Fran O'Sullivan: Taylor looking beyond SkyCity tussle

The legal stoush with SkyCity is over expensive cost overruns on the International Convention Centre. Photo / Getty

Ross Taylor won't be a "tub thumper" when it comes to settling the expected legal stoush with SkyCity over expensive cost overruns on the International Convention Centre.

The Fletcher Building boss — in the job just three months — emphasised that the provisions forecast for the company's Building + Interiors (B+I) division unveiled last week (which amounts to two-year losses of $952 million on some of New Zealand's most expensive vertical construction projects) assumes no success or additional income from legal challenges.

In yesterday's analyst and media call, Taylor said there was no point in being "frivolous or provocative".

It was quite appropriate that SkyCity hold Fletcher to the letter of the contract "as we will them".

The International Convention Centre is set to bear the lion's share of the losses from the B+I division. Some $410m of losses were projected last week — the latest (and hopefully for Fletcher the final) twist in a saga which has also claimed the scalp of chairman Sir Ralph Norris.

Taylor is getting reviews on the merits of any legal claims. If they stack up Fletcher will prosecute its claims and "where appropriate" the clients will share some of that burden.

As expected Fletcher Building has taken all of the B+I writeoffs up front, packing them into yesterday's interim announcement. This has resulted in an after-tax loss of $322m (operating earnings basis) for the six months to December 31. There will also be no dividend. This is text book stuff.

But the overall impression was one of a CEO who is a realist; focused on clearing the decks and building a new platform for growth.

Taylor's calm manner was also a change in key from his predecessor, the more volatile Mark Adamson.

He positioned the company as well on the road to recovery.

As revealed in the Weekend Herald last year, Taylor is currently executing a "whole of business" review. He expects this to be finalised by June when he will unveil the new strategy and any planned divestments.

Taylor expects to see a solid performance from the major part of the business and is optimistic he can drive growth at pace.

That said, a good deal of the growth impulse on both sides of the Tasman will likely be fuelled by infrastructure developments and residential housing — where the company's fortunes will be linked to Government-funded plans; sensible tenders and sharp execution.