Fletcher Building reports tough quarter amid weak demand, announces cost-out program

Fletcher Building experienced a challenging first quarter for FY26, with managing director and CEO Andrew Reding citing continued weak demand and heightened competitive activity, particularly in New Zealand. Divisional volumes generally fell below the prior corresponding period (pcp). Light Building Products saw mixed results, with Comfortech (+3.8% pcp) and Iplex NZ (+14.1% pcp) showing positive growth, while Laminex AU and Iplex AU volumes were substantially down on pcp. Margins remained relatively stable in this division due to efficiencies.

Heavy Building Materials faced significant volume contractions, with Winstone Aggregates down 6.3% versus pcp and 4.1% versus Q4 FY25. Firth and Golden Bay volumes were broadly in line with last year, but steel volumes saw compressed margins despite a marginal increase on Q4 FY25. The Distribution Division's PlaceMakers Frame & Truss volumes were flat to marginally higher on pcp, but margins contracted due to competitive trading conditions.

Residential units taken to profit in Q1 FY26 totaled 88, a decrease from 90 in Q1 FY25. The company announced a further cost-out programme targeting c.NZ$100m in annualised savings, with c.NZ$50m expected in H2 FY26 and full benefits by FY27, primarily focused on back-office efficiencies to offset market condition impacts.