Analysis: 1News' Katie Bradford takes a look at another tough day for the construction giant.
"The buck stops with us." That’s been the message from the chief executive and chairman of Fletchers this morning as they both fell on their swords.
Ross Taylor, the CEO, and chairman Bruce Hassall said they have to take accountability and responsibility for the big problems Fletcher Building is facing. They'll resign or retire in six months’ time, unless replacements are found before then.
It comes as the company posts a massive loss. After making $92m the previous year, the loss now is $120m. There's no way to dress that up, it is a very bad day for Fletchers.
So what went wrong? The company is putting it down to a few factors.
There's the New Zealand International Convention Centre, which has had another cost blowout of over $160m, coming on top of numerous delays in the wake of the devastating 2019 fire.
Ross Taylor is retiring after recent blows to the construction giant. (Source: 1News)
Taylor said today that it should, finally, be completed by the end of this year.
There’s also big problems with a plumbing business in Australia – Tradelink. Fletcher is going to try and sell that business but it's already taken a big hit on it.
Construction fall
And then there’s been a 20% fall in volume in construction here in New Zealand.
The company's woes have had a major impact on the economy and it will create tremors across the construction sector. People will be nervous when you have such a giant facing these problems.
Taylor said there was no way to predict the double whammy of the fire and its flow-on impacts, and the pandemic.
Now, post-Covid, there’s been a bit of a hit to the construction sector as well.
There is, though, some hope, some glimmer that things might start to get better - the housing market is picking up, construction is stabilising a bit. But for the wider economy it’s not good news. There will be questions about whether there will be job losses.
Also today ASB posted a 12% drop in its profits – another sign the economy is on shaky ground.
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