Andrew Reding: Fletcher Building CEO on the company's climbing losses

Fletcher announced a $134 million net loss after tax for the December 31, 2024 half-year, up on the previous $120m net loss.

Losses climbed partly due to the disastrous Perth leaky pipe problems after Fletcher’s Iplex finalised and signed a $170m provision in this 2025 financial year in what it called the Western Australian plumbing industry response.

Fletcher Building CEO Andrew Reding says many businesses are seeing early signs of recovery - but he's still apprehensive about the company's economic fate. 

LISTEN ABOVE

See omnystudio.com/listener for privacy information.

Episode Transcript

Speaker 1 (00:00):
Right now. Fitcher Building is in the red again, the
company today announcing it made one hundred and thirty four
million dollar net loss after tacks for the half year
two December. That's down one hundred from one hundred and
twenty million dollars last year. It's a tough result for
the entire business with the clients basically across all of
the different business units. Andrew Readings, which as chief executive Andrew.

Speaker 2 (00:20):
Hello, Hello, nice to meet your own.

Speaker 1 (00:23):
Nice to talk to you too. So you're not selling
enough stuff Basically.

Speaker 2 (00:28):
It's a bit difficult to when the market isn't there
to buy it.

Speaker 1 (00:31):
Do you know, do you think the market has bottomed out?

Speaker 2 (00:35):
Look, I mean that's a question on everybody's lips. And
we hear some people saying there are green shoots. We're
a bit more nervous about that. There are some businesses
that are seeing early signs of recovery and others aren't
seeing much change in volumes at all. And Rember, I'm
thinking about both Australia and New Zealand when I say that.

(00:56):
So with some of the interest rate cuts around October
last year, we did see a small pickup in our
residential and development business about a seventeen percent increasing sales
in September to December period versus the July and August.
But it's not boom times yet. And I think what
people forget is that even if you start dropping interest rates,

(01:19):
there's a period between in thinking about a house and
it getting built and that period anywhere between six and
nine months. Sort of thing.

Speaker 1 (01:28):
We've just had Adrian or announce, say another fifty basis
point cut to the ICI. He's talking about another fifty
by midyear, getting down to three by the end of
the year. That'll obviously be good news to your ears.
Welcome news for you.

Speaker 2 (01:40):
I assume it has just brought a smile to my fay,
so we'll have to admit. I think what we have
to remember is that it will take time to feed through.
But it does underline that it's not a case of
when the market changed, sorry if the market changes, but
when it changes. So I have no doubts in my mind.
At some stage or other we will start to see

(02:01):
demand taking off of a lot of what we're doing
at the moment in the cost out exercise we've been
carrying it out, is the right size of our business
and get it prepared and ready for any uplift in
the market that might happen.

Speaker 1 (02:14):
Yeah, you've been cutting costs and you're actually a head
of schedule. What have you been cutting?

Speaker 2 (02:20):
So we've got ninety one million out for the half year,
sixty million of which is in overheads and thirty million
is in cogs. So the COGS is the sort of
variable cost that you might have in supplying product, and
the overhead has been a whole variety of activities, including

(02:42):
some heads out, some facilities being shuttle mothboard, so it's
a whole range of activities.

Speaker 1 (02:48):
Obviously, you're going to wait for the market to pick
up again, but you can't just sit on your hands
while you do that. So I note that you're going
to review the business parts of the business, including Placemakers,
Why placemakers and what are you planning.

Speaker 2 (03:00):
I think that that was taken slightly out of context.
Placemakers is one of our leading businesses. But what we're
doing there is historically the number of branches that were
managed by JV partners has been reduced, and what we're
going to do now is actually increase the number of
JV partners that we have, especially in the rural branches,

(03:22):
and we find that if you have somebody who is
as skin in the game, then they pay absolute attention
to the branch's profit loss account and they give excellent
customer service. So we're just going to tweak the model
rather than review it.

Speaker 1 (03:36):
Right, So having someone local, actually he makes a big
difference to a business.

Speaker 2 (03:40):
Huge, huge difference.

Speaker 1 (03:41):
Yeah, interesting, Andrew, thank you very much for that. Really
appreciate your.

Speaker 2 (03:44):
Time, no problem at all. Likes to talk to you.

Speaker 1 (03:48):
That's Andrew Reading, chief executive atwitcherre building with us tonight
for more from Hither Duplessy Alan Drive, listen live to
news talks it'd be from four pm weekdays, or follow
the podcast on iHeartRadio.

Speaker 2 (04:00):
O