(Reuters) - New Zealand's largest construction company, Fletcher Building <FBU.NZ>, said on Thursday it would consolidate its Australian operations into one division and appoint chief executive of distribution Dean Fradgley as the new division's head.
The new operating model will be introduced on July 1 and is expected to reduce annual overheads across the group by NZ$30 million ($20.6 million), Fletcher said as the company attempts to recover from years of cost overruns in its commercial construction business.
The embattled construction firm maintained its full-year forecast for earnings before interest and tax, excluding its commercial business unit, of NZ$680 million-NZ$720 million.
It said the fiscal 2018 results would include restructuring charges associated with implementation of the new operating model of NZ$85 million-NZ$95 million along with impairment of carrying values of Rocla and roof tile group businesses.
"In FY19 we will focus on stabilising and turning around our existing businesses, while divesting Formica and Roof Tile Group." Chief Executive Ross Taylor said.
He said Fletcher should be "well positioned" to deliver solid performance across the portfolio in fiscal 2020, and return to delivering strong revenue and earnings growth year-on-year by the 2021 financial year.
Fletcher said it has appointed Macquarie Capital as adviser for the sale of Formica group, which was first announced in April.
(Reporting by Susan Mathew in Bengaluru; editing by John Stonestreet and Leslie Adler)
