Julian Leys: Building Industry Federation CEO on Fletcher Building's financial loss

It's been another tough year for Fletcher Building. 

The construction giant's announced a net loss of $419 million, compared to a loss of $227 million last year. 

It's pondering selling its residential and development division and continues to consider offers for its construction division and other subsidiaries. 

Building Industry Federation CEO Julian Leys told Ryan Bridge Fletcher’s loss underscores the broader downturn they’re seeing across the whole sector. 

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Episode Transcript

Speaker 1 (00:00):
Fletchers have had a pretty crappy year. It's fair to
say four hundred million bucks. The net loss for last
year twice as bad as the previous year six hundred
and forty million dollars, and losses over two years. Julian
Lee's is a Building Industry Federation CEO with me this morning, Julian,
Good morning.

Speaker 2 (00:17):
Good morning, Ryan.

Speaker 1 (00:18):
Geez, how much longer can you keep that up?

Speaker 2 (00:21):
Oh? Look, it's I think only only features could probably
withstand a loss like that. But it does underscore against
the broader downturn that we're seeing across the whole construction sector,
where these sorts of economic pressures that we're seeing are
really reducing profitability and activity.

Speaker 1 (00:39):
Plus they've got this Sky City lawsuit hanging over them.
There's a whole bunch of other risks that have been
going to be factored in two.

Speaker 2 (00:46):
Yeah, look absolutely, but you know what, I think the
really interesting thing about this result was that they're actually
their underlying profit went from five hundred and nine million
down to three hundred and eighty four and that really high.
It's the fact that they were having squeezed margins across
you know, all of their all of their work and

(01:08):
that also again sort of highlights what we're seeing around
sort of delays, the and just the low margins that
that the sector is now having to face. And that's
and that's not good.

Speaker 1 (01:21):
And the way that they're talking is like basically they're
in a holding pattern at the moment, they're hunkering down,
you know, environment remains uncertain, focus on cost control, operational discipline,
all that sort of stuff.

Speaker 2 (01:34):
Yeah, which is probably the sensible thing. Particularly, I guess
you know, they talk to their shareholders. But you know,
if you look at the sector, we've gone from last
year we had ninety nine billion dollars across building in construction.
That's dropped five billion dollars to ninety four billion this year.
So it's come down a lot. We've seen a lot
of job losses. I think it's been reported around twelve thousand.

(01:57):
So they are taking that conservative coach. I guess what
we have to now to look at is what's going
to be the things they are going to drive the
sort of recovery. You know, are there signs that you know,
building in construction is going to sort of come out
of us? Are we at the bottom? Ryan?

Speaker 1 (02:13):
We'll see how those OCR cuts announced yesterday and the
track forward impact that Julian, Thank you. That's Julian Lees,
who's Building Industry Federation Chief executive. For more from Early
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