Fletcher Building to return up to $300m to shareholders through share buyback

Fletcher Building CEO Ross Taylor

New Zealand's biggest building construction and materials manufacturing business will return up to $300 million to shareholders through an on-market share buyback next month.

Fletcher Building chief executive Ross Taylor announced the move today.

"Fletcher Building's balance sheet is in a strong position, with leverage expected to remain below our target range in the medium term. This position provides us with capacity to recommence capital management and distribute up to $300m to shareholders, with the most effective method being an on-market share buyback."

The company made the announcement ahead of a virtual investor briefing today where it will outline strategy and financial performance. The building and construction company has updated its earnings guidance for the financial year 2021 of between $650m to $665m, at the top end of the previous guidance range.

"We continue to make material progress on executing our strategy and achieving key financial targets," Taylor said.

"We are seeing a broadly stable market environment with trading conditions in the second half of FY21 largely consistent with the first. Despite some supply chain constraints and input cost pressures, we continue to see good margin performance from the business. Forward indicators for market activity are pointing to ongoing robust volumes in New Zealand and Australia, with our businesses focused on delivering above-market growth and improved profitability in this environment."

Today, the company will present on its group strategy, financial performance, safety, staff, innovation and sustainability topics.

Six operational divisions will also reveal more.

Investors and analysts will be able to ask questions via a webcast.

In February, Fletcher announced it had exceeded its own forecast by earning 47 per cent more operating profit in the latest half-year, rising from $219 million to $323m.

It had forecast making $305m to $320m but came in $3m above the top end of its own range.

Revenue was up from $3.96b to $3.98b, net profit after tax up 48 per cent from $82m to $121m and shareholders will get an interim dividend of 12 cents per share, paid on March 24.