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Fletcher Building has forecast savings of around $15 million from an Australian divisional restructuring and a review of the company’s corporate structure announced today. 

“Something for everyone,” said one institutional investor of the changes. 

As part of its ongoing strategic review, the company said its Australian division would be axed as a standalone unit. 

Fletcher would create two new transtasman divisions: light building products and heavy building materials. 

The first would include most of the company’s New Zealand building products businesses - Comfortech, Winstone Wallboards, Iplex, Laminex and Wood Products combined with Australian businesses Oliveri Australia, Iplex Australia, Laminex Australia and Fletcher Insulation from the former Australian Division. 

Hamish McBeath, previously New Zealand building products chief executive, would lead this division. 

The second unit would include concrete-related businesses like Winstone Aggregates, Golden Bay Cement, Firth Concrete and Humes, the New Zealand steel businesses, and Australia’s Stramit. 

Thornton Williams, the concrete division chief executive, would lead this division. 

Due to the restructuring, former Australian division chief executive Gareth O’Reilly will leave the company. 

New Fletcher Building CEO Andrew Reding. (Image: NZSA) 

Fletcher CEO Andrew Reding acknowledged O’Reilly’s contributions. 

“Alongside this restructuring, a further review of the company’s corporate structure has been carried out and it is anticipated that this will deliver approximately $15 million annualised savings in structural costs in the short term which are in addition to the approximately $200m of cost out targeted for FY25,” the company said today. 

The review is ongoing, and the group will continue to identify opportunities for further material cost reductions. 

Investors will get more information at the company’s investor day on June 24. 

Reding gave a downbeat update on the business. 

Since the December 31, 2024 half-year results were issued, Fletcher’s businesses “have seen no significant improvement in market conditions, with market volumes continuing to be challenging due to macroeconomic uncertainties and the lack of any material momentum in the recovery of New Zealand’s economy”. 

The company’s businesses operating in the commercial and infrastructure segments continue to face reduced or deferred spending, partly due to recent weather events and reduced sub-division activity, Reding said. 

Residential property sales also remain at subdued levels, reflecting lower levels of liquidity across the market, he said. 

In March, Fletcher announced its much-vaunted Clever Core prefab house-building factory at Wiri in South Auckland will shut, to be replaced next year by a PlaceMakers frame and truss plant. 

Clever Core has not worked out and would close by June 30. 

“Fletcher Building has made a recent and difficult decision to close Clever Core, our off-site manufacturing business,” a spokeswoman said. 

Anne Gibson has been the Herald‘s property editor for 25 years, written books and covered property extensively here and overseas.