Fletcher Building : 2018 Fletcher Building Industries Limited Annual Report Download

This report is dated 22 August 2018 and is signed on behalf of the board of Fletcher Building Industries Limited by:

Letter from the Chairman

Financial statements

Notes to the financial statements

Noteholder information

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Sir Ralph NorrisChairman

Bruce HassallDirector

Letter from the chairman.

I am pleased to present the annual report of Fletcher Building Industries Limited (the "Company") for the year ended 30 June 2018.

Fletcher Building Industries is a wholly owned subsidiary of Fletcher Building Limited (the "Group"). The contents of this annual report should be read in conjunction with the Group 2018 annual report which can be viewed at fbu.com.

RESULTS FOR THE PERIOD

Net losses after tax for the year to 30 June 2018 were $35.2 million (2017: $38.1 million). Shareholders' funds decreased to $380.2 million from $414.5 million at 30 June 2017.

BUSINESS ACTIVITIES

The Company has issued capital notes and those funds have been invested in other Fletcher Building group companies. The Company owns 20 per cent of the shares in Fletcher Building Holdings New Zealand Limited which currently holds all of the shares in the Group's New Zealand operating subsidiaries.

During the year the Company issued $150 million of additional capital notes to an institutional investor and those funds were invested in Fletcher Building Holdings New Zealand Limited consistent with the existing capital notes on issue.

FLETCHER BUILDING GROUP PERFORMANCEFletcher Building Limited guarantees all of the capital notes issued by Fletcher Building Industries on an unsecured subordinated basis. The financial performance of the Company should be considered in conjunction with the financial statements of the Group. The Group reported net losses of $190 million for the year ended 30 June 2018, compared to earnings of $94 million in prior year. The decreasein net earnings is due to lower earnings from the Construction division as a result of the recognition of provisions for future losses on construction contracts currently being completed.

The financial position of the Company is dependent on that of Fletcher Building Limited. The provisions recognised during the period in the Construction division have resulted in the Group breaching certain covenants in relation to its borrowings.

This is not expected to impact the Group's ability to provide ongoing support to the Company. Further information on the operations and performance of the Group, including the detailed going concern disclosure note, is available on its website,fbu.com, and I recommend that you take the opportunity to review it.

Sir Ralph NorrisChairman

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Income statement, statement of comprehensive income and statement of movements in equity

Income statement

For the year ended 30 June 2018

Notes	Year ended June 2018 NZ$000	Year ended June 2017 NZ$000
Share of profits / (losses) of associate 5	(10,668)	59,762
Earnings / (losses) before interest and taxation Funding costs 2	(10,668)	59,762 (30,026)
	(34,064)
Earnings / (losses) before taxation Taxation benefit 3	(44,732)	29,736 8,407
	9,538
Net earnings / (losses)	(35,194)	38,143

Statement of comprehensive income

For the year ended 30 June 2018

Notes	Year ended June 2018 NZ$000	Year ended June 2017 NZ$000
Net earnings / (losses)	(35,194)	38,143
Share of associate's other comprehensive incomeTotal comprehensive income / (loss) 5	(632) 37,511
		855
		(34,339)

Statement of movements in equity

For the year ended 30 June 2018

Notes	Year ended June 2018 NZ$000	Year ended June 2017 NZ$000
Total equity at the beginning of the year Total comprehensive income / (loss) Total equity	414,498	376,987 37,511 414,498
	(34,339)
	380,159

The accompanying notes form part of and are to be read in conjunction with these financial statements.

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Ballaanncceeshseheteet

Balance sheet

As at 30 June 2018

A

C

Amounts owed by related companies C

T

N I T

T

L

C A

Amounts owed to C

T

N C TT

E

R RT T

Notes	As at June 2018 NZ$000	As at June 2017 NZ$000
Assets Current assets: Amounts owed by related companies 14 Current tax asset 9	71,565 8,407
		103,000
		9,538
Total current assets Non-current assets: Investment in associate 5	112,538	79,972 843,464
	943,651
Total non-current assets	943,651	843,464
Total assets	1,056,189	923,436
Liabilities Current liabilities: Accrued interest Amounts owed to related companies 14 Capital notes 10	8,938 100,000
		6,827
		19,203
		150,000
Total current liabilities Non-current liabilities: Capital notes 10	176,030	108,938 400,000
	500,000
Total non-current liabilities	500,000	400,000
Total liabilities	676,030	508,938
Equity Reported capital Reserves 6 7, 8	346,000 68,498
		346,000
		34,159
Total equity	380,159	414,498
Total liabilities and equity	1,056,189	923,436

The accompanying notes form part of and are to be read in conjunction with these financial statements.

On behalf of the board 22 August 2018

Sir Ralph NorrisChairman

Bruce HassallDirector

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