News | Business
26 Jun 2017 14:02
NZCity News
NZCity CalculatorReturn to NZCity

  • Start Page
  • Personalise
  • News
  • Sport
  • Weather
  • Olympic Games
  • Ski Report
  • Shopping
  • Jobs
  • Horoscopes
  • Lotto Results
  • Photo Gallery
  • Site Gallery
  • TVNow
  • Dating
  • SearchNZ
  • NZSearch
  • Crime.co.nz
  • RugbyLeague
  • Make Home
  • About NZCity
  • Contact NZCity
  • Your Privacy
  • Advertising
  • Login
  • Join for Free

  •   Home > News > Business

    Answers sought on Fletcher $110m downgrade

    Shareholders Association says Fletcher Building's $110m downgrade leaves investors with a lack of detailed answers and raises questions about chief executive.

    20 March 2017

    The New Zealand Shareholders Association says Fletcher Building's announcement of a $110 million downgrade to full-year earnings guidance leaves investors with a lack of detailed answers and raises questions about chief executive Mark Adamson's performance.

    On a conference call on Monday, Mr Adamson said he "took full responsibility for the current situation" which led to the downgrade just four weeks after the company affirmed its full-year forecast at the release of its interim results.

    Monday's announcement, which wiped more than $650 million off its market value, mainly related to two major contracts in Fletcher Construction's buildings and interiors unit, which the company has declined to identify.

    NZSA CEO Michael Midgley said the announcement failed to explain how such a massive change has come about.

    The "lack of information in the announcement including whether the contracts concerned are ongoing or completed gives them no comfort about the future," he said in a statement.

    "The absence of any specific details on the reversal of fortunes and the tone of the announcement to the market also suggests that the problems may be systemic.

    "In any event, the second downgrade in short order raises clear questions around the ability of the chief executive to remain in the role," Mr Midgley said.

    "The NZSA will ask the company for an early meeting for a clearer explanation of the issues and will be seeking to ensure that accountability rests where it should."

    Fletcher has cut its full-year operating earnings forecast by $110 million to a range of $610m to $650m, saying the revised guidance "is due to the identification of additional estimated losses and downside risk in the buildings and interiors (B&I) business unit of the construction division".

    Fletcher Construction's major projects include the $300 million Justice and Emergency Services precinct in Christchurch, which was due to be handed over at the end of this month, but is now not expected to open until the third quarter of 2017.

    Other projects include Auckland's convention centre and Hobson Street hotel, a $700 million contract, the $425 million Commercial Bay development in Auckland for Precinct Properties, and roading work including the Waterview Connection, and Puhoi to Warkworth.

    Fletcher shares were recently down about 10 per cent at $8.28.

    © 2017 NZN, NZCity


     Other Business News
     26 Jun: NZ King Salmon lifts earnings guidance
     26 Jun: NZD edges up amid bets on stronger kiwi
     26 Jun: Tower in trading halt as Vero lifts offer
     25 Jun: Moeraki Boulders gets speed control
     25 Jun: Posties' union delivers NZ Post broadside
     25 Jun: Kiwifruit class action headed to court
     25 Jun: Call to track building materials
     Top Stories

    RUGBY RUGBY
    All Blacks show Hurricanes the way More...


    BUSINESS BUSINESS
    NZ King Salmon lifts earnings guidance More...



     Today's News

    Politics:
    Donald Trump, Narendra Modi parallels excited conservative Hindu nationalist group 13:57

    Golf:
    Ko slips further down world rankings 13:47

    Accident and Emergency:
    Otago plane crash investigation to begin 13:27

    International:
    Bali bombing: Guantanamo Bay detainee charged over 2002 attack, Julie Bishop welcomes move 13:17

    Boxing:
    Parker to fight Fury in Manchester 13:07

    Sailing:
    Dawson bronze wraps up World Cup regatta 12:27

    International:
    The silent partner: What it was like for journalist Eliza Harvey when her correspondent husband was shot 11:57

    Law and Order:
    Sir Ngatata Love's appeal dismissed 11:57

    Business:
    NZ King Salmon lifts earnings guidance 11:07

    Sailing:
    Team NZ must keep improving: Burling 10:48


     News Search






    Power Search


    © 2017 New Zealand City Ltd