Fletcher spending on land rises as region's housing market booms

Fletcher's draft masterplan for the Three Kings Quarry, where it plans to build 1500 houses.

Fletcher Building spent $57 million on land in the latest half year, well up on the $28 million it spent in the last full year.

In last Wednesday's half-year result to December 31, Fletcher announced how much it had spent.

The company had previously stated its intentions to capitalise on Auckland's booming market.

Fletcher's most recent land purchase was on the city's fast-growing northwestern outskirts, where the new town centre Westgate is being developed.

In its 2015 outlook released on Wednesday, Fletcher said New Zealand housing consents were continuing to run at levels above the long-run trend.

"Housing recorded an 18 per cent increase in operating earnings," it said, up from the December 2013 half-year's $28 million to $33 million.

"Market demand continues to be strong and a greater range of home locations and price points were introduced over the period."

Work at its Mt Wellington Stonefields development is nearing completion, while it is yet to start at the Manukau Golf Course which it owns and is moving to Ardmore, or at the 15.2ha Three Kings Quarry.

In August, chief executive Mark Adamson had said the business now builds only about 300 residences annually, but he is projecting an annual 1500 residences to be built.

"We've put a programme together and the challenge I had to Ken [Lotu-Iiga, Fletcher Residential general manager], Steve [Evans, chief operating officer] and the team is a residential pipeline of 3000 to 4000 lots, drawing down on 1500 lots a year," Adamson said.

He said then that Fletcher had land able to take about 1500 residences at the quarry site and had land at Orewa's Peninsula Golf Club.

More houses needed

• 2.2m-2.5m Aucklanders in next 30 years.
• 400,000 additional dwellings needed by 2040.
• At least 13,000 houses have to be built annually.

[Source: Fletcher Building]

Bosses head on world tour

Mark Adamson.

Fletcher Building bosses are meeting international investors in the next fortnight. Chief executive Mark Adamson, new chief financial officer Gerry Bollman and investor relations general manager Philip King are on the global roadshow, explaining the company's performance, giving insights into different divisions and talking about the outlook.

They left for Australia on Sunday to hold meetings in Sydney and Melbourne then travel to Singapore, Hong Kong, London and New York.

King said they would be back early next month. Adamson is only going as far as Australia while Bollman and King complete the rest of the tour.

The executives usually meet representatives of Macquarie in Asia, Goldman Sachs in London and Merrill Lynch in the United States. Bollman said he would also return to his home city, Cincinnati, where Fletcher's Formica Group is headquartered and to visit his family.

In its half-year result last Wednesday, the company said its construction order book was up $200 million since last June to $2 billion.