Fletcher Building to sell disappointing Tradelink

by | Feb 20, 2024

Ross Taylor – Fletcher Building.

The New Zealand building company Fletcher Building, which owns the Tradelink retail plumbing supplies business, has revealed the subsidiary is up for sale.

Fletcher Building made the announcement on February 14th when it released its financial results for the six months to December 31. The six-month period saw its total revenue fall only one per cent compared to the same time last year, coming in at NZ$4.24 billion (A$3.98 billion), however, it posted a net loss after tax of NZ$120 million (A$113 million), down from a net profit after tax of NZ$92 million (A$86 million) in the second half of 2022.

Fletcher Building Chief Executive Officer Ross Taylor said one of the factors behind the loss was Tradelink.

“A full review of the Australian Tradelink business over the half year combined with disappointing results led to a $122 million non-cash impairment and write-down in its carrying value. We have concluded that whilst we believe there is a compelling opportunity for Tradelink, further ownership of the business is not in line with the strategic objectives of Fletcher Building. Consequently, we intend to commence a divestment process for Tradelink shortly,” he said.

Tradelink is Australia’s oldest plumbing supply retailer, having opened more than 150 years ago and has more than 100 showrooms and 230 branches across the country. Fletcher took ownership of the plumbing supplies and bathroom renovations retailer when it bought Tradelink’s parent, Australian building supplies company Crane Group in 2011.

The announcement comes as a shock after just five years ago Mr Taylor had told The Australian Financial Review that the future of the Tradelink business was “well on the road to recovery”.

Tradelink Executive General Manager, Luke Naish took to Facebook to share the news and express it as an opportunity for the future of the business.

“This week it was announced that Fletcher Building is intending to commence a sale process for the Tradelink business. This decision represents a genuine opportunity for our business and one that the team and I believe is the right one for the Tradelink business longer term.”

“There is no impact to our people, the way we do business or our ability to service our customers and partner with our suppliers as a result of this sale process. We have a long-term strategy for growth in place and this remains clear and consistent, focused on our people and customers,” he said.

“This business has a compelling future and our team and I are excited about what this opportunity represents for us,” Mr Naish said.

Fletcher Building is listed on both the New Zealand Stock Exchange and the Australian Securities Exchange. Aside from the write-down on Tradelink, the business blamed weakness in New Zealand residential building and a cost blowout in its New Zealand International Convention Centre build for the poor result.

Along with the release of its financial results, Fletcher Building also announced subsequent changes to the business’s leadership and board, with Ross Taylor giving notice of his retirement and Chairman Bruce Hassall stepping down from the Board at the Company’s Annual Shareholders Meeting later this year.