November 16, 2015 / 10:45 PM / 2 years ago

New Zealand's Fletcher Building upbeat about FY16

WELLINGTON, Nov 17 (Reuters) - New Zealand construction company Fletcher Building said on Tuesday it was expecting solid year-on-year growth in the current financial year, bolstered by strong domestic market conditions.

Fletcher Building expects operating earnings before interest, tax and significant items to be in a range of NZ$650 million ($421.85 million) to NZ$690 million in the year to June 30, 2016, Chairman Ralph Norris told shareholders at the company’s annual meeting.

In August, the company said its operating earnings excluding significant items were NZ$653 million in the year to June 30.

Norris noted, however, if the FY15 earnings were normalized to reflect changes in the business the relevant prior year comparative figure would be NZ$610 million.

“Therefore, operating earnings in the range of $650 million to $690 million will represent solid growth year on year from our continuing business operations,” Norris said.

He said the company was expecting “strong market conditions in the New Zealand construction industry to persist through the 2016 financial year” while in Australia “the outlook is more mixed.” Among other things, continued federal and state government fiscal deficits are likely to mean that infrastructure activity is further constrained, said Norris.

Analysts had been expecting an operating profit of NZ$704.5 million, according to the mean forecast from Thomson Reuters I/B/E/S/S. Shares in Fletcher Building rose 0.1 percent to NZ$7.39 in early trade.

Fletcher Building is the lead contractor in the earthquake rebuild program for New Zealand’s Christchurch, and makes a broad range of building products from steel roof tiles to timber products, which it exports to Asia, Europe and the Americas. ($1 = 1.5408 New Zealand dollars) (Reporting by Rebecca Howard)

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