crowley, Chair
(1)
3049456
Cathy Quinn
(2)
3141026
Sandra Dodds
(3)
3041026
Tony Dragicevich
(4)
22236
Andrew Reding
(5)
211145
Jacqui Coombes
(6)
51-1
James Miller
(7)
2---
Barbara Chapman,
Acting Chair
(8)
2728443
(1) Appointed as Chair on 3 February 2025, member of NOMS to 2 February 2025, member of ARC to 31 May 2025, member of DC, member of PREM to 2 February 2025,
member of SHES to 2 February 2025. Effective from 3 February 2025, Peter attended Committee meetings in an ex officio capacity.
(2) Chair of DC, Chair of SHES, member of ARC, member of NOMS to 31 May 2025.
(3) Chair of ARC, member of DC, member of SHES.
(4) Appointed director on 1 August 2024, member of SHES, appointed member of PREM effective 1 March 2025.
(5) Appointed director on 22 August 2024, appointed Managing Director and Group CEO effective from 30 September 2024. Andrew attended Committee meetings in an
ex officio capacity.
(6) Appointed director on 14 April 2025, member of PREM and appointed Chair effective 1 May 2025, member of NOMS.
(7) Appointed director on 1 June 2025, member of ARC, member of DC, member of NOMS.
(8) Acting Chair to 2 February 2025 and director until resignation effective 30 April 2025, Chair of NOMS to 2 February 2025, Chair of PREM to 30 April 2025, member of ARC from
3 February 2025, member of DC to 2 February 2025. Barbara attended Committee meetings in an ex officio capacity to 2 February 2025.
* Where a director is not a member of a committee but attended meetings, they did so as an observer.
The directors’ meetings referred to in the table above do not include additional ad hoc or transactional committee meetings held
through the year.
DIRECTORS’ REMUNERATION STRUCTURE
The current total directors’ remuneration pool approved by shareholders (in 2011) is $2 million per annum. Directors receive
remuneration determined by the Board, provided that the directors’ aggregate remuneration per annum does not exceed the
shareholder-approved remuneration pool. There are no schemes for retirement benefits for non-executive directors. The remuneration
scale for directors is outlined below:
Board/CommitteeRoleFY25
(1)
Board of DirectorsChair
(2)
$320,000
Non-executive director$155,500
Audit and RiskChair$38,000
Member$19,500
Disclosure
(3)
Chair$20,000
Member$10,000
NominationsChair-
Member$8,500
People and RemunerationChair$29,000
Member$14,500
Safety, Health, Environment and SustainabilityChair$29,000
Member$14,500
(1) FY25 fees were paid effective from 1 July 2024. The Chair’s remuneration was reduced from $391,000 to $320,000 effective 1 July 2024.
(2) No additional fees are paid to the Board Chair for committee roles.
(3) Disclosure Committee fees were introduced effective 1 March 2025.
77
Fletcher Building Limited Annual Report 2025
Mandatory Disclosures (Continued)
CONTENTS
In addition to the above, overseas based directors are paid an annual travelling allowance of $18,000 in recognition of the additional
time spent travelling to and from New Zealand for Company-related matters.
Any fees paid to directors for unscheduled additional work are time-based and payable at the rate of $1,200 per half day. The
aggregate amount of such fees is limited to $70,000 in the year and any one director is limited to receiving no more than $14,500
in the year. Directors do not receive any further remuneration for also being directors of Fletcher Building Industries Limited, the
NZX-listed issuer of the Group’s capital notes. Directors’ fees exclude GST, where appropriate. In addition, Board members are entitled
to be reimbursed for costs directly associated with carrying out their duties, including travel costs.
DIRECTORS’ REMUNERATION
Details of the total remuneration received by each director during the financial year ended 30 June 2025 is as follows:
Director
Board
Fees
Audit
& Risk
Committee
(ARC)
Disclosure
Committee
(DC)
(9)
Nominations
Committee
(NOMS)
People &
Remuneration
Committee
(PREM)
Safety, Health,
Environment &
Sustainability
Committee
(SHES)
Ad hoc
Committees
(10)
Overseas
based
directors'
travelling
allowance
Total
Remuneration
Peter Crowley
(Chair)
(1)
$90,708
$133,33*
$-*$5,000$18,000$280,292
Cathy Quinn
(2)
$155,500$19,500$6,667*$7,792$29,000*$12,333$230,792
Sandra Dodds
(3)
$155,500$38,000*$3,333$14,500$4,833$18,000$234,167
Tony Dragicevich
(4)
$142,542$4,833$13,292$16,500$177,167
Andrew Reding
(5)
$17,081$5,000$22,081
Jacqui Coombes
(6)
$33,159$1,789
$636
$4,833*
$40,417
James Miller
(7)
$12,958$1,625$833$708$16,125
Barbara Chapman
(Acting Chair)
(8)
$186,667*
$38,875
$-
$4,875
$-$-*
$-*
$7,250
$237,667
TOTAL$999,573$64,000$10,833$10,289$17,552$56,792$27,167$52,500$1,238,706
* Chair of Committee
(1) Director appointed as Chair on 3 February 2025, member of NOMS to 2 February 2025 and appointed Chair effective 3 February 2025, member of ARC to 31 May 2025, member
of DC, member of PREM to 2 February 2025, member of SHES to 2 February 2025. Effective from 3 February 2025, Peter attended Committee meetings in an ex officio capacity.
No additional fees are paid to the Board Chair for committee roles.
(2) Chair of DC, Chair of SHES, member of ARC, member of NOMS to 31 May 2025.
(3) Chair of ARC, member of DC, member of SHES.
(4) Appointed director on 1 August 2024, member of SHES, appointed member of PREM effective 1 March 2025.
(5) Appointed director on 22 August 2024, appointed Managing Director and Group CEO effective from 30 September 2024. From Group CEO appointment date, no Director fees
was payable.
(6) Appointed director on 14 April 2025, member of PREM to 30 April 2025 and appointed Chair effective 1 May 2025, member of NOMS.
(7) Appointed director on 1 June 2025, member of ARC, member of DC, member of NOMS.
(8) Acting Chair to 2 February 2025 and director until resignation effective 30 April 2025, Chair of NOMS to 2 February 2025, Chair of PREM to 30 April 2025, member ARC from
3 February 2025, member of DC to 2 February 2025. Barbara attended additional Committee meetings in an ex officio capacity to 2 February 2025. No additional fees are paid
to the Board Acting Chair for committee roles.
(9) DC fees introduced effective 1 March 2025.
(10) Ad hoc committees include those established for the 2024 capital raise and construction contract review processes.
78
Fletcher Building Limited Annual Report 2025
Mandatory Disclosures (Continued)
CONTENTS
MANAGING DIRECTOR’S AND GROUP CEO’S REMUNERATION
The remuneration Andrew Reding received for FY25 is set out below.
Andrew commenced as a Board director on 22 August 2024, prior to being appointed as Managing Director and Group CEO on
30 September 2024. For the period between 22 August and 30 September 2024 he therefore received $22,081 in director fees.
Andrew has not received any additional director fees for his role as Managing Director since commencing as Managing Director
and Group CEO.
The following table details the remuneration Andrew Reding received as Managing Director and Group CEO for the period
30 September 2024 to 30 June 2025.
FY25
Base remuneration
$1,093,255
Other benefits
(1)
$1,720
Short-term incentive paid in the financial year
(2)
-
Long-term incentive vested in the financial year
(3)
-
Total remuneration received
(4)
$1,094,975
Long-term incentives
Granted but only awarded after 3 years, if performance criteria are metFY25
Long-term incentive – number of shares granted$447,607
(5)
Long-term incentive – face value of grant$2,175,000
Refer to the Remuneration Report for details of the Short- and Long-Term incentives.
(1) Includes medical insurance.
(2) No Short-Term incentive was paid during FY25.
(3) As the Managing Director and Group CEO only started in FY25, he was not eligible for any LTI vesting during FY25.
(4) This table sets out remuneration paid and incentives awarded for the relevant financial year.
(5) Based on a share price of NZ$2.96 being the volume weighted average price for the five business days prior to 1 September 2024. This grant has a 3 year vesting period.
Further details of the remuneration arrangements of the Managing Director and Group CEO will be set out in the Remuneration Report
that will be made available to shareholders on the Company’s website in connection with the Company’s 2025 Notice of Annual
Shareholders’ Meeting.
79
Fletcher Building Limited Annual Report 2025
Mandatory Disclosures (Continued)
CONTENTS
DISCLOSURE OF INTERESTS BY DIRECTORS
The following are particulars of entries made by directors in the Company’s interests register during the 12 months ended 30 June
2025, pursuant to section 140(2) of the Companies Act 1993. The director will be regarded as interested in all transactions between
Fletcher Building and the disclosed entity. Changes to entries disclosed during the year to 30 June 2025 are noted in brackets, for the
purposes of section 211(1)(e) of the Companies Act 1993.
Peter CrowleyFletcher Building Industries Limited (Director, appointed Chair 3 February
2025)
Chair
Barrambin Trading Company Pty Limited (resigned 20 June 2025)Director
Riverside Marine Holdings Pty Limited (appointed 20 June 2025)Director
The Riverside Coal Transport Company Pty Limited (resigned 30 June 2025)Director
Cathy QuinnFertility Associates Holdings LimitedChair
Tourism Holdings LimitedChair
Fletcher Building Industries LimitedDirector
Fonterra Co-operative Group LimitedDirector
Rangatira LimitedDirector
Pin Twenty LimitedDirector/Shareholder
MinterEllisonRuddWattsConsultant
Council of the University of AucklandPro-Chancellor
Sandra DoddsContact Energy LimitedDirector
Fletcher Building Industries LimitedDirector
OceanaGold CorporationDirector
Snowy Hydro LimitedDirector
Tony DragicevichCapral LimitedManaging Director & CEO
Fletcher Building Industries Limited (appointed 1 August 2024)Director
Andrew RedingFletcher Building Industries Limited (appointed 22 August 2024)Director
AR Sharetrading LimitedDirector/Shareholder
Avertana Limited (resigned directorship 6 June 2025)Director/Shareholder
Hydroxsys Holdings Limited (resigned directorship 19 February 2025)Director/Shareholder
Tectonus LimitedDirector/Option holder
Jacqui CoombesFletcher Building Industries Limited (appointed 14 April 2025)Director
Guzman y Gomez LimitedDirector
James MillerChannel Infrastructure LimitedChair
Fletcher Building Industries Limited (appointed 1 June 2025)Director
Mercury NZ Limited
(1)
Director
Ryman Healthcare LimitedDirector
Vista Group International LimitedDirector
(1) Retires 19 September 2025.
There were no specific disclosures made by any directors during the year of any interests in transactions entered into by them with
Fletcher Building or any of its subsidiaries.
INFORMATION USED BY DIRECTORS
There were no notices from directors of the Company requesting to disclose or use Company information received in their capacity
as directors.
INDEMNITY AND INSURANCE
In accordance with section 162 of the Companies Act 1993 and the constitution of the Company, Fletcher Building has continued
to indemnify and insure its directors, executives and employees acting on behalf of the Company against potential liability or
costs incurred in any proceeding, except to the extent prohibited by law. The insurance does not cover liabilities arising from
criminal actions.
80
Fletcher Building Limited Annual Report 2025
Mandatory Disclosures (Continued)
CONTENTS
DIRECTORS’ HOLDING OF SECURITIES
The policy of the Board is that non-executive directors (or their associates) must hold at least 40,000 shares in the Company, or a
number equivalent to a director’s base fee at the time of joining the Board, to demonstrate their commitment to and alignment with
the Company. Directors have three years from their date of appointment to accumulate that holding. Non-executive directors do not
participate in any Company share or option plan.
DISCLOSURE OF DIRECTORS’ INTERESTS IN SECURITIES
Set out below is a table of the securities of the Company and Fletcher Building Industries Limited (a wholly-owned subsidiary of the
Company) in which each director had a relevant interest at 30 June 2025.
DirectorOwnershipOrdinary SharesCapital Notes
Peter CrowleyBeneficial72,270
Cathy QuinnBeneficial57,816
Non-Beneficial
(1)
175,18115,969,500
Sandra DoddsBeneficial31,680
Tony DragicevichBeneficial70,000
Andrew RedingBeneficial113,281
Beneficial interest in shares under the
Executive Long Term Share Scheme
447,607
(1) Cathy Quinn holds a non-beneficial interest in Fletcher Building shares as a director/shareholder of Pin Twenty Limited.
DISCLOSURE OF DIRECTORS’ INTERESTS IN SHARE TRANSACTIONS
Directors disclosed, pursuant to section 148(2) of the Companies Act 1993, the following transactions involving relevant interests
in Fletcher Building shares and capital notes during the year ended 30 June 2025.
DirectorDate of transactionNature of transaction
Nature of
relevant interestConsideration
Number of
securities
Tony Dragicevich26 September 2024
On-market acquisition
of ordinary shares
Beneficial interestAU $92,75035,000
Tony Dragicevich27 September 2024
On-market acquisition
of ordinary shares
Beneficial interestAU $91,12535,000
Sandra Dodds2 October 2024
On-market acquisition
of ordinary shares
Beneficial interestNZ $27,50010,000
Barbara Chapman15 October 2024
Acquisition of ordinary shares
under entitlement offer
Beneficial interestNZ $53,44822,270
Peter Crowley15 October 2024
Acquisition of ordinary shares
under entitlement offer
Beneficial interestAU $48,994 22,270
Sandra Dodds15 October 2024
Acquisition of ordinary shares
under entitlement offer
Beneficial interestAU $14,696 6,680
Cathy Quinn15 October 2024
Acquisition of ordinary shares
under entitlement offer
Beneficial interestNZ $42,75817,816
Cathy Quinn
(1)
15 October 2024
Acquisition of ordinary shares
under entitlement offer
Non-beneficial interestNZ $129,56253,984
Andrew Reding15 October 2024
Acquisition of ordinary shares
under entitlement offer
Beneficial interestNZ $26,17410,906
Andrew Reding15 October 2024
Acquisition of ordinary shares
under entitlement offer
Beneficial interestNZ $2,136890
Andrew Reding9 December 2024
Award of LTI interest
in ordinary shares
Beneficial interest under
executive long-term share scheme
-447,607
Andrew Reding21 February 2025
On-market acquisition
of ordinary shares
Beneficial InterestNZ $249,21875,000
Cathy Quinn
(1)
17 March 2025
Redemption on maturity
of capital notes
Non-beneficial interestNZ $9,216,000(9,216,000)
(1) As a director/shareholder of Pin Twenty Limited, Cathy Quinn disclosed (a) a non-beneficial interest in the 53,984 shares acquired by Pin Twenty Limited on 15 October 2024;
and (b) a non-beneficial interest in Pin Twenty Limited’s 9,216,000 Fletcher Building Industries Limited capital notes redeemed on 17 March 2025.
81
Fletcher Building Limited Annual Report 2025
Mandatory Disclosures (Continued)
CONTENTS
4. OTHER DISCLOSURES
GENDER COMPOSITION
The comparison of gender composition within Fletcher Building as at 30 June 2024 and as at 30 June 2025 is set out in the
table below.
20252024
FemaleMale
Gender
DiverseFemaleMale
Gender
Diverse
Board of Directors
(1)
3 (43%)4 (57%)0 (0%)3 (50%)3 (50%)0 (0%)
Executive Committee
(1)
2 (20%)8 (80%)0 (0%)2 (15%)11 (85%)0 (0%)
Senior Management
(1)
21 (32%)44 (68%)0 (0%)24 (33%)48 (67%)0 (0%)
All employees
26%74%0%25%74%1%
(1) Andrew Reding (Managing Director and Group CEO) has been counted in both the Board of Directors and Executive Committee data. The Executive Committee for these
purposes comprises those persons who report directly to the Managing Director and Group CEO. The members of the Executive Committee are 'Officers' for the purposes
of NZX listing rule 3.8.1(c).
DIVERSITY AND INCLUSION
The Board is satisfied with the initiatives being implemented by the Group and its performance with respect to the Inclusion and
Diversity Policy.
AUDITOR’S FEES
EY has continued to act as auditors of the Group. Details of the fees and expenses paid to EY are provided in note 6 of the
consolidated financial statements within this Annual Report. Any additional work performed by EY beyond the statutory audit was
pre-approved in accordance with the Auditor Independence Policy, available on the Company's website.
CREDIT RATING
As at 30 June 2025, the Group had a credit rating of Baa3 from Moody’s Investors Services which was affirmed on 27 September 2024
with the outlook revised from negative to stable. This rating remains unchanged as at the date of this Annual Report.
DONATIONS
Please refer to note 6 of the audited consolidated financial statements for donations made in FY25. All political donations must
be approved by the Board.
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Fletcher Building Limited Annual Report 2025
Mandatory Disclosures (Continued)
CONTENTS
EMPLOYEE REMUNERATION
Section 211(1)(g) of the Companies Act 1993 requires disclosure of the number of employees or former employees of the Group
whose remuneration and any other benefits received during the year in their capacity as employees, was equal to or exceeded
$100,000 per annum and to state the number of such employees or former employees in brackets of $10,000. These amounts are
included below and include all applicable employees or former employees of Fletcher Building worldwide. The remuneration amounts
include all monetary amounts and benefits actually paid during the year, including redundancies and the face value of long-term
incentives vested.
From NZD to NZD
New Zealand
business
activities
International
business
activitiesTotalFrom NZD to NZD
New Zealand
business
activities
International
business
activitiesTotal
100,000 – 110,000684279963490,000 – 500,000101
110,000 – 120,000450301751500,000 – 510,000213
120,000 – 130,000433231664510,000 – 520,000101
130,000 – 140,000306182488520,000 – 530,000112
140,000 – 150,000259177436530,000 – 540,000202
150,000 – 160,000197134331540,000 – 550,000202
160,000 – 170,000129113242550,000 – 560,000112
170,000 – 180,000124100224560,000 – 570,000011
180,000 – 190,0007867145570,000 – 580,000213
190,000 – 200,0009466160590,000 – 600,000123
200,000 – 210,000623799610,000 – 620,000112
210,000 – 220,000574198620,000 – 630,000101
220,000 – 230,000373067640,000 – 650,000011
230,000 – 240,000302656650,000 – 660,000112
240,000 – 250,000251742680,000 – 690,000101
250,000 – 260,000241741700,000 – 710,000011
260,000 – 270,000281341710,000 – 720,000011
270,000 – 280,00020626740,000 – 750,000112
280,000 – 290,00020929760,000 – 770,000101
290,000 – 300,000101222770,000 – 780,000202
300,000 – 310,0009514830,000 – 840,000101
310,000 – 320,00014519870,000 – 880,000112
320,000 – 330,00012820900,000 – 910,000101
330,000 – 340,000639920,000 – 930,000112
340,000 – 350,00011314970,000 – 980,000101
350,000 – 360,00011112990,000 – 1,000,000011
360,000 – 370,0004481,000,000 – 1,010,000101
370,000 – 380,00074111,020,000 – 1,030,000101
380,000 – 390,00065111,040,000 – 1,050,000011
390,000 – 400,0007181,060,000 – 1,070,000101
400,000 – 410,0001121,090,000 – 1,100,000202
410,000 – 420,0003031,110,000 – 1,120,000101
420,000 – 430,00056111,150,000 – 1,160,000011
430,000 – 440,0000221,340,000 – 1,350,000101
440,000 – 450,0001121,410,000 – 1,420,000011
450,000 – 460,0003141,530,000 – 1,540,000101
460,000 – 470,0007291,590,000 – 1,600,000011
470,000 – 480,0005051,780,000 – 1,790,000101
480,000 – 490,000404
Total3,2181,9305,148
The decrease in the highest bracket from the FY24 report to the FY25 report reflects the changes in Group CEO incumbents
throughout the year. The individual in the highest bracket is Nick Traber (Acting Group CEO to 29 September 2024), for whom
a detailed breakdown of remuneration received will be provided in the Remuneration Report.
This table is required by law and sets out remuneration that has been received during this year and so includes amounts that relate
to prior periods (due to timing of payments).
83
Fletcher Building Limited Annual Report 2025
Mandatory Disclosures (Continued)
CONTENTS
EXERCISE OF NZX/ASX DISCIPLINARY POWERS
Neither NZX nor ASX has taken any disciplinary action against Fletcher Building during the financial year ended 30 June 2025 and
there was no exercise of powers by NZX under NZX Listing Rule 9.9.3 (relating to powers to cancel, suspend or censure an issuer) with
respect to Fletcher Building during the reporting period.
NZX WAIVERS
There were no waivers granted by NZX or relied on by Fletcher Building Limited in the 12 months ended 30 June 2025.
DISTRIBUTION OF SHAREHOLDERS AND HOLDINGS
The total number of voting securities of Fletcher Building at 30 June 2025 was 1,074,897,372 fully paid ordinary shares, each conferring
on the registered holder the right to one vote on a poll at a meeting of shareholders.
Size of holdingNumber of shareholders% of shareholdersNumber of ordinary shares% of ordinary shares
1 – 1,00014,38146.555,893,2150.55
1,001 – 5,00010,84935.1126,535,3572.47
5,001 – 10,0002,8399.1920,340,6751.89
10,001 – 100,0002,6458.5664,586,9146.01
100,001 Over1820.59957,541,21189.08
Total
30,896100.00 1,074,897,372100.00
SUBSTANTIAL PRODUCT HOLDERS
According to notices given under the Financial Markets Conduct Act 2013, the following persons were substantial product holders
of Fletcher Building as at 30 June 2025. The total number of voting securities of Fletcher Building Limited at 30 June 2025 was
1,074,897,372 fully paid ordinary shares.
Substantial product holder
Number of ordinary shares in
which relevant interest is heldDate of notice
Allan Gray Australia Pty Ltd (Allan Gray Australia)
and its related bodies corporate
201,342,1786 June 2025
Schroders Investment Management Australia Limited
and its related bodies corporate
65,903,47228 May 2025
84
Fletcher Building Limited Annual Report 2025
Mandatory Disclosures (Continued)
CONTENTS
20 LARGEST REGISTERED HOLDERS AS AT 30 JUNE 2025
Holder NameNumber of ordinary shares% of issued capital
HSBC Custody Nominees (Australia) Limited146,668,75313.64
Citicorp Nominees Pty Limited137,539,43212.80
JP Morgan Nominees Australia Limited109,156,38710.16
Citibank Nominees (New Zealand) Limited – NZCSD62,369,6915.80
HSBC Nominees (New Zealand) Limited A/C State Street – NZCSD56,397,9695.25
BNP Paribas Nominees (NZ) Limited – NZCSD55,607,3155.17
JPMorgan Chase Bank NA NZ Branch – Segregated Clients Acct – NZCSD40,725,8873.79
HSBC Nominees (New Zealand) Limited – NZCSD33,226,2053.09
HSBC Nominees A/C NZ Superannuation Fund Nominees Limited – NZCSD31,933,0562.97
BNP Paribas Nominees Pty Ltd31,271,3862.91
Accident Compensation Corporation – NZCSD20,671,8001.92
New Zealand Depository Nominee Limited20,249,6201.88
ANZ Wholesale Australasian Share Fund – NZCSD18,077,7011.68
Tea Custodians Limited Client Property Trust Account – NZCSD17,894,0631.66
JBWere (NZ) Nominees Limited (NZ Resident A/C)15,382,1071.43
Simplicity Nominees Limited – NZCSD12,414,9921.15
JBWere (NZ) Nominees Limited (Res Inst A/C)9,495,6640.88
Custodial Services Limited9,408,1740.88
PT (Booster Investments) Nominees Limited8,356,8470.78
BNP Paribas Noms Pty Ltd8,116,6330.76
Total844,963,68278.61
New Zealand Central Securities Depository Limited (NZCSD) provides a custodial depository service which allows electronic trading
of securities to members. It does not have a beneficial interest in these securities. As at 30 June 2025, the total number of ordinary
shares held in NZCSD was 378,390,689 which amounted to 35.20% of the ordinary shares on issue.
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SUBSIDIARY COMPANY INFORMATION
The persons listed below respectively held office as directors of Fletcher Building Limited or one or more of its subsidiary companies
as at 30 June 2025, or in the case of those persons with the letter (R) after their name ceased to hold office during the year. Except
where shown below, Fletcher Building’s indirect ownership interest in these companies as at 30 June 2025 was 100%.
No employee of Fletcher Building appointed as a director of a Fletcher Building company retains any remuneration or other benefits,
as a director. The remuneration and other benefits of such employees, received as employees, are included in the relevant bandings
for remuneration disclosed in the “Employee Remuneration” section. Except where shown below, no other director of any subsidiary
company within the Group receives director’s fees or other benefits as a director.
CompanyDirectors
Amatek Holdings Pty LimitedF Hopkins, W Wright, B McKenzie (R), G O’Reilly (R)
Amatek Industries Pty LimitedF Hopkins, W Wright, B McKenzie (R), G O’Reilly (R)
Amatek Investments Pty LimitedF Hopkins, W Wright, B McKenzie (R), G O’Reilly (R)
Approach Signs LimitedP Boylen, W Wright, B McKenzie (R)
Bandelle Pty LimitedF Hopkins, W Wright, B McKenzie (R), G O’Reilly (R),
Baron Insulation Pty LtdA Rowe, W Wright, B McKenzie (R), G O’Reilly (R)
Belvedere FRL No 1 General Partner Limited (51%)S Evans, P Majurey
Belvedere FRL No 1 Limited Partnership (51%)
Belvedere FRL No 2 General Partner Limited (51%)S Evans, P Majurey
Belvedere FRL No 2 Limited Partnership (51%)
Brian Perry Civil LimitedP Boylen, W Wright, B McKenzie (R)
Building Prefabrication Solutions LimitedJ Peters, W Wright, J Jang (R), B McKenzie (R)
Burnham 2020 LimitedT Williams, W Wright, B McKenzie (R), N Traber (R)
Cleaver Building Supplies Limited (75%)M Cleaver, J Peters, J Jang (R)
Crane Enfield Metals Pty LimitedF Hopkins, W Wright, B McKenzie (R), G O’Reilly (R)
Crane Group Pty LimitedF Hopkins, W Wright, B McKenzie (R), G O’Reilly (R)
Crane Share Plan Pty LimitedF Hopkins, W Wright, B McKenzie (R), G O’Reilly (R)
Crevet Pipelines Pty LtdP Lavelle, W Wright, B McKenzie (R), G O’Reilly (R)
Crevet Pty LtdF Hopkins, W Wright, B McKenzie (R), G O’Reilly (R)
CTCI Pty LimitedS Leagh-Murray, W Wright, B McKenzie (R), G O’Reilly (R)
Delcon Holdings (No. 11) LimitedT Williams, W Wright, H McBeath (R), B McKenzie (R)
ee-Fit Pty LimitedA Rowe, W Wright, B McKenzie (R), G O’Reilly (R)
FBHS (Aust) Pty LimitedF Hopkins, W Wright, B McKenzie (R), G O’Reilly (R), D Orr (R)
FBII (Puhoi) LimitedP Boylen, W Wright, B McKenzie (R)
FBSOL Pty LimitedF Hopkins, W Wright, B McKenzie (R), G O’Reilly (R), D Orr (R)
Fletcher Building (Australia) Pty LtdF Hopkins, W Wright, B McKenzie (R), G O’Reilly (R)
Fletcher Building (Fiji) Pte LimitedP Boylen, A Henderson, S Tuinamuana, A Whitton, A Kumar (R)
Fletcher Building Educational Fund LimitedK Eagle, J McDonald, R Rendle, C Carroll (R)
Fletcher Building Holdings LimitedH Wong, W Wright, B McKenzie (R)
Fletcher Building Holdings New Zealand LimitedH Wong, W Wright, B McKenzie (R)
Fletcher Building Industries LimitedJ Coombes, P Crowley, S Dodds, A Dragicevich, J Miller, C Quinn,
A Reding, B Chapman (R)
Fletcher Building LimitedJ Coombes, P Crowley, S Dodds, A Dragicevich, J Miller, C Quinn,
A Reding, B Chapman (R)
Fletcher Building Nominees LimitedM Binns, J Chapman, H McKenzie, C Munkowits, G Niccol, T Williams
Fletcher Building Products Australia Pty LtdF Hopkins, W Wright, B McKenzie (R), G O’Reilly (R)
Fletcher Building Products LimitedH McBeath, W Wright, B McKenzie (R)
Fletcher Building Share Schemes LimitedJ Chapman, G Niccol
Fletcher Building Welfare Fund Nominees LimitedD Lucas, S Schulz, D Sixton, C Stewart
Fletcher Challenge Building UK LimitedS Evans, W Wright, B McKenzie (R)
Fletcher Challenge Forest Industries LimitedS Evans, W Wright, B McKenzie (R)
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CompanyDirectors
Fletcher Concrete and Infrastructure LimitedH McBeath, T Williams, W Wright, B McKenzie (R), N Traber (R)
Fletcher Construction (Solomon Islands) LimitedP Boylen, A Henderson
Fletcher Construction Buildings LimitedP Boylen, W Wright, B McKenzie (R)
Fletcher Construction Company (Fiji) Pte LimitedP Boylen, A Kumar
Fletcher Construction Holdings LimitedP Boylen, W Wright, B McKenzie (R)
Fletcher Construction Infrastructure LimitedP Boylen, W Wright, B McKenzie (R)
Fletcher Construction Management Services LimitedP Boylen, W Wright, B McKenzie (R)
Fletcher Development LimitedS Evans, W Wright, B McKenzie (R)
Fletcher Distribution LimitedJ Peters, W Wright, J Jang (R), B McKenzie (R)
Fletcher Industries Australia Pty LimitedF Hopkins, W Wright, B McKenzie (R), G O’Reilly (R)
Fletcher Insulation Pty LimitedA Rowe, W Wright, B McKenzie (R), G O’Reilly (R)
Fletcher Morobe Construction LimitedP Boylen, R Simpson
Fletcher Property LimitedH Wong, W Wright, B McKenzie (R)
Fletcher Residential LimitedS Evans, W Wright, B McKenzie (R)
Fletcher Steel LimitedH McBeath, T Williams, W Wright, B McKenzie (R)
Fletcher Wood Products LimitedH McBeath, W Wright, B McKenzie (R)
Gatic Pty LimitedP Lavelle, W Wright, B McKenzie (R), G O’Reilly (R)
Geraldton Independent Building Supplies Pty LimitedS Leagh-Murray, W Wright, B McKenzie (R), G O’Reilly (R)
Higgins Contractors LimitedP Boylen, W Wright, B McKenzie (R)
Higgins Group Holdings LimitedP Boylen, W Wright, B McKenzie (R)
Homai MFR General Partner Limited (51%)S Evans, P Majurey
Homai MFR Limited Partnership (51%)
HotForm Products Limited (51%)C Lee, J Mainwaring, R Sutherland, D Sutton, S Hansen (R)
Iplex Pipelines Australia Pty LimitedP Lavelle, W Wright, B McKenzie (R), G O’Reilly (R)
Iplex Pipelines NZ LimitedH McBeath, W Wright, B McKenzie (R)
Iplex Properties Pty. LimitedP Lavelle, W Wright, B McKenzie (R), G O’Reilly (R)
Kaipatiki FRL General Partner Limited (51%)S Evans, P Majurey
Kaipatiki FRL Limited Partnership (51%)
Key Plastics Pty. Ltd.P Lavelle, W Wright, B McKenzie (R), G O’Reilly (R)
Kingston Bridge Engineering Pty LtdP Lavelle, W Wright, B McKenzie (R), G O’Reilly (R)
Kinsey Kydd Building Supplies LimitedW Wright, B McKenzie (R)
Kusabs Building Supplies Limited (75%)J Peters, G Kusabs, J Jang (R)
Laminex Group Pty LimitedS Leagh-Murray, W Wright, B McKenzie (R), G O’Reilly (R)
Leary Building Supplies Limited (75%)B Leary, J Peters, J Jang (R)
Macready Building Supplies Limited (75%)J Macready, J Peters, J Jang (R)
Matt Orr Building Supplies Limited (75%)M Orr, J Peters, J Jang (R)
McGill Building Supplies Limited (75%)J McGill, J Peters, J Jang (R)
McInnes Building Supplies LimitedW Wright, B McKenzie (R)
Mico New Zealand LimitedJ Peters, W Wright, J Jang (R), B McKenzie (R)
Milnes Holdings Pty LimitedF Hopkins, W Wright, B McKenzie (R), G O’Reilly (R)
Moire Road General Partner Limited (51%)N Donnelly, S Evans, S Rapson (R)
Moire Road Limited Partnership (51%)
Morinda Australia Pty LimitedF Hopkins, W Wright, B McKenzie (R), G O’Reilly (R), D Orr (R)
Northern Iron and Brass Foundry Pty. Ltd.P Lavelle, W Wright, B McKenzie (R), G O’Reilly (R)
Ōkahukura GP Limited (51%)D Clay, S Evans
Ōkahukura Limited Partnership (51%)
Oliveri Solutions Pty LimitedF Hopkins, J Woodcock, W Wright, B McKenzie (R), G O’Reilly (R)
Paul Robinson Building Supplies Limited (75%)J Peters, P Robinson, J Jang (R)
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CompanyDirectors
Pavement Technology LimitedP Boylen, W Wright, B McKenzie (R)
Penny Engineering LimitedP Boylen, W Wright, B McKenzie (R)
Penrose Retirement Nominees LimitedM Binns, J Chapman, H McKenzie, C Munkowits, G Niccol, T Williams
PlaceMakers Christchurch LimitedJ Peters, W Wright, J Jang (R), B McKenzie (R)
PlaceMakers Co 1 LimitedJ Peters, W Wright, J Jang (R), B McKenzie (R)
PlaceMakers Co 2 LimitedJ Peters, W Wright, J Jang (R), B McKenzie (R)
PlaceMakers Co 3 LimitedJ Peters, W Wright, J Jang (R), B McKenzie (R)
PlaceMakers Co 4 LimitedJ Peters, W Wright, J Jang (R), B McKenzie (R)
PlaceMakers Co 5 LimitedJ Peters, W Wright, J Jang (R), B McKenzie (R)
PlaceMakers Co 6 LimitedJ Peters, W Wright, J Jang (R), B McKenzie (R)
PlaceMakers Gisborne Limited (75.28%)J Peters, W Wright, J Jang (R), B McKenzie (R)
PlaceMakers Hawkes Bay Limited (94.06%)J Peters, W Wright, J Jang (R), B McKenzie (R)
PlaceMakers Invercargill LimitedJ Peters, W Wright, J Jang (R), B McKenzie (R)
PlaceMakers LimitedJ Peters, W Wright, J Jang (R), B McKenzie (R)
PlaceMakers Supply, Fix & Install LimitedJ Peters, W Wright, J Jang (R), B McKenzie (R)
PlaceMakers Waiheke Limited (75%)D Banks, J Peters, J Jang (R)
PlaceMakers Wanaka Limited (80%)J Peters, B Stanley-Joblin, J Jang (R)
Polymer Fusion Education Pty LtdP Lavelle, W Wright, B McKenzie (R), G O’Reilly (R)
Raylight Aluminium Limited (80%)C Mearns, J Peters, M Buckenham (R), J Jang (R)
Reece Building Supplies Limited (75%)J Peters, J Reece, J Jang (R)
Renewable Wood Fuels LimitedH McBeath, W Wright, B McKenzie (R)
Roys Hill Aggregates LimitedA Blathwayt, T Hazell
S Cubed Pty LimitedF Hopkins, W Wright, B McKenzie (R), G O’Reilly (R), D Orr (R)
Selwyn Quarries LimitedT Williams, W Wright, B McKenzie (R), N Traber (R)
Shed Boss NZ LimitedT Williams, W Wright, H McBeath (R), B McKenzie (R)
Sonata Acoustic Panels Pty LimitedA Rowe, W Wright, G O’Reilly (R)
Stanley Building Supplies LimitedJ Peters, W Wright, J Jang (R), B McKenzie (R)
Stramit Corporation Pty LimitedF Hopkins, W Wright, B McKenzie (R), G O’Reilly (R), D Orr (R)
Tasman Australia Pty LimitedF Hopkins, W Wright, B McKenzie (R), G O’Reilly (R)
Tasman Building Products Pty LimitedF Hopkins, W Wright, B McKenzie (R), G O’Reilly (R)
Tasman Insulation New Zealand LimitedH McBeath, W Wright, B McKenzie (R)
Tauoma FRL GP Limited (51%)S Evans, P Majurey
Tauoma FRL Limited Partnership (51%)
TBP Group Pty LimitedF Hopkins, W Wright, B McKenzie (R), G O’Reilly (R)
Te Tau Waka General Partner Limited (51%)D Clay, S Evans
Te Tau Waka Limited Partnership (51%)
Terrace Insurances (PCC) LimitedK Burke, J Crowder, M Rogers, B McKenzie (R), A Symons (R)
The Fletcher Construction Company (Fanshawe Street)
Limited
P Boylen, W Wright, B McKenzie (R)
The Fletcher Construction Company Limited P Boylen, W Wright, B McKenzie (R)
The Fletcher Organisation (Vanuatu) Limited P Boylen, A Care
The Fletcher Trust and Investment Company LimitedP Boylen, W Wright, B McKenzie (R)
Vivid Living LimitedS Evans, W Wright, B McKenzie (R)
Waipapa Pine LimitedH McBeath, W Wright, B McKenzie (R)
Water Filters Australia Pty LimitedJ Woodcock, W Wright, B McKenzie (R), G O’Reilly (R)
Wednesday Pte LimitedP Boylen, A Kumar
Winstone Wallboards LimitedH McBeath, W Wright, D Thomas, B McKenzie (R)
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As at 30 June 2025, Fletcher Building held an indirect ownership interest in the following associates and joint ventures.
CompanyOwnership
Altera Apartments General Partner Limited50%
Altera Apartments Limited Partnership50%
Altus NZ Limited50%
Bellus Apartments General Partner Limited50%
Bellus Apartments Limited Partnership50%
Greenraft Limited33.33%
Hexion Australia Pty Ltd50%
Higgins Holdings (Fiji) Pte Limited50%
Ilico Apartments General Partner Limited50%
Ilico Apartments Limited Partnership50%
Interpipe Holdings Limited50%
JFC Pumps Limited50%
NX2 Hold GP Limited13.40%
NX2 Hold Limited Partnership13.40%
Oamaru Shingle Supplies Limited33.33%
P2W Services Limited50%
Rangitikei Aggregates Limited50%
Rodney Aggregates Supplies Limited50%
Verto Apartments General Partner Limited50%
Verto Apartments Limited Partnership50%
Wespine Industries Pty Ltd50%
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Data sourced from publicly available filings. Our datasets may not be complete. Automated analysis can produce errors. If you believe any data on this page is incorrect, please contact us at hello@nzxplorer.co.nz. For informational purposes only. Not investment advice.