Fletcher Building profit rises 71 per cent to $462 million
As it appeared in 
Fletcher Building will have bought more than $500 million of land by next year in an effort to quadruple the number of houses it can sell, the company’s chief executive says.
Mark Adamson said every indicator pointed to more record construction activity, although reconstruction in Christchurch following the earthquakes had “slowed considerably.”
The country’s biggest construction firm on Wednesday reported a 71 per cent increase in after tax profit, to $462 million.
Revenue had increased to more than $9 billion for the year ended June 30, up 4 per cent from last year, driven by strong growth in the company’s New Zealand distribution, residential and construction divisions.
Adamson said Fletcher Construction had had a record year, with revenue up 23 per cent to $1.65b.
But, the number of consents being issued in Canterbury over the past year had reduced, he said.
“Residential consents continue to rise against the backdrop of rising net migration into New Zealand, and strong house price appreciation across most parts of New Zealand.
“The only note of caution is around Christchurch residential, where the surge of activity caused by the earthquakes has slowed considerably, and in certain rural parts of New Zealand, where activity is down on previous levels,” Adamson said.
Fletcher Building has about $350m of land it will use for construction, having added about $150m of land this year.
It expected to invest about the same amount over the coming year, in which time it would probably also sell about $50m of houses.
“The resolution to the house price issue in Auckland is a supply-side one,” Adamson said.
“We’ve put our investors’ money where our mouth is and in total have spent, by the end of the current year in which we’re in, upwards of half a billion dollars acquiring land to probably increase by four-fold the number of houses we bring to the market.”
Fletcher Building expected residential consents would peak in 2018, but its sales of cement, concrete and plasterboard were all up, while distributors such as Placemakers also had “healthy” growth.
“In New Zealand, every indicator points to another strong year in the construction sector, with residential, commercial and infrastructure work expected to continue at record levels.”