(Reuters) - New Zealand's Fletcher Building Ltd said on Wednesday annual earnings from its Australian business would be worse than expected and the company is planning a share buyback of up to NZ$300 million ($199.32 million).
The Australian business, which accounts for more than a third of the company's revenue, will continue to experience a slowdown, New Zealand's largest builder said.
In February, Fletcher Chief Executive Officer Ross Taylor said weakness in the firm's Australian business was expected to continue into fiscal 2020 as demand in the country's residential market continued to slow.
The company expects fiscal 2019 earnings before interest and tax of about NZ$55 million from its Australian unit. The company reported earnings of NZ$114 million last year.
"The combination of the falling residential market and poor discipline in certain areas has led to a worse than anticipated starting point for the Australia turnaround," the company said in a presentation on Wednesday.
Fletcher is expected to start the buyback after its fiscal 2019 results. The annual results are due in August.
The Auckland-based company confirmed its dividend policy was unchanged, with a targeted pay-out ratio of 50% to 75% of net profit.
($1 = 1.5051 New Zealand dollars)
(Reporting by Niyati Shetty in Bengaluru; Editing by Shounak Dasgupta)
