Page 9 - HW May-June 2020

hard news
Pragmatic Fletcher Building reveals plans for right-sizing
Retailers & merchants – you’re invited!
Part of the forthcoming New Zealand site safety scheme dubbed “BlackHat” (see page 36 for details) involves Continuing Professional Development (CPD).
Bi-annual half day CPD events where BlackHats – trained and accredited
Site Supervisors literally wearing black hard hats – will be able to engage in further learning and development
of their skills and knowledge will be sponsored by CHASNZ partners with guest speakers on subjects such as leadership, communication, speaking, planning, learning teams, safety, health and wellbeing.
The events will be held in di erent locations across New Zealand and
peak construction safety organisation CHASNZ is super keen that DIY retailers and builders’ merchants get involved in this aspect of the BlackHat scheme by hosting and supporting these events.
Read our feature on safety & wellbeing starting on page 32 for more information on BlackHat and, to nd out more
about the CPD events, get in touch with CHASNZ CEO, Chris Alderson (chris@ chasnz.org).
WITH THE STARK reality of a slow return to normal as we exited lockdown, and expecting tough times ahead, in an update on 20 May, Fletcher Building announced shock cuts to its Australasian workforce.
Describing the impact on the business of COVID-19 restrictions as “signi cant”, Fletcher Building made no bones that it expects market conditions to deteriorate.
Fletcher Building Chief Executive, Ross Taylor, stated plainly: “We expect COVID-19 will lead to a sharp downturn in FY21 and potentially beyond.
“Looking to the next nancial year, we are planning for an environment that will see a shrinking economy, substantially reduced customer demand across all our businesses and sustained lower levels of productivity.”
Speci cally a ecting the next nancial year (FY2021), Fletcher Building expects NZ residential consents to drop by around 30% to 25,000 in YTD June 2021, alongside a 15% decline in the value of commercial work put in place and a 10% drop in the value of infrastructure as new projects take time to ramp up.
In Australia, despite pre-COVID-19 signs of renewed growth, Fletcher’s expects approvals to fall by a further 15% in FY21 with the value of commercial and infrastructure work declining by similar percentages to New Zealand.
All this comes on top of the negative e ects of the Level 4 lockdown which meant no top line income for the
New Zealand operations and a circa
$55 million EBIT loss in April, while Australian revenues were around 90% of pre-COVID-19 expectations resulting in a break-even month.
Since the move to Level 3 on 28
April, says the company, the market
has been returning but only gradually, with the New Zealand businesses currently trading at around 80% of forecast revenues in May, while Australia continues to trade at around 90% of pre- COVID-19 expectations.
Having noted all this, Fletcher Building’s core manufacturing and distribution businesses are expected to record positive but lower than normal EBITs before signi cant items across May and June.
As a result of all of the above, Ross Taylor emphasised in no uncertain terms: “Like any business facing much lower revenue ahead, we need to reduce our spending to prepare for these tough times,” he says.
“While we looked at all parts of our business to remove costs, regrettably we believe we will not be able to support the same number of people.”
Acknowledging that Fletcher’s will
lose some great people, the CEO says the company nevertheless needs to cut some 10% of its workforce, or around 1,000 positions across New Zealand (including, we later learned, losses in Distribution) and a further 500 in Australia.
www. etcherbuilding.com
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MAY/JUNE 2020 | NZHJ 7