Fletcher's Ling 'never lost his cool'

Fletcher Building chief executive Jonathan Ling addresses the company's annual meeting of shareholders in Auckland. 16 November 2011 New Zealand Herald Photograph by Richard Robinson

Fletcher Building chairman Ralph Waters paid tribute today to the company's outgoing chief executive, Jonathan Ling, who he said "never lost his cool" during the global financial crisis and its lingering aftermath.

Waters, who was the company's first chief executive after the company was carved out of old Fetcher Challenge Group in 2001, said timing was on his side when he took the helm.

"I should say at this time that I had the good fortune of arriving here at the bottom of the building cycle when it turned," Waters, an Australian, said in a conference call.

"Jonathan has certainly got the other side of the coin," he said.

"He managed to get the job just before we had the global financial crisis, and I don't think the world has ever been the same since," he said.

Waters said many companies that had emerged from the crisis were now totally different from the way they were when it started.

"Our earnings might be below what we might have wanted, but basically Fletcher Building is intact," he said.

Waters undertook a string of large purchases during his tenure, among them being Australia's Laminex, which turned out well for the company.

Ling has had no such luck.

In 2007, on the cusp of the global financial crisis, Fletcher Building bought the US materials company Formica for about $1 billion.

Within months the US housing market went into a downward spiral from which it is yet to fully recover.

Analysts say it will be some time before Fletcher Building can extract anything like an acceptable rate of return from Formica, given the still depressed conditions in the United States.

Last year, Fletcher Building bought Australian pipeline systems group, Crane, also for around $1b.

The purchase drew some flak from analysts as being at the top of the Australian building cycle, but Waters said the board still stood by the purchase, saying it was a company that Fletcher Building had sought for some time.

Matt Goodson, portfolio manager at BT Funds Management, said Ling's was one of longer tenures for a company of Fletcher Building's large size and complexity.

He praised Ling for keeping the company's balance sheet in good shape.

"He is a pretty capable person who ran into a very nasty cycle," Goodson said.

Ling said that he had held discussions with the board early this year, saying that it was time the board considered a succession plan.

Mark Adamson, who has been part Formica business in the US, has been appointed chief executive and managing director and will take up the role on October 1.

Adamson, an English national, is chief executive of the laminates and panels division, which includes the Laminex business in Australia and New Zealand, and the Formica business with operations in North America, Asia and Europe.

The role attracted significant interest from senior executives in New Zealand and overseas, Waters said.

Fletcher Building shares last trade at $6.31, up two, in a moderately firmer market overall.