Fletcher building expects modest earnings growth

Fletcher Building chief executive Ralph Waters said today the group was likely to book modest earnings growth in the year ahead without acquisitions, but said it would need them to boost growth over the next five years.

"Going forward acquisitions are probably going to be more important than in the past," Mr Waters said.

He played down broker forecasts for a slight drop or flat earnings before interest and tax over the next two years for New Zealand's third-largest listed company.

But he said the forecasts were closer to being accurate than in the previous three years, when they heavily under-estimated Fletcher's performance.

"So they are a lot closer now than they've ever been. And in the absence of an acquisition, yes, the earnings are probably going to be closer to more modest growth, like we've got this year, than those rip-roaring years," he said.

Mr Waters said several divisions of Fletcher were looking at relatively small acquisitions outside New Zealand for less than $50 million each, which he expected to come through and boost next year's earnings.

Fletcher Building shares were down 2c to $8.98 today.

- REUTERS