Latest / Best of Business / Andrew Reding: Fletcher Building CEO on the company's climbing losses

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Andrew Reding: Fletcher Building CEO on the company's climbing losses · Best of Business

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  Speaker 1: You're listening to a podcast from news Talk ZEDB. Follow
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• 0:16
  Speaker 1: right now.
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  Speaker 2: Fetchure Building is in the red again, the company today
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  Speaker 2: announcing it made one hundred and thirty four million dollar
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  Speaker 2: net loss after tacks for the half year two December.
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  Speaker 2: That's down one hundred from one hundred and twenty million
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  Speaker 2: dollars last year. It's a tough result for the entire
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  Speaker 2: business with the clients basically across all of the different
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  Speaker 2: business units. Andrew Reading as which as chief executive Andrew.
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  Speaker 3: Hello, Hello, nice to meet you're own.
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  Speaker 2: Nice to talk to you too. So you're not selling
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  Speaker 2: enough stuff.
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  Speaker 3: Basically, it's a bit difficult to when the market isn't
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  Speaker 3: there to buy it.
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  Speaker 2: Do you know, do you think the market has bottomed out?
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  Speaker 3: Look, I mean that's a question on everybody's lips. And
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  Speaker 3: we hear some people saying there are green shoots. We're
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  Speaker 3: a bit more nervous about that. There are some businesses
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  Speaker 3: that are seeing early signs of recovery and others aren't
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  Speaker 3: seeing much change in volumes at all. And remember I'm
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  Speaker 3: thinking about both Australia and New Zealand. When I say that.
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  Speaker 3: So with some of the interest rate cuts around October
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  Speaker 3: last year, we did see a small pickup in our
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  Speaker 3: residential and development business, about a seventeen percent increasing sales
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  Speaker 3: in September to December period versus the July and August.
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  Speaker 3: But it's not boom times yet. And I think what
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  Speaker 3: people forget is that even if you start dropping interest rates,
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  Speaker 3: there's a period between in thinking about a house and
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  Speaker 3: it getting built, and that period anywhere between six and
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  Speaker 3: nine months sort of thing.
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  Speaker 2: We've just had Adrian or announce, say another fifty basis
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  Speaker 2: point cut to the ICR. He's talking about another fifty
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  Speaker 2: by midyear, getting down to three by the end of
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  Speaker 2: the year. That'll obviously be good news to your ears.
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  Speaker 2: Welcome news for you.
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  Speaker 3: I assume it has just brought a smile to my
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  Speaker 3: say so we'll have to admit. I think what we
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  Speaker 3: have to remember is that it will take time to
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  Speaker 3: feed through. But it does the line that it's not
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  Speaker 3: a case of when the market change, sorry if the
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  Speaker 3: market changes, but when it changes. So I have no
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  Speaker 3: doubts in my mind that at some stage or other
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  Speaker 3: we will start to see demand taking off of a
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  Speaker 3: lot of what we're doing at the moment in the
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  Speaker 3: cost out exercise, we've been carrying it out. Is the
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  Speaker 3: right size of our business and get it prepared and
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  Speaker 3: ready for any uplift in the market that might happen.
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  Speaker 2: Yeah, you've been cutting costs and you're actually a heat
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  Speaker 2: of schedule. What have you been cutting?
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  Speaker 3: So we've got ninety one million out for the half year,
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  Speaker 3: sixty million of which is in overheads and thirty million
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  Speaker 3: is in cogs. So the cogs is the sort of
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  Speaker 3: variable cost that you might have in supplying product. The
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  Speaker 3: overhead has been a whole variety of activities, including some
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  Speaker 3: heads out, some facilities being shuttle, mothboard, so it's a
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  Speaker 3: whole range of activities.
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  Speaker 2: Obviously, you're going to wait for the market to pick
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  Speaker 2: up again, but you can't sit on your hands while
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  Speaker 2: you do that. So I note that you're going to
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  Speaker 2: review the business parts of the business, including Placemakers. Why
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  Speaker 2: Placemakers and what are you planning?
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  Speaker 3: I think that that was taking slightly out of context.
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  Speaker 3: Placemakers is one of our leading businesses, but what we're
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  Speaker 3: doing there is Historically, the number of branches that were
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  Speaker 3: managed by JV Partners has been reduced, and what we're
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  Speaker 3: going to do now is actually increase the number of
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  Speaker 3: JV partners that we have, especially in the rural branches.
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  Speaker 3: And we find that if you have somebody who is
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  Speaker 3: as skin in the game, then they pay absolute attention
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  Speaker 3: to the branches profit loss account and they give excellent
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  Speaker 3: customer service. So we're just going to tweak the model
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  Speaker 3: rather than review it.
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  Speaker 2: Right, So having someone local, actually he makes a big
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  Speaker 2: difference to a business.
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  Speaker 3: Huge, huge difference.
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  Speaker 2: Yeah, interesting, Andrew, thank you very much for that. Really
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  Speaker 2: appreciate your.
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  Speaker 3: Time, No problem is all. Nice to talk to you.
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  Speaker 2: That's Andrew Reading, chief executive at Flitcher. Building with us
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  Speaker 2: tonight
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