Fletcher Building Stock

Thank you for standing by, and welcome to the Fletcher Building FY '26 Full Year Results Briefing. [Operator Instructions]

I would now like to hand the conference over to Mr. Andrew Reding, Managing Director and Group Chief Executive Officer. Please go ahead.

Good morning, and welcome to the presentation of our full year results for the 12 months ended 30th of June 2026. Setting the agenda for today, I'll cover off the 2026 financial year and the progress we've made against our strategy. I'll then talk to the divisions and our stakeholders. Will Wright, our Group CFO, will then take you through our financial results in more detail. And finally, I'll return for our outlook, after which we will take questions.

Before we get into the detail, let me give you a quick overview of the year as I see it. The end of financial year '26 signifies the end of the first stage of our turnaround. The first stage was the initial hard work to turn around this group, and we have now completed that. We have progressed with the portfolio simplification. We have made ROIC a discipline in our business. We've put a focus on performance. And we've taken out a major first tranche on cost. We have moved quickly and decisively, and we now have a fitter, leaner organization. The next stage is going to be about finding and proving up where growth comes from inside the core and continuing to pursue portfolio simplification opportunities.

Turning to Slide 5. There are 5 points I want to make sure I get across today. We have delivered a steady performance in a tough macro environment. We have executed well and progressed the strategy consistent with what we set out at our Investor Day last June. We've continued to strengthen the balance sheet, and net debt is now inside our target range. Group ROIC has improved, although there is still more work to do on this. And operating cash flows were strong, albeit with some offsetting legacy project costs.

Moving to Slide 6. There is no getting away from the fact this has been a challenging economic environment. Back at the start of this calendar year, we saw signs of the start of a recovery, but events in the Middle East have since caused a drop in economic momentum for both New Zealand and Australia. In the context of this backdrop, we have developed a respectable performance.

Will is going to talk to the financials later, so I'll just focus on 3 measures for now. Firstly, net earnings were $228 million against a loss of $419 million last year. This is our first positive earnings result since financial year '23, the lack of impairments being the main driver. Secondly, net debt was $637 million, down from $999 million, which puts us inside the $400 million to $900 million range we set at the Investor Day. That came mostly from improved operating cash flows, property sales, and most importantly, divestments. Thirdly, ROIC, our core strategic measure, was 5.3% at the group level, 4.7% if you exclude land sales. We're just starting to head in the direction, but there is more to be done, and we have very clear plans to improve ROIC at each of our business units.

Slide 7. At the Investor Day last June, we set out what we were going to do, and I won't go through every item on the page. The portfolio work is well in train with the construction divestment completing sooner than our own expectations. The cost and structure work is well advanced. NZICC is handed over. And the roughly 15 remaining legacy projects are now provisioned. Delivering an asset to the NZICC's quality despite the setbacks and challenges along the way, while also getting our arms around the remaining retained legacy construction projects, has been a substantial undertaking.

I am proud of what the team has achieved. No single item on this list has got this here. It's the aggregate of all of them. Clearly, the major initiative for the year was construction. And I don't think anyone should underestimate what coming out of that does for our ability to perform as a group. As well as the financial drain, construction was costing the whole organization a lot in time and attention, monitoring its risk profile, managing the legacy projects and negotiating settlements with significant distractions from our core divisions. I know you'll have questions on Residential and Development. And what I can say is that we are working through the options to get the best outcome for shareholders.

One more thing from the future column. It says further decentralize corporate functions. There is still more to do, but we're getting closer to an optimal balance. The reality is that some centralized corporate functions do carry real economies of scale, but I can assure you we are still running the ruler over everything. With respect to dividends, we will look to reset the dividend policy once we begin generating positive sustainable free cash flow and balance sheet targets are met.

Moving to Slide 8 with financial year '26 operational highlights. It's been a busy year with many highlights, so I'm just going to pick out 3. The first is Cavendish Drive. Our new Frame & Truss plant in Auckland is now operational, and it gives us technology no one else has in the New Zealand market. We have been selling Frame & Truss below cost. So every extra unit we sold made the problem worse. The Cavendish Drive plant changes that.

The second is The Urban Quarry, our network of metro collection sites for dealing with demolition waste. We opened a new site at Tamahere during the year with tonnage up 28% and cleanfill up 35%. This is the start of a real position in the circular economy, and it springboards off the capability that Golden Bay Cement already has in firing alternative fuels. Third is Laminex Australia, where disciplined structural cost out and site rationalization have improved earnings quality and positioned the business for margin and ROIC uplift.

Slide 10, divisional performance. Given the challenging macro environment, this was a robust performance by our manufacturing divisions. Whilst these divisions performed well, the amount of red arrows highlights that more work needs to be done across the wider portfolio, especially on returns. I'll be covering the divisions individually over the next few slides.

Moving to Slide 11. In our Light Building Products division, earnings grew 22%. Additions and alterations volume and activity in the rural sector offset weaker residential construction activity in the North Island, while the South Island and Australia performed relatively well. Winstone Wallboards grew volumes 4% on strong South Island demand, again delivering double-digit returns. While we generally had continued volume recovery across multiple businesses in the second half of the year, I wanted to call out Waipapa Pine volumes. Please refer to the chart on the right and the line in light green. This is an example of a business that's benefited from our wider portfolio leverage. PlaceMakers has been able to take in a greater volume of product, which illustrates the type of synergies we can create internally, owing to our critical mass in the markets in which we operate. Our insulation businesses have performed well with Fletcher Insulation in Australia reaching a double-digit ROIC.

Slide 12, Heavy Building Materials. Heavy Building Materials also experienced earnings growth of 8% versus the prior year. Winstone Aggregates had a material improvement in the second half, generating a double-digit ROIC, driven by increased project activity and market share growth at The Urban Quarry, which I mentioned before. Firth continued to concentrate on long-term customer relationships. Lower input energy costs improved earnings, while the 12-month volume average, shown in a solid gray line, grew in the last quarter. The in-quarter growth on a nontrailing average basis was comparable to the wider reported market stats by Stats NZ. However, we know that the concrete piling market, which we take a large share in Auckland, has seen delays.

Moving to Slide 13 on Distribution. Distribution performance improved materially in the second half of the year, returning to profitability with PlaceMakers regaining lost share. In the first half of the year, we spoke about needing to improve our operational efficiency and capability in our Frame & Truss operations. And we now have it with our new operation at Cavendish Drive. The new plant will help serve the Auckland market, possessing technology uniquely available to Fletcher Building in New Zealand. With a lift in Frame & Truss volumes, it is estimated that every dollar of Frame & Truss sales will be converted on average into $4.20 of higher-margin balance of house sales. Going forward, the structural cost of the division will benefit from both labor productivity improvement from the new plant, as well as a flatter organizational structure. A further lever for growth is our regional joint venture branch model, which we reestablished this year, commencing with 4 branches in Southland.

Slide 14, Resi and Development. Turning to our Residential and Development division. The market in Auckland remained subdued with elevated inventories and pricing pressures, while Canterbury remained resilient, which is all in line with what we're seeing with the rest of the portfolio. Development mix transitioned during the year, influencing volume and margin. And I will note, there were no new land commitments entered into during the year, and all land payments related to prior commitments.

Next, let me talk about our stakeholders. Our success depends on our people, our customers, our communities and our shareholders. Moving to Slide 16. Before discussing anything else, I want to acknowledge the tragic loss of Max, a team member who passed away following a crane incident in Vanuatu last July. Although our TRIFR of 3.7 is very credible, the loss of Max is totally unacceptable and reinforces the scale of commitment to safety required across the entire organization. We reviewed all 339 of our locations across Australia and New Zealand as part of our ongoing focus on improving our safety performance. And moving forward, we are conducting a further safety system review and refreshing our Protect framework for leaders in the business.

Slide 17. There's no doubt the most important part of our organization is our people. You cannot operate a decentralized structure without a capable leadership team and general manager cohort. We have spent a lot of time and focus on our leaders, and their eNPS score is a world-leading 59. I also wanted to mention the secret weapon, that is our Employee Education Fund, which, due to its external funding, enables us to invest in training and performance of our colleagues independent of the organization's financial performance.

And thirdly, I want to acknowledge just how much positive change I've seen coming back to the organization after my years away. We are now more diverse than ever with active support for [ pride ], reconciliation in Australia and women making up around 24% of all leadership roles in the company.

Slide 18. Our people also reflect the communities we operate in. We have a role to play in both New Zealand and Australian societies, and we try to do our bit to make a positive impact. On the page, you'll see just a small example of the good work our teams are doing across our many locations, from supporting children living with critical illnesses to helping sports clubs raise roofs, to providing support to communities experiencing a food insecurity.

Slide 19, our customers. On top of our community work, we are proud of the relationships we forge with our customers and the products we bring to help build the future in New Zealand and Australia. Again, this is just a small example of our latest projects spanning a huge range of work, from pouring concrete for renewable wind farms to laying down the building blocks critical to water infrastructure.

Moving to Slide 20. We continue to be committed to our environmental targets. It's just good business. And 76% of our revenue comes from sustainably certified products. Golden Bay Cement is among the top quartile of low-carbon cement producers globally and received the Carbon Reduction Award from the Concrete NZ Conference Awards in 2025. As previously mentioned, other initiatives such as The Urban Quarry are great examples of our circular economy ambitions.

I will now pass on to Will Wright, who will cover our financial performance.

Thank you, Andrew, and good morning, everyone. At a high level, FY '26 was a year of meaningful progress for Fletcher Building. Market conditions across New Zealand and Australia remained challenging, but the group delivered a stable financial result, materially improved cash generation and continued to simplify the portfolio.

Turning to Slide 22, the income statement. Revenue from continuing operations increased 7.3% to just under $6 billion, reflecting improved volumes across the core manufacturing and distribution divisions. EBIT before significant items increased by $85 million to $414 million, with the core manufacturing and distribution divisions contributing $46 million of earnings improvement year-on-year. Excluding preannounced property sales, EBIT for the year was $362 million, an 11% improvement on FY '25. Pleasingly, all continuing operations businesses were profitable on an EBIT basis in the second half. 13 of our 19 core business units improved ROIC compared with FY '25. And Winstone Wallboards, Fletcher Insulation, Winstone Aggregates and ColorCote, all achieved double-digit ROIC. At a group level, however, returns remain below acceptable levels. Earnings per share were positive at $0.212, the first positive EPS result since FY '23.

Now turning to Slide 23, discontinued operations. These results primarily reflect the Construction division, Reinforcing and Wire and Vivid Living, all of which have been presented separately to provide a clearer view of the continuing group. The most significant event was the sale of the Construction business, which completed on the 29th of May. Residual legacy vertical construction liabilities remain within the discontinued operations as we complete the wind down. The Reinforcing and Wire transaction is expected to complete within the first quarter of FY '27, and the Vivid Living divestment process continues. Overall, these actions simplify Fletcher Building and improve the quality of future earnings and cash flows.

Turning to Slide 24. Total group significant items were $40 million. These include Iplex Western Australian pipes legal costs, the previously announced Cheltenham and Monkland property exits, silicosis-related claims, Taupo OSB transition costs and the remaining Winstone Wallboards property rationalization costs. Corporate significant items included divestment costs and residual surplus SAP licenses. These costs are largely associated with legacy matters, portfolio actions or investments required to position the business for future performance. In FY '27, it is proposed that the group moves towards an IFRS 18 compliant P&L and, therefore, will no longer have significant items as a category of expense.

Slide 25 shows the primary drivers of the year-on-year movement in EBIT. Improved market volumes contributed $75 million and pricing added a further $13 million. These benefits reflect improved A&A volumes in our core and market share gains in select categories, as well as continued commercial discipline. The gains were partially offset by lower residential earnings and the net overhead cost inflation. Land sales contributed an additional $49 million year-on-year, reflecting active management of the property portfolio and our focus on releasing capital where appropriate.

Turning now to Slide 26, the balance sheet. Investment capital reduced to $5.5 billion from $5.8 billion a year ago. This reflects continued portfolio simplification, lower lease assets and liabilities and disciplined capital deployment. Inventory reduced by approximately $75 million and debtors were also lower, reflecting a strong focus on working capital management across the business. Residential and Development invested capital increased as we settled previously committed land purchases and joint venture profit share arrangements. This was largely offset by lower build and land stock on hand. Previously contracted land settlement payments were $236 million in FY '26. Going forward, settlements are expected to be $110 million in FY '27, of which $75 million will be in the first half and $37 million in FY '28.

Turning to Slide 27, cash flows. Net cash from operating activities increased to $715 million, up from $214 million in the prior year. This improvement reflected stronger earnings across the core manufacturing and distribution divisions, increased proceeds from surplus land sales, and materially lower cash outflows associated with legacy projects. Normalized operating cash flows were $707 million. This excludes $64 million of inflows from discontinued operations and $56 million of outflows relating to legacy matters. Funding costs were lower year-on-year. And net debt was reduced from $999 million to $637 million. We are converting earnings into cash more effectively. And the portfolio actions taken in FY '26 have materially improved financial flexibility.

Moving to Slide 28 and central costs. Reducing central costs has been a major focus over the last 18 months. Technology costs reduced by 20% on a continuing basis, driven by more efficient use of licenses, lower project spend and the simplification of the technology operating model. Corporate costs before recharges reduced by 21% as we simplified the way we run the business and pushed greater accountability into the divisions. The objective is not simply to take cost out, but to make Fletcher Building faster, more accountable and simpler to manage.

Turning to capital expenditure on Slide 29. Capital expenditure came in below guidance at $288 million in FY '26. Excluding OSB and divested operations, capital expenditure was $138 million. Investment in quarry consenting and stripping was $24 million. This was lower than previously indicated due to the timing of quarry land settlements. Looking forward to FY '27, capital expenditure is expected to step down materially to approximately $170 million, including around $40 million for OSB, plus around $30 million of stripping and quarry land acquisitions. This reflects a shift towards a more disciplined cash-focused business.

Turning to funding and liquidity. We've made substantial progress simplifying the group's capital structure and improving financial flexibility. Whilst '28 maturities remain elevated, this reflects the transitional nature of the capital structure. We're currently finalizing a refinance, and the post-refinance weighted average maturity will increase from 1.6 years to 2.6 years.

Finally, turning to the net debt bridge. Net debt now sits in the middle of the target range at $637 million. Inflows from divestment of Construction division and property sales were partially offset by capital expenditure, lease payments, funding costs and working capital investment in Resi and Development. Importantly, the reduction in net debt was achieved while completing major capital projects. As these become operational and CapEx reduces, we expect stronger free cash flows over time.

In summary, FY '26 delivered improved earnings, stronger operating cash flow and lower net debt. We are not yet producing adequate returns, but the group is now in a stronger position with lower risk, better financial flexibility and clearer accountability for capital allocation.

I'll now hand back to Andrew to discuss the outlook and priorities for '27.

Thanks, Will. As Will mentioned, we have a robust balance sheet to navigate whatever is in front of us. Let me now turn to what we are seeing in our markets. Slide 33 splits by what we are seeing by market. There is detail there for you to read, so let me just give you the shape of it.

I'll start with New Zealand. Firstly, residential. Consents are back above 40,000 for the first time since 2023, and our volumes have lifted through the second half. The interesting part is that these consents are not converting into activity the way they normally would. Our read is that uncertainty is causing people to hold off already consented projects, given high inventory levels, rather than start them. That said, additions and alterations activity is providing a welcome offset and remains strong. Meanwhile, commercial remains weak, not much change there. And infrastructure is the offset with it just starting to bubble. Major roading and social infrastructure work is continuing. For example, the second Ashburton Bridge, the Hawke's Bay Bridge program, Northern Corridor, RiverLink, Otaki to north of Levin, and hospitals at Whangarei, Nelson and Dunedin.

For Australia, population growth and underlying housing demand are supportive. Interest rates and affordability are not. Also, the picture varies more than usual by state. Renovation activity, however, appears more robust, mirroring what we're seeing in New Zealand. Meanwhile, commercial construction in Australia is supported by health, education and data center demand, concentrated in New South Wales and Victoria. This is partly offset by a contraction in office retail and industrial projects. And in terms of infrastructure, there is a strong pipeline, including the 2032 Brisbane Olympics. Growth is also expected to be concentrated in energy transmission, water and social infrastructure.

With regard to infrastructure in both countries, I will point out that our exposure to this sector is smaller than both the residential and commercial sectors. The point I would leave you with is this. The reason the last few years have been so hard is that residential, commercial and infrastructure all came down at the same time in both countries. They are now moving again at different speeds, but we do not need all 3 to turn at once to make progress from here.

That brings me to the outlook on Slide 34. As we look ahead to financial year '27, the operating environment remains volatile across New Zealand and Australia. Volumes did recover through the second half of financial year '26, although I would note that some of that was pricing pulling demand forward. It is too soon to say whether any recent improvements will be sustained. Customers continue to complete projects already underway, but many developers and businesses are adopting a wait-and-see approach when it comes to starting new projects. In a similar vein, I urge analysts to be careful with simply tracking consent numbers. We are not yet seeing these translate into project starts. But this could create a pent-up demand effect down the track.

Economic, political and geopolitical backdrop remains uncertain, and we expect it to weigh on the first half, especially with the upcoming general election in New Zealand and the Victorian state election in Australia. But as you've hopefully seen today, we are focused on controlling what we can control. Putting that all together, we do not expect a meaningful recovery in underlying volumes until calendar year 2027.

Finally, I would add that the work we've done since late 2024 has left us with a lower cost base and a leaner operating model. This means we have more insulation during challenging times like these, and it also means we have operating leverage whenever that demand does return.

Slide 36, conclusion. Now to wrap up, back to my 5 takeaways on Slide 36. We've delivered a steady performance in a tough macro environment. We executed against our strategy. The balance sheet has been strengthened. Group ROIC improved. And operating cash flows were strong. As I said at the beginning, financial year '26 is the end of the first stage of our turnaround. The next stage is in front of us, and the job now is proving where the growth comes from inside the core and exploring opportunities to further simplify the portfolio.

Finally, this has been another demanding year. And I would like to say well done to all our team for performing under both major organizational change and a challenging macro environment.

With that, thank you for your time, and we're happy to take questions, but please do limit it to 2 per person.

[Operator Instructions] And today's first question comes from Ramoun Lazar with Jefferies.

Just a couple for me. The first one is, just if you could help us maybe bridge that earnings gap into the first half '27. Obviously, in the second half, you had a meaningful step-up in earnings -- sustainable earnings somewhere just north of $200 million. I guess, what level of permanent cost out or cost out carries into the first half? And any sort of offsetting factors from that volume pull-forward that you can point to just help us frame what that first half number could look like?

Yes. I'm uncomfortable giving you too much guidance on the first half because we think the underlying situation is very volatile. So in terms of cost out, I think we've taken structural of about 50-ish. Any update on that?

Yes. I think -- look, I think the market remains uncertain. And so, looking forward, what we undertake to do is to sort of update the market on a regular basis. But it is dependent on a lot of things. It's a really uncertain macro environment. It's also coming into election year in New Zealand as well. And so, the market tends to soften as we go into the election in November.

Just your point on cost out, you'll see that we had a net $23 million of benefit in FY '26. And so, we're constantly having to take cost out across the business to fight against inflation at the moment that isn't fully recovered through price increases. So whilst we've taken significant cost out, our prices also continue to move.

Right. Okay. You can't provide us anything else, Will? I mean, just given it's a meaningful step-up into the second half and then we're just trying to frame what that first half number could at least look like, given all the work.

Yes, there's a reason why we don't provide guidance at the moment is it's just really uncertain. And I think I've said to you previously, at the end of February, I allowed myself to breathe a bit of a sigh of relief, and then the war kicked off. And so, it still remains volatile. What we don't quite know at the moment as we sit here today is, how much of that last quarter was market recovery and how much was related to either share gain or pull-forward of volumes because we put through a lot of price increases over that last quarter. And so, what that tends to do is, people buy up in advance of price increases.

Okay. Got it. And just one more, Will, for you. Just on financial costs into next year, your interest costs. I mean, you've obviously done a lot of heavy lifting on the debt number. So just anything you could help us there with?

Yes. No, it's a good question. I'd just point you to Note 2.1 of the accounts. You'll see that we made a couple of changes around accounting policies. And so, we've moved the gain on the pension asset from what used to be in corporate overheads into the interest line so that corporate overhead is a cleaner line. And also, we've moved FX movements on a U.S. dollar ship lease that we have as well into the interest line. And so, there are some positive numbers that are offsetting the interest cost in the interest line. Probably, as we sit here today, a little bit uncertain around what forward earnings look like, and therefore, cash flows. We expect probably interest costs around $60 million in FY '27.

And our next question today comes from Niraj Shah with Goldman Sachs.

I just wanted to double-click on Ramoun's question, just thinking about first half '27, but specifically on the distribution business. How should we be thinking about seasonality there? Just trying to get a sense of the base, given the strong recovery in the second half.

Yes. So yes, great question. Look, that business will be weighted to the second half because of the way that their rebates work. So, a number of their rebates are volume based. And so, you're not sure if you're going to get them until -- right until the end of the year. And so, a lot of those rebates flow in sort of May and June. And because their earnings base is so low, they're actually a larger-than-normal percentage of their earnings at the moment. But what we are seeing in that business at the moment is really positive momentum. They had a very bad Q1 FY '26, but the business has improved materially from that Q1. And so, we are expecting a slightly better first half result out of them this year.

Got it. And just a second one. You've alluded to that sort of potential pull-forward a couple of times. Is that sort of -- I know it's sort of uncertain and hard to read, but do you think that risk is sort of broad-based? Or are there any businesses or products where you see that more likely than not?

Yes. I'd probably call it out in -- Iplex in Australia is probably one area in particular, if I was to call out any business, just because they have had significant price increases off the back of significant resin increases. But it is in a number of other pockets across the business as well, potentially.

And our next question today comes from Kieran Carling with Craigs Investment Partners.

Well done on the improved result. First question from me, you've made good progress simplifying the business over the past year or so since the Investor Day. But obviously, your ROIC is still tracking well below the WACC target. Now that you've divested Construction and shut down a range of loss-making businesses, can you just talk to some of the specific levers you're looking to pull in the year ahead to improve returns from here?

Right. So look, I mean, all our businesses have got business improvement plans if they're not performing adequately in terms of return. But we have some significant opportunities ahead of us. For example, we've got the new Taupo plant, which will become operational at the end of this calendar year, and that's got significant market opportunities ahead of it, really some very exciting ones. I think the performance improvement of PlaceMakers, we can confidently say that that's going to be a significantly improved business, and then, a whole range of other businesses where we can turn around and improve performance. So I can't -- I don't want to point to specifics but just point out that we broadly have a program in place for that.

Okay. I mean, looking at your outlook statement, I know we've covered it off largely already, but you talked to no meaningful improvement in volumes until 2027. I guess, beyond the lift in consents that we've seen more recently, is there anything that gives you confidence in the second half recovery at this stage?

Well, look, I think those consents probably represent some pent-up demand. So I think that's encouraging. I think you have to think about the -- taking the 2 markets separately. In New Zealand, the net migration numbers have been firming. They're not going through the roof, but they are firming, and that tends to be supportive for the residential housing market. And even though interest rates are uncertain, they are still stimulatory at the moment in New Zealand. So I think there's some supportive tailwinds there.

It's the headwinds that are causing us to be deferring a meaningful volume recovery until 2027. And that's obviously the situation in the Middle East, the uncertainty caused by the election coming up. And going forward, there is some uncertainty about where interest rates are going to end up. If the Middle East continues, [ this inflation will ] spiral. In Australia, it's a very state-by-state picture there. I think the population growth and historic backlog in housing is giving us a tailwind. But as headwinds, there are some significant economic issues being occurring in Victoria, for example, and the Reserve Bank, although they paused the OCR at the last meeting, it is still quite a punitive interest rate environment there.

And our next question today comes from Lee Power at JPMorgan.

I hate to labor the point, but just on the second half '26, like is there any more color you can give us on the pull-forward? Like were there limits on the prebuy or anything that at least maybe caps out what could have been pulled forward? And then, maybe just the view on what like the diesel price moves kind of meant for the second half and maybe then for the first half '27?

In both the Iplex New Zealand and Iplex Australia businesses, they did put customers on quotas. So they referred back to historic ordering patterns and limited people to that plus a percentage. So, that would have, in some ways, limited what the pull-forwards were, but we still think there was significant upstocking by merchants as well as people who have broadly got projects underway. The extent of that, we just don't know. We would expect to see that playing out in the first half of financial year '27 in a softer way.

In terms of diesel, the overall impact was certainly ameliorated by the fact that we had fuel adjustment factors in all our businesses. And what surprised us most actually was the collaborative way that people in New Zealand turned around and accepted that this was a factor outside suppliers' control, and therefore, they were actually taking on board those fuel adjustment factors. So the impact of what today is a net 55% increase in diesel overall has been very minimal.

Okay. And then, just on, I think, Will's comments about Distribution before and the seasonality, like you've obviously made a lot of changes in the overall business. Can you just give us a reminder of like where seasonality -- like what we should be thinking of seasonality in the other divisions going forward? What's a more normal view of the market?

Look, it really does depend a lot on how the subsequent quarters go. What we saw in FY '26 is, we saw it was very heavily weighted to the second half. The reason for that is, there was just a really poor Q1 in FY '26. That was driven by a number of factors, some of it economic, some of it also weather-related, and that was just a very wet start to the winter. I think, also historically, most of our seasonality outside of FY '26 has come from our Residential business and our Construction business. With Construction outside of the portfolio, that will remove some of the seasonality. However, Residential is still weighted more towards the second half, as it always has been.

And our next question today comes from Rohan Koreman-Smit with Forsyth Barr.

Maybe just going back to Kieran's point on ROIC, there's more of a focus across the group. I understand that you've got 13 out of 19 businesses improving ROIC year-on-year, and you outlined a few that are double digit. And management teams now have that as part of their incentives or a key performance indicator. Can you maybe provide some color on what you think longer-term sustainable ROICs are for the businesses? I mean, maybe also the level of invested capital that you'd need to generate these ROICs? I guess, given all the work you've done, you should have some idea. Plus, you've also talked previously, WACC a first step, and then maybe something higher is achievable. But any color on that would be appreciated.

Yes. Look, I mean, I think, we prefer to focus on getting our ROIC up to WACC, first of all, before we start talking too much about where we're taking the group after that.

Yes. I think, look, Rohan, we've probably got a long track record of dangling out ambitious targets and not hitting them. So we're trying to be pretty conservative on this one. What I can say is, it was really pleasing to see the improvement that we did in the year, albeit off pretty poor levels and still not good enough. The businesses that did go backwards, because implied in that statement is that some went backwards, by and large, it was for reasons of investments and business strategy. So for example, Laminex New Zealand was one of the businesses that went back. As we build the OSB plant, their invested capital goes up. Likewise, PlaceMakers' return on invested capital went backwards as we invested in the Frame & Truss site. And Humes is another one I'd call out, where we've expanded the distribution network, and so their lease debt has gone up. So look, it's certainly an area of laser focus for all of our business unit leaders, and we are targeting further improvement into FY '27.

And I'd just add Fletcher Insulation Australia to that list of businesses where it went back, but that was because they've invested in their new Tauranga plant, and that's just coming up to speed as we speak.

That's helpful. Just maybe a more technical point. When you look at this new disclosure that you're providing or new accounting standard you're working to, should we be looking at $414 million as the comparable, or $373 million, which is the significant items included? How should we think about your communication in terms of what earnings are going forward?

Yes. It's something that we'll probably come and talk to the market about over the next 6 months. I think, one, we don't want to do anything that's out of step with what shareholders are expecting or the analyst community. And also, I think it would be nice to get some sort of consensus across industrial stocks as well, as to what they're going to measure themselves on. As you'll know from reading the standard, operating margin, as you currently see it in our P&L, is a reasonably prominent number, but that excludes things like JV income as well. And then, what is now currently called significant items will be broken into a number of line items. So, more -- [ that will ] pull out the categories of costs. So there will be a category such as restructuring costs going forward. So I think the short answer is, we don't quite yet know, and we would like to reach some sort of consensus across the wider market. But I think that will be a bit of test and adjusting as we're one of the first to move on IFRS 18.

And our next question today comes from Phil Campbell at UBS.

Just a couple from me. I was wondering, Will, if you can give us any color -- the fourth quarter volumes, particularly Iplex New Zealand, we saw some of that pull forward. Are you seeing so far into the first quarter, any kind of reversal of that?

Yes, we are. Yes. So we have seen volumes pull back in both Iplex New Zealand and in Iplex Australia so far in this quarter.

Okay. Awesome. And then, I suppose the second one I just had was just around the election. Like if you go back and look at kind of Fletcher's trading history around elections, what do you kind of expect in terms of softer volumes kind of pre-election? I'm assuming like maybe 2 or 3 months before an election, you could see like 5% to 10% lower volumes or -- is it something like that? Or have you got any data that gives an indication of what you might see?

Yes. It's really hard to like put a data point on it specifically and put it down to one specific event. But what we are seeing is, more generally, because of the uncertainty of which the election is one of those uncertainty points is, we're seeing a lot of developments put on hold and in particular, pushing out into next year, and things like the downtown development is a really good example, but a number of those CBD developments going on hold. We're also seeing people sort of pull back on their commitment to things like new warehouse space. And so, there's a bit of an oversupply of warehousing development sites at the moment, and so seeing quite a pullback in sort of our forward order book around pouring piles for things like warehouses.

And our next question today comes from Harry Saunders at E&P.

Firstly, asking a different way to bridging '27 to '26, can you quantify the various non-macro tailwinds that you're anticipating for the full year, so including incremental cost out as inflation? If there is any turnaround of underperforming businesses, the start-up of OSB -- the new OSB plant, Construction exit, if there's any cost out benefit there, and the exit of Reinforcing and Wire? Maybe just sort of talk through those factors, please.

So if I start with the last one, all of the costs that were associated with those businesses that we've exited are sitting in the discontinued line. So you should be thinking of that continuing operations P&L as sort of a go-forward P&L, and that's why we've done that. Just -- sorry, what was your third point you made, Harry?

I was just -- so the other factors were cost out, negative inflation, turnaround of businesses, if there's any sort of broader benefit yielded there, and start-up of the new OSB plant?

Yes. So in terms of the new OSB plant, we don't expect any impact from that -- positive impact from that in this financial year. I think sort of any positive impact will be offset by the cost of setting up a new plant. So that's kind of a net zero in this financial year. And then, in terms of cost out, we're -- and business improvement, we're on a constant performance improvement program across all of our businesses. And we've said we want to make an acceptable return in all markets, and we're a long way away from that. And so, we think there's still a lot of self-help initiatives that we can do across the portfolio, be that cost out, be that the manufacturing excellence program that Andrew has spoken about, or be that just really simple things like restarting exports in some of our businesses so that we can get overhead recoveries on those export sales.

Just also a follow-up on the macro potential pickup in calendar '27. Just wondering if you could give a sense if you think that, that could be a benefit in the second half of FY '27 or you think sort of later in the calendar year? And I'll sneak one just on tax rate expectations for the year.

Yes. Look, I mean, that's a difficult one to answer because obviously, we're saying that there's a high degree of uncertainty as we come through to calendar year '27. But assuming -- and this is a base assumption, but assuming that the factors that we know of at the moment don't get any worse and we have resolution of the elections, one could reasonably expect the second half of financial year '27 to start to benefit from some of those tailwinds we've spoken about.

And our next question today comes from Grant Swanepoel with Jarden.

First question is around the strategic review on Residential and Development. Is there a capital gain still sitting in that book value assessment that sits in your $811 million of invested capital? And how many units are you holding for sale in the housing division?

Sorry, what do you mean by capital gains, Grant? Do you mean on like theoretical market value of the land bank?

I assume you mark to market the land bank. And is there a gain sitting in that at the moment?

No, the land bank is held at historical cost because it sits in stock. [indiscernible]

I know it's held at historical cost. But in the past, Fletcher Building used to give us what their assessed capital gain was sitting in the book value. Are you guys no longer willing to do that?

No, I think because we're going through a process, that probably wouldn't be wise. We'll probably keep those sort of numbers to ourselves at the moment.

Okay. And the number of units that you've sitting on your books at balance end that's held for sale?

Off the top of my head, I think it's about $120 million, Grant, but I'll have to get back to you on that.

And my second question is just on Iplex Australia, the Western Australia saga. $10 million of legal costs, is that going to be an ongoing number until this court case is over? Or is that just one hump we're seeing at the moment? And how is the court case going?

Well, there are several court cases underway there. The level of legal costs -- it sounds a bit facile, I apologize for it -- but it will be what it will be because we're responding to other people's positions. At the moment, we believe that the provision we've got for Western Australian is adequately provided for. All the modeling we're doing around the leak rates and so on that we're suffering are within the bounds of what was originally used to create the provision. At the moment, we have 58 builders in the industry response, but Buckeridge have not yet joined that. And the legal costs that we're suffering are mainly in response to Buckeridge and Buckeridge not having joined that industry response.

And our next question comes from Keith Chau at MST Marquee.

First question is a follow-up on the Distribution business. I know we're all trying to work out what the momentum in that business is with respect to the improvement in earnings power. But maybe, Andrew, if you can help us understand in broad buckets, how much of the improvement in the second half for Distribution was related to Cavendish Drive and how much of that...

Sorry, I was going to say, Cavendish Drive, it wasn't completed until June. So you won't have seen any Cavendish Drive improvement in financial year '26, but we should see it starting to flow through as from now.

Okay. And what would the quantum of that benefit be at EBIT roughly?

I'm not really sure I want to start getting into that degree of specifics at the moment.

Okay. And Will, just another follow-up on the interest piece. I think you spoke to a $60 million number before. Is that a gross or net interest number? And what are leases likely to end up to be? The reason I ask is, there's quite a variation in expectations for your overall net financing cost line. And given where the net debt balances come to and changes in the portfolio, there could be -- continue to be significant variation. So if you can help us there, that would be appreciated.

Yes. No, it's a good point, Keith. So that's sort of -- that $60 million is just the interest costs on the debt. It doesn't include lease interest costs, which are approximately another $65 million to $70 million. And it will obviously be subject to any further meaningful reduction in debt as well. It's sort of a [ ceteris paribus ] situation.

Sorry about that. That does conclude our question-and-answer session. I'd like to turn the conference back over to Mr. Reding for closing remarks.

I'd just like to thank you all very much indeed for coming along today, and I look forward to meeting with many of you as we do our road show. So have a great day. Thank you.

Thank you, sir. That does conclude our conference for today. Thank you for participating. You may now disconnect your lines.

Thank you for standing by, and welcome to the Fletcher Building Fiscal Year '26 Half Year Results Briefing. [Operator Instructions]. I would now like to hand the conference over to Mr. Andrew Reding, Managing Director and Group Chief Executive Officer. Please go ahead.

Good morning, everyone, and thank you for joining us for Fletcher Building's half year results for the 6 months ended 31st of December 2025. Turning to the agenda on Slide 3. I will begin with an overview of the first half of financial year '26 and the key themes for the half and then step through our operating performance across the divisions.

Will Wright, our CFO, will follow with a detailed review of the financial results, and I will then return to discuss our outlook for the remainder of the year.

Turning to Slide 5. Overall, conditions remain tough, particularly in New Zealand. And whilst we have some earlier operation -- early operational and efficiency improvements from the implementation of our strategic plan, we still have a long way to go. There are 5 key messages from the half. Firstly, our performance was mixed across the period with quarter 2 volume improvements unable to fully offset quarter 1 weakness.

Secondly, our core businesses demonstrated resilience despite subdued markets. Thirdly, we continue to exhibit disciplined capital allocation. Fourthly, further cost-out initiatives were implemented, and these will increasingly benefit the second half. And finally, we made significant progress on portfolio simplification, including the divestment of Construction. Slide 6 shows the tangible progress we continue to make on our turnaround plan.

Starting on the left-hand side, over recent months, some of the key initiatives we've executed on are the Australian and Steel divisional restructure, the first phase of corporate restructuring, reduced forward capital commitments and implementation of the decentralization restructure. In the middle column, our short-term focus continues to be on key strategic priorities that simplify our business and ensure that we have a more robust balance sheet going forward.

We'll now focus on 3 key strategic priorities, in particular, completing the construction divestment, completing the sale of Felix Street and progressing the residential and development strategic review.

Finally, over the medium term, we are going to continue to embed the new operating model, simplify the portfolio further and reset the dividend policy once we move into the lower half of our net debt target range. Turning to the Construction divestment on Slide 7. You'll already be familiar with the terms of the deal announced last month. This is a major step in simplifying our portfolio and strengthening our capital structure. The headline sale price is $315.6 million, and there is a potential increase subject to contract outcomes of up to $18.5 million.

After adjustments and transaction costs, we expect net proceeds of around $300 million to $315 million, and all of this will be applied to debt reduction. Regulatory approvals are underway, and our current best estimate of completion is during the first quarter financial year '27. VINCI knows Fletcher Construction well and has a deep commitment to New Zealand and the country's infrastructure pipeline. That makes VINCI an excellent long-term owner for the business and its people, customers and partners.

On Slide 8, we have a brief overview of the group financials for the half. Overall, you will notice our performance was broadly consistent year-on-year. This is a creditable performance given the continuing weakness in the New Zealand and Australian building sector, particularly during the first quarter. Revenue was broadly in line with the prior period at $2.9 billion, down just 0.5%. Continuing operations EBIT was $145 million, nearly flat year-on-year. On a like-for-like basis, including discontinued operations, it was $151 million compared to $167 million in the first half financial year '25. Net profit from continuing operations was positive at $45 million, and this is the first positive result since June 2023.

These results are supported by cost-out initiatives and market share gains in key businesses. Net debt increased to $1.16 billion. This is below our internal expectations and reflects disciplined working capital management and capital allocation decisions, partially offsetting historical residential land purchase commitments of $151 million. Cash flows from operating activities improved materially to $156 million compared to $87 million in the prior period. Overall, the core businesses delivered stable performance despite challenging trading conditions in the first quarter.

Moving to Slide 9. Despite the market environment, operational execution across the group remains strong. Firth opened its new flagship batching plant in Auckland. Golden Bay delivered a resilient result and lifted coal substitution. Humes added 3 new branches, enabling a market share growth initiative and Winston Aggregates advanced recycling initiatives and established a quarry joint venture. Winston Wallboards successfully trialed up to 10% recycled content in plasterboard production, and Laminex Australia delivered $14 million of cost out whilst Fletcher Insulation commissioned its new acoustic panel plant.

These actions help demonstrate the underlying operational momentum we're building. I'll now turn to operating performance. Over the next few slides, I'll step through divisional performance and the demand backdrop across New Zealand and Australia. Slide 11 provides a snapshot of performance across the 5 divisions. Overall, a mixed bag. Light Building Products grew EBIT despite the environment. Heavy Building Materials experienced some margin pressure, reflecting softer volumes and cost inflation. Distribution remained challenged with further margin weakness. However, we have seen early signs of stabilization nearing the calendar year-end, and we continue to monitor that closely.

Residential and development volumes were materially lower, owing to phasing of key developments, while product mix changes due to bulk section sales also impacted on earnings performance. Construction now discontinued, experienced reduced activity as key projects completed and pipeline phasing moved out. On Slide 12, we can see that New Zealand demand has remained subdued, especially in the first quarter. Wallboard volumes were broadly flat, and we're seeing very gradual improvement in daily sales. Aggregates volumes were down more than 13%, owing to weak roading activity and further major project delays. Golden Bay volumes were flat year-on-year, but up 4% versus the second half of financial year '25. PlaceMakers frame and truss volumes continued to recover with a strong December.

However, intense competition again means margins are challenging. Humes was materially impacted by civil and subdivision markets, which have remained extremely weak over the last 2 years. In general, competitive intensity remains high across many categories, keeping margins under pressure. In comparison, Slide 13 shows how Australian volumes were more positive. Laminex Australia achieved 6.6% growth, supported by increased activity in residential renovation and competitor supply constraints. Fletcher Insulation volumes improved owing to the shift towards higher density products under updated building codes and Iplex Australia volumes varied by segment, being strong in Electrical and Plumbing, but softer in Civil. Stramit volumes were below the prior corresponding period on a 12-month rolling basis, but when compared on a 6-month basis, have started to show improvement.

Overall, we're seeing a more balanced environment than New Zealand. Also, our ongoing cost-out efforts have positioned the Australian businesses well for operating leverage as volumes recover. Turning to Slide 14. Residential and development volumes were 27% lower than the prior corresponding period with 223 units taken to profit. You'll see in the chart at the right, this was the second lowest half since financial year 2020. Bulk land sales formed a higher proportion of the mix, so margins were lower and thus it's difficult to compare to prior years. Weekly net sign-ups averaged around 10 per week compared to 16 last year, reflecting cautious buyer behavior. I will now ask Will to address the financial results in detail.

Thank you, Andrew, and good morning, everyone. At a high level, this is a result that clearly reflects a challenging operating environment, particularly during the first quarter. While volumes across a number of end markets remain subdued, particularly in residential and distribution, we are seeing meaningful progress on cost reduction, cash generation and transitioning to a more resilient balance sheet. Moving to Slide 16, the income statement. Revenue for the half was $2.9 billion, broadly flat year-on-year. However, the headline number masks some quite different underlying trends. On the positive side, we saw volume and share gains in businesses exposed to renovation-driven demand, such as Winstone Wallboards and Laminex.

These gains were offset by lower residential settlements, weak infrastructure demand and compressed margins in our distribution businesses. Warehouse and distribution and SG&A expenses have seen an annualized decrease in structural costs of $63 million with approximately $31 million of benefit in the first half. Like-for-like EBIT, including discontinued operations was $151 million in the half compared to $167 million in the prior corresponding period due primarily to lower construction earnings. EBIT from continuing operations was $145 million, down just $2 million year-on-year. This is despite significant volume headwinds and reflects disciplined cost management.

Turning now to discontinued operations, which relates primarily to the Construction division. For the half, discontinued operations recorded revenue of $519 million and a net loss after tax of $56 million. EBIT was modestly positive at $6 million, but this was more than offset by $81 million of significant items made up of additional provisions for legacy vertical projects, closure and wind-down costs in the South Pacific operations and legal costs associated with legacy construction claims. The transaction materially simplifies the group, reduces risks and improves the quality and predictability of earnings and cash flows going forward. Any cash flow and cost-out benefits from the divestment are expected to be realized from FY '27 onwards.

Slide 18 illustrates the key drivers of year-on-year movement in EBIT. The most significant headwinds were lower volumes, particularly in residential and development and distribution as well as in infrastructure-exposed businesses, alongside ongoing cost inflation in areas such as energy, labor and leases. These impacts were largely offset by a combination of cost-out initiatives, market share gains in core products and improved operating discipline across the group. Cost out has been broad-based, spanning manufacturing efficiencies, procurement, overhead reduction and simplification of organizational structures.

We have more work to do on underperforming businesses with 8 business units losing money in the first half with a total negative EBIT contribution of $12.9 million.

Turning to the balance sheet. Invested capital is $5.9 billion, down from $6.3 billion at December '24, reflecting portfolio simplification, asset impairments taken in prior periods and disciplined capital deployment. Working capital is well controlled with inventory and debtors both lower than the prior year, reflecting a more balanced and less volatile approach to managing trading cash flow. Residential and development invested capital increased during the half, driven primarily by $151 million of land purchases. We expect a further $65 million of purchases in the second half with additional commitments of $100 million in FY '27 and circa $35 million in FY '28.

Overall, the balance sheet is in a stronger position than 12 months ago, and we remain focused on further simplification, lease reduction and disciplined capital allocation. Turning to Slide 20. Net cash flow from operating activities was $156 million, up from $87 million in the prior period despite a challenging trading environment and significant residential working capital investment as a result of land purchase commitments made several years ago.

This reflects strong EBITDA conversion, disciplined capital management of working capital and legacy construction cash inflows. Investing cash outflows primarily relate to growth projects, which have been in flight for a number of periods, including Taupo OSB plant, new frame and truss capacity and the Auckland first batching plant. Moving to Slide 21. Central costs reduced materially year-on-year, reflecting the actions taken to simplify the organization and decentralized decision-making. Group technology costs reduced following the restructuring and rationalization of digital projects. Corporate overhead costs also reduced, reflecting a smaller head office, lower insurance costs and lower short-term incentive accruals aligned to first half performance.

As the portfolio continues to simplify, particularly following the construction divestment, we expect further opportunities to rightsize central functions. Turning to Slide 23. Working capital volatility has been a key focus area for the group. Over the past 2 years, volatility in trading cash flows has required the group to maintain elevated levels of debt headroom. As you can see on the chart, in the chart on the left, whilst we have more work to do, the actions taken to improve discipline are now delivering more stable outcomes with movements returning closer to long-run averages. As you can see on the chart right, portfolio simplification, including the exit of construction and potential changes in the residential division are expected to materially reduce working capital volatility over time. This will support a more efficient capital structure and reduce reliance on excess liquidity buffers.

Capital allocation remains tightly controlled with a focus on improving ROIC. CapEx and investments totaled $161 million in the half, broadly flat year-on-year. As you can see in the chart, spend was prioritized towards in-flight projects, including continued investment in Taupo -- in the Taupo OSB plant, frame and truss capacity and concrete manufacturing assets. The divestment of construction will result in a meaningful reduction in future CapEx requirements, particularly around asphalt plant renewals previously planned for FY '27 and FY '28. Excluding OSB, stay-in business and growth CapEx was down $17 million versus the prior corresponding period.

We remain committed to disciplined capital deployment and expect overall CapEx to moderate as the portfolio simplifies. We now expect full year CapEx to be approximately $290 million to $310 million, down from the previous guidance of $320 million to $340 million. Moving to Slide 24. Lease management is an important lever in improving ROIC and balance sheet resilience. Continuing operations lease liabilities reduced by $172 million, driven by a reassessment of our lease renewal assumptions and site exits. Construction divestment is expected to reduce lease liabilities by a further $76 million, materially lowering group exposure.

The inclusion of right-of-use assets into ROIC calculations has helped to ensure lease impacts are fully reflected in performance assessment. Turning to funding and liquidity. The group continues to make progress in transitioning to a simpler, lower cost, more resilient cap structure. The USPP debt was fully repaid and canceled during the period with associated break and make-whole costs recognized in funding expenses. The decision to exit the USPP market simplifies the funding mix and covenant package and lowers the effective interest rate. We also established a new $200 million 2-year liquidity facility and extended our $325 million tranche of the syndicated facility to FY '30.

At period end, we had $750 million of undrawn facilities, providing good liquidity headroom for our business. Average debt maturity is 2.3 years. And whilst FY '28 maturities are elevated, this is a reflection of the transition of our capital structure, and we are already working on refinancing options. Pleasingly, Moody's reaffirmed our rating, and we remain committed to maintaining investment-grade credit metrics. Finally, net debt on Slide 26. Net debt increased to $1.16 billion compared to $999 million at June '25. The primary driver of the increase was residential working capital investment, particularly the $151 million of land purchases during the half. Importantly, excluding construction proceeds, we expect full year FY '26 net debt to be broadly flat compared to FY '25, reflecting stronger -- expected stronger operating cash flows in the second half.

Net debt reduction remains a clear priority and underpins our longer-term objective of returning to a more resilient capital structure. I will now hand back to Andrew to conclude on broader outlook.

Thank you, Will. I'll now turn to the outlook on Slide 28. In New Zealand, we think volumes will remain soft and meaningful improvement is not expected until calendar 2027. In Australia, early volume trends in Laminex and [ Setra ] insulation are encouraging, although conditions remain mixed. Margin compression will persist, but our cost-out program will help offset these pressures. As well as the recently announced sale of Felix Street, we also have other sale processes underway for industrial sites that have the potential to generate EBIT.

If achieved, this should offset some of the weakness in residential and development and allow for some further modest improvements to the balance sheet. Portfolio simplification remains on track with the construction divestment currently estimated to complete in the first quarter FY '27, while the residential and development strategic review is ongoing. Please note, we won't be making any comments about the strategic review today in order to preserve the confidentiality of the process. Concurrently to this portfolio simplification, our capital structure simplification has also continued at pace. Overall, we are confident that the changes currently taking place will make Fletcher Building more simple, more resilient and more profitable throughout the economic cycle. With that, we will close the formal presentation and take your questions.

[Operator Instructions]. Our first question comes from Kieran Carling with Craigs Investment Partners.

Just thinking about the balance of the year, you've obviously been fairly clear with your messaging around subdued market activity and margin compression, but you've called out some benefit -- some further benefits to come with cost out in the second half. From what I can tell, consensus EBIT stripping out construction, is it about $350 million for the year, which implies a 10% growth rate in the second half. Do you think cost out will be enough to get you there? And can you maybe just touch on what benefit you expect from further land sales and how that will play into the resi division?

So I'll take the second part first. Look, we have a number of opportunities to maximize the -- or optimize our footprint, both here and in Australia. But we don't have much control over the timing of those and neither do we want to turn around and start putting information into the marketplace that might impact on our ability to negotiate. So we're not going to be saying a lot of those going forward.

In terms of cost out, we have, as you know, talked about cost out for quite a long period of time now. When we did the cap raise, we talked about having an annualized total of $200 million of cost out. And of that, we think structurally, there was about $17 million, and we'd expect about $8.5 million of that to come through in the first half of FY '26. In May '25, we talked about a further GBP 15 million out, which is all structural and there's probably about GBP 7.5 million of that comes through in the first half of '26. And on the Investor Day, we announced another GBP 30 million of structural out, which again would probably equate to about GBP 15 million out in the first half. So in the first half, we've got GBP 45 million of cost out, GBP 31 million of which is structural. We've also announced at the ASM that we were looking at a further GBP 100 million cost out with a run rate of around about GBP 50 million. So I think reasonably, we can expect some of that to come through.

But my hesitation on saying it's exactly going to be GBP 50 million is that we are seeing changes in market conditions. And obviously, we will turn around and move or change the nature of our cost out according to what we see in terms of the market activity. And the best example here, I think, is one, for example, like ready-mix concrete where we would be cutting our nose off to spice our face if we were making ready-mix concrete truck drivers redundant when we're actually seeing a lift in some of the volumes there. So it's slightly indetermined exactly how much we'll be taking up in the second half.

The next question comes from Ramoun Lazar with Jefferies. It appears that Ramoun has dropped off the line. The next question is from Rohan Koreman-Smit with Forsyth Barr.

Just on the volumes, it looks like you've done a pretty good job taking market share to offset the cycle, and there's been a bit of a I guess, strategic direction that you've taken. You're talking to some signs of volume improvement in the underlying market now. When do you switch from market share focus to margin focus?

It's a very good question. And I think the trouble is it's very dependent on which business you're talking about. I mean there will be a point in time where if you're using margin to drive market share, you'd want to swap to a higher margin rather than. So it's very business unit dependent.

Do you think you're at the point when you'll soon be switching some business units to more of a margin focus than a market share focus given that you do have some signs of underlying activity picking up?

The answer is yes. But again, it's so much dependent on which business unit. If you take Golden Bay Cement, for example, if we see increases in volumes in cement demand across the market, I would expect to see selling prices rise. In aggregates, if aggregates started to pick up to where our expectations were, one would expect to see average selling price rising. So it is very much dependent on which activity you're talking about.

The next question comes from the line of Brook Campbell-Crawford with Barrenjoey.

Just keen to hear your views around the distribution business. Obviously, had a pretty tough period. But if you look at a couple of years to mid-cycle, how do you think the earnings power of that business now should look like given your position and sort of what's happening across the various players? I guess what I'm trying to understand is sort of EBITDA averaged about EUR 100 million over the last decade. Do you think get back to those sorts of levels? Or has the market changed such that we should think about perhaps a lower level of earnings?

Yes. Look, I'm not really going to comment on what we think those earnings might be in the mid-cycle. What I will comment on is the fact that we've carried out a very deliberate turnaround strategy at our distribution division. So we know that if you get your frame and trust volumes that the value of the balance of house is somewhere in the order of $4 to $1, depending on the precise projects you're looking at. And we know that there is stickiness. So if you've done the frame and trust, you will tend to end up with the balance of house. So we've carried out a very deliberate strategy of being competitive on frame and trust, which is why there's been some margin pressure there.

But we would expect as the balance of house comes through for the mix to margin that's being demonstrated to rise. And that's also been a focus on increasing its market share. So look, we think we have a very strong distribution business, and we think the actions that we've taken will start to come through in the not-too-distant future.

The next question comes from Lee Power with JPMorgan.

Andrew and Will. Andrew, just following on from Rohan's question. Like if I look at your Frame and Truss comments, I guess that the backdrop is not amazing, but improving volumes in December estimation, volumes got positive momentum. You talked about positivity in concrete. Like your share comments notwithstanding, like how much do you think of what you're seeing is share versus early stages of a market recovery? Because I would have thought some of these things would be a decent indicator for resi generally.

Look, because we have such a broad spread of activities here, it's very difficult to turn around and give you a blanket answer across all. So we do know, for example, we've seen residential consent start to pick up towards the end of last year. But we also know that when you get a consent come up, it's 9 months to a year before you see the slab being put down and there being meaningful activity from it. We have seen a bit of an increase in some of the commercial inquiries coming out, and we do have a forward workload of commercial concrete, which is slightly ahead of where we were last year. But each of these activities, you have to look up very much on their own merits. So it is very difficult to turn around and give you a single answer that covers everything.

And then just a follow-up.

I was just going to say, quite pleasingly, in most businesses, we have stopped losing market share, which is really positive. And it is starting to lift in a number of areas. And so when you do see lifting volumes, it tends to be improving market share rather than a broad-based recovery.

And then just a follow-up. You were talking about the -- I think it was $151 million just around continuing to purchase land and development business. Is there any way or ability to change? I guess there's options around that land, but is there any ability that you have to change or flex that spend profile given obviously the business settlements as we see now are not obviously looking amazing.

No, unfortunately not. These are commitments that were signed up to, in some cases, many years ago. And that $151 million is after we have pulled all levers and flex what we can. And so just to sort of reiterate, there's a further $65 million in the second half of this year as well, as well as about $100 million in '27 and $35 million in '28. What we can do about these forward commitments all forms part of the strategic review and process that we're going through on the residential business at the moment.

The next question comes from the line of Grant Swanepoel with Jarden.

On house sales, have you seen a trend pick up? I know you've got some presales on the 10 per week that you were saying to us to try and get some sort of model done for the second half of the year. And then on your ROIC, have any businesses start to line up as not achieving those ROICs you said you would adhere to, to keep businesses or get rid of them?

So I think what you were asking about was residential volumes grow?

Yes, please.

Yes. So -- we are not seeing buoyant residential volumes at the moment. We think that that's partly due to probably some developments which aren't in the optimum places to be like our South Auckland operations. And we may not be putting the right typology in there. So this is probably limited to the number of units that we're selling at the moment, but that is under review, obviously. I think your second question was on ROIC. I didn't quite catch all of it. Will did --.

So Grant, look, as I said in my speaking notes, I don't know if you picked up on it, 8 businesses lost money in the first half. And so that's a good place to start in terms of businesses that we're not happy with the ROIC that they're generating at the moment, and they are certainly under review.

And we want to see a clear path to those businesses returning to achieving ROIC. And where businesses can achieve ROIC, I think we've been pretty decisive as you saw with like the closure of the panelization plant, for example, the closure of Laminex MADE. And so we're certainly being pretty disciplined about that ROIC target for businesses.

But obviously, when we have identified the businesses that are underperforming, what you need to do then is to work out what the improvement plan that you could apply to it would result in and then turn around and strategically decide whether that end result is something that is adequate or not.

The next question comes from Stephen Hudson with Macquarie Securities.

I know you no longer report on this basis, but I just wondered if you can talk through your Aussie dollar sales and EBIT PCP and why they moved as they did in the half?

Yes. We do still report on that basis, Stephen, in segment reporting. So I just refer you to the annual report on Page 17 has our Aussie -- our geographical segments. So EBIT from our Australian businesses before significant items was $53 million.

That -- it was obviously down quite a way and sales were down quite a way. I just wondered if you can comment on what's going on there, which businesses were moving.

Well, obviously, I'm not sure what numbers you're looking at for your comparator. But obviously, Tradelink has come out of the Australian business, which was a significant portion of revenue. I think Andrew gave some good color around what we're seeing in terms of the wider market in Australia. So Australia is obviously a more resilient economy. It's much larger and demand is more broad-based, although we do see state-by-state markets.

And so I think broadly consistent with what everyone else is seeing. We're seeing a reasonably strong market in Queensland and in Western Australia and a slightly more subdued market in New South Wales and Victoria. But what I would say is probably Victoria has surprised us a little bit to the upside, and that's probably more to do with our customer segments rather than the wider market. So we're well positioned with a number of the large volume homebuilders in Victoria. They've recently had ownership changes and those new owners are really swinging into care in terms of ramping up development. So that's been positive for our Victorian business.

And then there's been an increase in the A&A market of the alteration amendments market, which we managed to tap into very effectively through Laminex.

The next question comes from the line of Sam Seow Citi.

Just wanted to lean into that market share question a little bit further. I think on Page 18, you're flagging $15 million in EBIT offsetting market declines. Given that's an EBIT slide, maybe give us some more color about where specifically you're seeing that profitable share growth or maybe how that number is made up or [indiscernible] ?

Just looking through the presentation, [indiscernible] Slide you're referring to.

Yes, absolutely. It's predominantly, the share gains have been in the light building products and in the heavy Building Materials segment. So I think what we're seeing is we are a domestic manufacturer coming up against imported product. We're seeing significant benefit to domestic manufacturing at the moment and seeing share gains in those businesses. And also in product categories where there's a competitor that is struggling financially as well, we're seeing significant share gains.

So I think if we're talking in our heavy building materials distribution -- heavy building materials division, Firth in particular, has seen very good market share gains. And in our Light Building Materials segment, we're seeing good share gains across Winstone Wallboards, Laminex in Australia and New Zealand and Iplex [indiscernible] picked up market share quite significantly as well.

Okay. That's really good and really helpful. And maybe just on distribution. You've called out some competitive pressures. But actually, revenue and gross margin look okay and looks to be more of an overhead inflation issue. Just wondering if there's something there you can kind of change in the second half to get that business profitable again.

There's a couple of aspects to that. Firstly, PlaceMakers have very high lease liabilities. So we've obviously suffered CPI increases on those leases, which we need to understand better as we go forward as to whether we can change that. But the other side of it was I think I've made reference earlier on to there being a deliberate strategy to turn around and capture the frame and trust side of things. What we've done now, I think everybody is aware, we've got the Cavendish Drive Frame and Truss plant, which should be operational come May. But what we've been doing is taking on board significant extra resource around the manufacturing of our Frame and Truss so that we can make sure we can make it as competitively as possible. So that's where a lot of the increase in cost has been.

The next question comes from the line of Harry Saunders with E&P.

Firstly, I know we talked about the second half already. Wondering if we could just think about the bridge from the first half to the second, any benefits or headwinds you anticipate sequentially versus the EBIT you reported, including, I guess, the $11 million gain on the sale of Felix Street or any other likely property sales and what you think the incremental net cost out could be and what seasonality benefit we could see, please?

Yes, that's a very broad question. Look, what we're trying to do is trying to be as open and transparent with the market in terms of what we see today as to how our individual businesses are performing. So look, we'll continue to provide quarterly volume updates that will give you an insight as to how the individual businesses are tracking into the second half. There is generally a second half weighting, but that has historically actually been driven by -- more by our residential and construction businesses and less so by our core light building products and heavy building materials.

The other thing to bear in mind is the cost-out benefit moving into the second half. So we estimate up to $50 million of cost out from the $100 million will benefit will flow into the second half. But as Andrew said, we're just having a bit of a watch on that. What we don't want to do is take cost out and then have to put it in a few weeks later because demand has picked up. And so we're just constantly monitoring where that sort of tipping point in forward orders is that we want to hold on to that cost.

In terms of site sales, we'll continually keep the market informed, just like we did when Felix Street was announced last week. And so if any more happen to fall in the second half, we'll certainly keep the market informed.

Also just wondering if you could give a sense of any mid-cycle margin targets you have across the new operating divisions given we've got a new reporting structure, please?

Yes. Look, we're trying to stay away from this sort of mid-cycle target piece. Fletcher has probably got a pretty long track record of holding out EBIT margin targets and not hitting them or being creative in the way in which they've hit them. So we're firmly focused on ROIC. And our first step on the ROIC journey is to make WACC because on our estimation, it's been a very long time since Fletcher Building has made WACC.

The next question comes from the line of Ramoun Lazar with Jefferies.

Just one on -- if you can comment on the roading market and those project delays. Have you seen any sort of indication of a pickup or change in the market environment there into the second half?

Yes. So what we think happened in the first half was in New Zealand, they have what they call the IDCs and the -- all the roading contracts are under an IDC and they turned down and retendered all of New Zealand all at the same time. And we think that whilst the evaluation of those IDC tenders was underway, they choked back on previous road maintenance work.

So we saw a significant drop off in our aggregates volumes up to Christmas, and that was 13-odd percent. There have been some indications that the aggregates is picking up as we come into the new year. And certainly, those IDCs are expected to be awarded in the very near future, but it seems to be a bit of a moving piece because they want to turn around and do a grand review and name them all at the same time. But certainly, we'd expect in the next few weeks that the IDCs will be announced and that will actually then lead to the roading activity continuing.

I would say, and as much as we don't like to mention the weather, February has been a particularly unhelpfully wet month. And so we would expect when the drier weather comes that we see a bit of an uplift in roading maintenance activity.

Okay. Great. And just one for Will. Thanks for the color around CapEx and how to think about debt into the back end of the year. What -- any sort of changes in the sort of provision cash expense into the second half? And perhaps if you can give us some guide into '27. And maybe if you can include sort of an idea of CapEx into '27 as well, help us just to frame up the cash and the balance sheet.

Yes. There's no sort of acceleration of legacy cash flows into the second half. So the sorts of things we're talking about are a little bit difficult to forecast. But it will continue at a similar run rate as to what we saw in the first half. In terms of CapEx moving into '27, it's probably a little bit too early for us to issue any sort of guidance.

But what I'd say is like we're firmly focused on lowering the forecast CapEx number across the go-forward period across multiple years. And so what we were trying to indicate in that chart in the results presentation is if you actually take out the OSV CapEx that we've actually had a half of pretty low levels of CapEx across the remainder of the business. And actually, within the $18 million of growth CapEx, there's a number of projects that were committed to many years ago as well. And so going forward, we do expect a lower level of overall CapEx.

The next question comes from the line of Keith Chau with MST Marquee.

First question, actually a follow-up on Lee's question earlier about residential investment. So maybe another way for us to ask a question is, as you sell through the residential units, albeit the numbers are lower at the moment, with the release of inventory and working capital from unit sales be enough to offset the costs associated with the pre-committed land purchases such that capital employed declines? Or is the way to think about capital employed in that business still that it is rising from here on a net basis?

No. So you're correct that we will look to release capital employed from that business as we work through the developments. And so it is a little bit hard to forecast in terms of the second half given the uncertain nature of the residential property market at the moment, but we would hope to see an unwind in that funds employed in the second half of this year.

Okay. And then the follow-up to that is outside of residential units, just the potential EBIT from land sales and perhaps, Will, if you can comment on the payables balance as well. It just seemed a bit high to us and it looked like it was high relative -- sorry, it was a bit low relative to our expectations and low relative to consensus as well. So just trying to understand where that payables balance should go in the periods ahead, if possible.

Yes, sure. Sorry, what was the first part to that question? Payables, second part...

First one was land sales.

Land sales. So I think we're obviously working through as part of the residential strategic review, also looking at our whole wider property portfolio. So we have a number of processes going on at the moment. The level of earnings from those is uncertain as is the timing of those. So sort of the best we can do is kind of keep the market informed at regular intervals as we go through the year if and when any of those happen to look like they're going to fall in the second half.

In terms of payables, what we're really trying to do is move -- and I think Slide 22 sort of demonstrates this is just to a more consistent working capital cycle. And so when you look at historical comparators, there is a lot of noise in those comparators. And so what we're trying to do is move to a more normal cycle where it's a lot smoother throughout the year. So I think this is probably -- December was really probably the first period end where we haven't seen sort of movement in payment timings to try and improve the working capital number.

The next question comes from Daniel Kang with CLSA.

Just with all the announced divestments and you're flagging for more to come, your net debt should comfortably fall back to the target range of $400 million to $900 million. Just wondering how the Board would be thinking with regards to reinstatement of dividends or capital returns?

Well, I mean, that absolutely is up to the Board to decide. What we've already said is that we will consider dividend policy once we get to the lower end of that $400 million to $900 million range. So let's wait for the event to happen.

I'll just probably add to that. Look, free cash flows in the first half wouldn't support any sort of dividend either. So we can't get ahead of ourselves. We've still got a lot of work to do. And what we won't be doing is paying a dividend out of debt going forward.

Yes, makes sense. And just with regards to WA pipes, I know there's a slide there, and good to see that there's no change to provisions. Can you just provide any color on how the whole process is progressing? Any potential for resolution with BGC?

So we think it's progressing well in the sense that we've got over 50 builders now signed up into the industry response. As you know, what we're trying to do is to limit the overall exposure caused by any like peak -- pipe leaks. So we now have -- I think it's 4,188 leak detection units installed. And they are quite a clever little artificial intelligence valves that will turn around and track how your normal pressures flow in the house.

And if anything happens outside that normal, it just cuts off the water to the property, so it prevents any of the damage happening. The reason that's important is because although we've made little progress with BGC in coming in to join the industry response, they are cooperating wholeheartedly on getting LDUs installed into all the houses that they built. So what they are recognizing is that even though they don't -- they haven't yet wish to participate in the IR, they are trying to participate in that mitigation of damage that might be caused by pipes.

And then furthermore, we've carried out, I think it's 1,176 ceiling pipe replacement. And one of the interesting consequences we're seeing of that is that once we've replaced the ceiling pipes, it actually removes pressure from the rest of the system. So as we do a ceiling pipe replacement, it looks as though a full house replacement number is dropping. So all in all, we've got a very good process in place in Western Australia. It's fully staffed. We're in control of understanding the costs and being able to turn around and kick off when people apply for a replacement. And I think all the modeling we're doing at the moment says that the original provision is still comfortably enveloping what we're seeing in practice.

There are no further questions at this time. I'll now hand back to Mr. Reding for closing remarks.

All I'd like to say is thank you all very much indeed for coming along today and listening to us, and we look forward to probably touching base with most of you personally over the next couple of weeks. Thank you very much indeed.

That does conclude our conference for today. Thank you for participating. You may now disconnect.

[Foreign Language] and good morning, everyone. On behalf of the Board, it is my pleasure to welcome you to the Fletcher Building's 2025 Annual Shareholders Meeting.

Today's meeting is being held both in person and online via the Computershare online meeting platform. We therefore, welcome our shareholders, proxies and guests both those here in the room at Eden Park and those joining us online.

Before we start the formal business of the meeting, I would like to address some housekeeping matters. First, can I ask people in the room to ensure their mobile phones are switched to silent? Secondly, in the unlikely event of an emergency, please leave the building by the nearest exit, which is over there.

Please look for Eden Park staff -- members who will direct you safely from the building and to the nearest fire assembly point and that fire assembly points are located on Reimers Avenue, which is over there.

Taking us back to the meeting. As a quorum is present and due notice of the meeting has been given, the meeting is duly constituted, and I declare it open.

I will now introduce my fellow Directors. On my right, which is your left, we have James Miller and Sandra Dodds. And on my left, we have our Group CEO and Managing Director, Andrew Reding; Jacqui Coombes, Tony Dragicevich; and Cathy Quinn; and Company Secretary, Haydn Wong, who's my right-hand man today, is seated to my immediate right. We also have in attendance members of our leadership team and our auditors, EY.

Moving on to the agenda for today's meeting, there is a lot to get through. I'll begin with the financial -- a summary of our financial year 2025 performance and medium-term strategy before handing over to Andrew Reding, our Chief Executive Officer. Andrew will speak to the operating performance, our stakeholders and the turnaround plan for Fletcher Building. You will then have the opportunity to ask Andrew and I questions regarding our presentations.

And after that, we will move on to the resolutions of the meeting as set out in the Notice of Meeting. The resolutions will be decided by poll. Questions specific to the resolution will be dealt with before the resolution is voted on.

At the conclusion of the formal business, there will be another opportunity for further general questions from the floor and online. For shareholders attending online, you can start submitting questions now. Please note that questions will be moderated to avoid repetition and to summarize lengthy questions.

We will not address questions that I consider are not reasonable in the context of this meeting or that repeat earlier questions, which otherwise may restrict the opportunity of other shareholders having a fair chance to have their questions heard.

Finally, for some reason we do not have the opportunity to answer your question, we will look to answer them promptly via e-mail. And at the conclusion of this meeting for those present here in the room, we invite you to stay and enjoy some light refreshments.

Now let's begin with the Board update. The financial year 2025 marked the completion of Board renewal, a process that had been -- that has brought new perspectives and deep sectoral experience to Fletcher Building. I was honored to be appointed Chair in February, and I'm pleased to be working alongside a very capable and diverse group of directors.

We welcomed Tony Dragicevich and Andrew Reding onto the Board in August last year, Jacqui Coombes in April and James Miller in June. Each brings valuable expertise in governance, operations and our industries. Sandra Dodds continues to lead our Audit and Risk Committee; while Cathy Quinn, who chairs our Safety, Health, Environment and Sustainability Committee and our Disclosure Committee, remains a key contributor to our governance and legal oversight, particularly in relation to the legacy issues that we are working our way through.

This refreshed Board is well positioned to support the business through its transformation. We're focused on ensuring strong oversight, strategic clarity and accountability across the group. With the Board now renewed, we are confident we can support management in executing the turnaround plan and delivering long-term value to the shareholders.

Now turning to the numbers. Revenue for the year was $7 billion, which was down 9% on the previous financial year. And earnings before interest and tax, before significant items, totaled $384 million, which was down $125 million on financial year 2024.

Our EBIT margin fell to 5.5%, and we reported a net loss of $419 million, which followed on the $227 million loss reported in financial year 2024. Despite these headwinds, we made substantial progress on strengthening the balance sheet with our net debt reducing from $1.77 billion to $999 million at the 30th of June.

This reduction includes the proceeds from the capital raise undertaken in November 2024, and I want to take this opportunity to thank all those shareholders who supported that capital raise. We also generated $501 million in operating cash flow.

Capital expenditure and investments totaled $313 million, which were down from $420 million in the prior year, reflecting disciplined capital allocation. Return on invested capital was 4.5%, which is down from 5.5% in the prior year. And we remain focused on improving this metric through cost-out initiatives and simplifying our portfolio.

Through last financial year, we made significant progress resolving legacy issues that have adversely impacted Fletcher Building in recent years. The New Zealand International Convention Centre is now effectively completed and acceptance testing and compliance processes are underway, and we expect to hand over this magnificent building to SkyCity shortly.

We've also advised to the market that there are claims related to the convention center, and we intend to vigorously defend ourselves against SkyCity's legal proceedings, and we are confident in our position. Our court proceedings against the roofing subcontractors on the convention center are nearly complete with judgment expected in the second half of this financial year.

In Western Australia, the remediation of the ceiling pipe issues continues to track well. And as of the 30th of June, nearly 1,000 ceiling pipe replacements have been completed, 55 homes remediated -- fully remediated, I should say, and over 2,000 leak detectors units installed. Importantly, costs remain consistent with our estimates and no additional provisions have been required for the West Australian partnership.

The impressive Puhoi to Warkworth motorway project was opened to the traffic in June 2023 and reached full works completion in May 2024. We've now settled all material outstanding claims with the New Zealand Transport Agency and insurers, closing out a complex and long running matter. These outcomes reflect our commitment to resolving legacy issues and in doing so, allowing the company to focus more fully on the future on our operational performance, strategic direction and delivering shareholder value.

So ladies and gentlemen, we've put a lot of noise behind us in the last 12 months. Despite the macroeconomic headwinds on both sides of the Tasman, our operating businesses delivered a number of encouraging results throughout the financial year 2025.

Our first concrete -- ready-mix concrete business increased its national market share to approximately 40% and to over 50% in Auckland. Golden Bay Cement now holds more than 60% market share nationally. And Winstone Aggregates commenced the on-site concrete recycling. This is a step forward in reducing waste and cost, and it's a win-win, if ever there was one.

Winstone Wallboards are achieving significant improvements for the new Tauriko plasterboard plant with A grade recovery yields consistently exceeding 95%. Fletcher Insulation in Australia introduced 16 new products during the year, demonstrating innovation and responsiveness to the market needs. And Waipapa Pine, the operation there is now operating at full capacity, contributing to our manufacturing footprint and supply chain resilience.

These operational highlights reflect the strength of our portfolio and the continuing efforts and dedication of teams across the group. Whilst the result of the 2025 financial year was disappointing to all of us, decisive action has been taken to reset the business. We have enhanced the capability of our Board and senior management team, so we've appointed 4 new Directors and 6 new executives during the year.

We've taken action to address the corporate structure, restructuring from 6 divisions to 5, reducing divisional overhead and bringing decision-making closer to our customers. Approximately $200 million of cost savings were implemented in financial year 2025 and a further $30 million were announced at our Investor Day in June this year with cost reduction remaining an ongoing area of focus.

We achieved a 43% reduction in net debt to $999 million as of the end of June, and we have clarity with regards to our medium-term strategy, which was presented to shareholders in June. And we are developing a culture of accountable, empowered leadership, transparency and performance. I believe we have the building blocks in place.

As we laid out at the Investor Day, the business' medium-term focus remains on manufacturing and distribution of building products and materials. We've implemented urgent actions to stabilize the business and are now focused on embedding a high-performance culture across the group.

Divisional autonomy is being increased with business unit returns being measured against industry-specific weighted average cost of capital targets. Underperforming units are being evaluated, and we are taking steps to decentralize corporate functions and reduce central costs. Dividend payments remain paused until we reach the lower half of our net debt target range, which is $400 million to $900 million.

We are targeting investment-grade credit metrics and a more resilient capital structure. Overall, the construction sector is currently under extreme pressure. However, we have a clear strategy and our renewed management has already been taking bold steps to mitigate the downside and position the business well for when demand does return.

Before I close the section, I wanted to touch on the challenging trading conditions that we've experienced in the first quarter of the financial year. Our quarterly volume update, which was released last week, showed further declines in trading volumes and ongoing pressures on margins.

The primary driver of this continued weak demand and heightened competitor -- sorry, the continued weak demand and heightened competitor activity, particularly in the New Zealand market. Light Building Products volumes were generally below prior corresponding period, so same period last year, but slightly higher compared to the fourth quarter of financial year 2025.

Across the divisions, margins were relatively stable with production efficiencies and cost management offsetting soft volumes. Heavy Building materials experienced some pronounced volume contractions with Winstone Aggregates volumes down 4.1% versus the fourth quarter financial year 2025 and 6.3% versus the prior corresponding period last year, reflecting weaker roading and project activity.

Competition continues to be felt across the group with margins in steel and distribution coming under particular pressure this quarter. To offset some of this impact, we are controlling what we can by taking out another $100 million of cost, which Andrew will discuss in more detail shortly.

On that note, I will hand over to Andrew to speak to operating performance, our stakeholders and the turnaround plan. Over to you.

Thank you, Peter, [Foreign Language]. I would also like to add my welcome to those joining the meeting today, both here in the room and online. Let's begin with a look at where we are in this cycle.

In New Zealand, we have experienced a prolonged period of subdued demand in the residential and commercial construction markets, and we expect that to continue through financial year 2026. Building merchant sales remains a reliable proxy for sector activity, and our current data shows nominal sales across the wider merchant sector tracking below prior year levels even before adjusting for inflation.

This weakness has persisted for the past 18 months with rolling 12-month figures well off the peaks of the last cycle. The softness is broad-based, affecting both residential and nonresidential segments. In Australia, we're seeing early signs that the gap between completions and commencements is beginning to converge, for total dwellings, approvals and commencements are starting to align, indicating a potential stabilization in the pipeline.

New house activity, however, remains slower to respond with commencements still lagging approvals. Australian market conditions remain mixed. While some segments show resilience, others continue to face headwinds from interest rates, labor constraints and elevated input costs.

As Peter mentioned, in the interest of providing transparency and insight to shareholders and analysts, we recently began publishing quarterly volume data. This has been well received, particularly by institutional investors and equity analysts. We announced our quarter 1 financial year 2026 volume data last week.

On the left of the slide, you can see product volumes in New Zealand going back to just before COVID. These show that market conditions remained extremely weak in the first quarter. We experienced a mix of volume outcomes, but across the board, margin weakness continues.

As well as the weak demand across key markets, we are seeing heightened competitive activity, particularly in the New Zealand market. On the right of the slide, you can see the equivalent data in Australia. There, volumes have improved slightly quarter-on-quarter except for Stramit, but remain below financial year 2024. Laminex, Iplex and Fletcher Insulation are adapting to market conditions with targeted product and channel strategies.

We continue to monitor trends closely and adjust operations accordingly. Across both Australia and New Zealand, we anticipate market conditions will remain challenging throughout the remainder of this financial year. There is continued uncertainty on the timing of recovery in the residential sector.

It is worth noting, though, that the recent significant OCR reductions should, in time, support greater liquidity in the New Zealand housing market, and there are some signs of steadying or improving market conditions in Australia. However, we are not standing still waiting for market conditions to improve. We have continued to carefully examine our cost base.

Last week, we announced a further cost-out program targeting another approximately $100 million in annualized savings. Of that, around $50 million in benefits are expected to be realized in the second half of financial year 2026 with full annualized savings expected to be achieved in financial year 2027. This is over and above the $30 million of financial year 2026 cost out that was announced at Investor Day.

Together, these cost initiatives will aid profitability and partially offset the earnings impact driven by market conditions. The program is focused primarily on back-office operations and efficiencies, while seeking to maintain frontline operational capabilities so that our businesses are ready and have the capacity to respond when market conditions improve.

Our customers remain at the heart of everything we do. From Auckland Airport to Christchurch Te Kaha Stadium, our products and people are helping to build the future. These projects showcase the breadth of our capabilities and the trust placed in us by leading developers and contractors.

To give some context to these examples. During Auckland International Airport's Taxiway Mike project, Firth and Brian Perry Civil completed their largest ever concrete pour of 1,300 cubic meters in a single 12-hour night shift.

The NZICC project is nearing handover, and once complete, will be a significant asset for New Zealand, capable of hosting events for up to 4,500 people. Finally, in Canterbury, our GIB products are used extensively throughout the new Christchurch Te Kaha Stadium. We are proud of the role we play in enabling infrastructure, housing and community development across New Zealand and Australia.

We're also proud of our community partnerships. From restoring back country huts to supporting trade academies and local infrastructure, Fletcher Building is committed to making a positive impact. These initiatives reflect our values and our role as a responsible corporate citizen. We will continue to support the communities we operate in and invest in initiatives that deliver long-term social value.

To conclude, we have acted decisively to reshape the business over the past 12 months. We've already implemented many of the key priorities, and we have clear action plans for the short and medium term. In financial year 2025, we implemented $200 million of cost savings and announced a further $30 million at Investor Day, but we haven't stopped there.

Further work in financial year 2026 is targeting another approximately $100 million of cost savings, which will be crucial to our profitability in a challenging market environment. These efficiencies will also improve our performance when we do see demand return.

Our corporate functions are being decentralized to give divisions and business units more autonomy and accountability and the divisional restructures, which are now complete, position us to focus our resources on the divisions and the projects that will generate the highest returns.

We're progressing a number of potential divestments, including our Construction division, CSP and our 13.4% equity stake in the Puhoi to Warkworth toll road. We're also progressing the strategic review of our Residential and Development division. But there is still a lot more work to do. We remain committed to rebuilding to an acceptable return on invested capital.

Over the medium term, we will embed the new operating model and continue to simplify our business portfolio. Once the balance sheet targets are met, we will reset our dividend policy in order to deliver sustainable and growing returns to shareholders.

I will now hand back to Peter to conclude the presentation section of the meeting.

Thank you, Andrew. Governance enhancements have been a key focus in financial year 2025. We've introduced revised financial reporting aligned to the IFRS 18 accounting standard with clearer breakdowns across revenue, earnings before interest and tax and cash flow. The financial results for 2025 -- the financial 2025 annual results presentation included significantly more detail in relation to our strategies and changes, thereby improving transparency for shareholders.

Quarterly volume reporting was introduced in July, providing timely insights into the market, and how the market is performing across the business. In September, we released the stand-alone remuneration report detailing executive and broader workforce remuneration. Our corporate governance statement was updated in August and now acts as a stand-alone document, outlining our frameworks and policies.

The Board's skills matrix has also been refreshed to reflect the new composition of the Board and is published on our website. These initiatives support our commitment to transparency, accountability and best practice governance.

In closing, financial year 2025 was a year of action. We've developed and communicated our medium-term strategy for the group that I think is very clear. We've implemented immediate steps to stabilize the business and reduce costs. Our focus remains on operating performance, customer service and reducing net debt, and we have clear priorities for the financial year 2026.

So while market conditions in New Zealand and Australia are expected to remain soft, we're well positioned to benefit from improved operating leverage when recovery begins.

Thank you for your continued support. That brings an end to the presentations. I'd like to now give any shareholders, both present here and online, the opportunity to ask questions based on what you've heard so far.

Our questions in relations to resolutions will be addressed alongside the relevant resolutions a little later in the meeting. [Operator Instructions] Before you ask your question, we would ask that you please state your name.

Coralie van Camp, shareholder. Mr. Crowley, I'm very pleased that you're chairing the Board. You are the first chair that I can ever recall who has had any experience at all in building and construction. And I think that, that should set a precedent for all future chairs of the Board that they actually understand building and construction from the nuts and bolts from the ground up because a lot has escaped previous Chairs who just came in, chaired the meeting and had absolutely no idea what was happening in the business.

So my faith is in you, Mr. Crowley, to get this company out of a dreadful situation and set a precedent for future chairs and people on the Board have it knowing what they're actually dealing with in this company.

Thanks, Coralie. We really appreciate your vote and thank your vote and confidence. And I think that vote of confidence, I think, extends through to the whole team. So we've got a new team on board. We've got a new management team, a well-led and engaged management team. And I think what we do, as a group, understand our business. And what I think we've got now is real clarity about where we want to take the business.

We're communicating. I think people understand it, our employees understand it. To your point, we've got the capability. We've got people already willing and able with the skills to get stuck into it and do it. And I'd like to think we're really putting in place the right culture for people who understand our industries, our businesses, they're performance oriented and we're open.

So that's what we -- where we want to go, Coralie. And I think it's exciting -- personally, I think it's exciting. I know it's very challenging, but it is an exciting time to be working with good people. So thank you.

My name is Alan Best, I'm a shareholder, and also I carry the proxies for about 330 small shareholders from the New Zealand Shareholders' Association. Last year, a fair amount of time was spent on the regular write-downs, which, of course, significant items. And over the last 10 years, only 2016 was able to manage very small provisions.

The provisions have canceled in the current year. Do you feel now that you have a handle on the claims that are coming forward and that provisions will return to something a bit more manageable and from our point of view, lower?

So Alan, you -- I just want to be clear because I absolutely want to answer your question. So you're talking about provisions against projects or you're talking about significant items?

Significant items.

Okay. Right. That's not -- which involves provisions, I might add. Okay. Thanks for the question. So look, I think what we're trying to communicate is that we're in the middle of a big turnaround of this company. And what you've got as a Board and management team who are reshaping the company, and we roll the sleeves up and we're prepared to deal with the issues.

So what -- in terms of the significant items, there's a lot there. But I think a significant portion of it comes out of the fact that since we last spoke at the meeting last year, we actually did raise the provisions for the West Australian pipes to deal with that, which was $180 million of that $700 million. There are other things that have come into play.

So the other important ones were that Andrew and the team as part of their portfolio, the strategic medium-term strategic review, there are decentralization, there are costs of getting out of businesses, Andrew touched on some of the businesses we exited, which were loss-making businesses. They're better gone than kept, but they cost money to get out of.

We -- as we've moved and Andrew has restructured from 6 divisions to 5, there are costs, there are redundancies involved in that. But more particularly, as we've gone after a more decentralized management style, the IT systems that we had in place were not the right ones to support a decentralized management approach. And the IT write-down to the order of $120 million, okay?

We then -- we also had significant -- we addressed a number of underperforming businesses that we've had on a watch list for some time that we're working to try and improve. The market conditions are such that we were better to take the write-downs of the intangibles, goodwill to brands on those businesses.

So -- and also, we had about a $58 million loss on the divestment of a nonperforming business, which was the Tradelink business, which we sold out of Australia. So they are -- these sort of numbers, they are big numbers, big, big numbers.

But what I want to -- I guess what I want you to take away is these have come out of looking at the business and working out what it is, we want this business to be in the future and positioning it for the future. And that's the work that Andrew and the team have done. They've done really detailed work on this, Alan. So does that sort of answer your question?

Yes, that does answer the question of the significant items. One of the other comments that I've heard in the trade, talking to an Auckland broker was that Fletchers is really too complex. And even for a broker whose business it is to analyze the different divisions and contribution to the whole, he's finding it pretty hard work to get behind the scene.

And I believe that your move to simplify the divisions is the right one, and I've said that to Andrew. So...

Would you like Andrew to comment on that? Or...

Yes. I think...

I would just say, you're right, okay? It's hard work. But I'm sure Andrew could give some more flesh to that if he likes.

I think what he was meaning was that overall, we can always expect some divisions to underperform and drag us back. And that's a problem. So your focus on ROI is obviously the right one. And I was saying to Andrew that the business is like an octopus. We used to say that of Fletchers, it's like an octopus in the trade. But that actually is a huge advantage because we all know and Octopus has 180 million neutrons in the center in intelligence. And then 40 million in every tentacle and we missed out on the 40 million neutrons in the tentacles in the past.

Well, I'm going to -- would you like to respond?

Yes. I think, Alan, you're apparently agreeing with our choice of decentralization. I'm not sure my troops want to be called tentacles, but that's about fine.

Any other questions? I just -- the gentleman up here. Gentleman at the front here. Thanks.

Chairman, my name is [ Sally Chen ]. I have about 3 questions. If the demands for the major products are weak, then do you think there are more resources focused a bit more on the quality assurance to prevent issues or the problem with the leaking products?

The other 2 questions. What do you think about the international competition? For example, do you find consumers or contractors can buy cheaper products from Asia, for example, given the same quality? And last question is, do you think it's too much for Andrew to be both MD and CEO at the same time.

Okay. Great questions. So I think the first question you're asking was about quality assurance and how we make sure that things like the issue in West Australia doesn't happen again.

So I think one of the things we do a lot of work on is QA. So we have registered laboratories in our plants, testing facilities. We test raw materials in, we test product that's going through, we test product coming out. I think one of the learnings -- my personal view with the Iplex situation was that you can have the greatest quality control systems and all the testing on the pipes that went to West Australia they're good.

There's not an issue with the pipes, but there is a risk and we were alert to it around installation, okay? So you can supply a product that fits the bill. If someone misuses it or installs it incorrectly, that's a problem. So that is a big watch out for us that we've got to be more alert as to how our products are installed.

Classic one, concrete -- ready-mix concrete. The truck is loaded, it's loaded to great accuracy in terms of how much cement, how much water, how much materials go in to produce the product. Quality assurance on all the products. You go to a concrete site, someone wants to put more water in the mix because it makes it easier to place, you just can't let that happen. That destroys the integrity of the product.

So again, it's sign offs. It's -- people have got to sign away. They ought to take responsibility for it. So we've got great QA. What we've got to be alert to is how and if our product is misused in the market. And I think that's just a really -- it's a big watch out. It's a big learning, a big risk understanding that we have as a Board these days about that, about installation risk. That to me is the main in the field risk with product.

Second question was about importation of products, so people bringing their own product into the country. Well, the fact is that the markets, the borders are open, we do see imports and things like cement coming. We're the local supplier of cement. We have 60% market share, which is pretty material. We're up against some big, big players in the market.

One of them whom I worked for, for 15 years, including looking around New Zealand, I think our -- how we operate is great. GIB, it's one thing to make a product, another thing to have how you serve your channels, how you add value to customers. And people if they want to come in and do it, they need to incur significant cost of absolutely going to the customer.

And one of the things -- we've competitive advantage with GIB. We don't just deliver plasterboard to the site, we deliver it to the room. That costs money to do. And you've got to have scale to do it. And I guess that's the important part of our value proposition. So you could work your way.

Some areas were a bit weaker, some areas were stronger. I think it's just taking a balanced approach and understanding who your competitors are and being prepared to compete. Third question was with regards to Andrew as Chief Executive and Managing Director. So in that -- it's a governance question. So I'll tell them how good you are.

When we appointed Andrew, we did think long and hard about a fully independent group of Directors. Could we bring in an Executive Director who is non-independent? And what the appeal of having Andrew in the capacity that he has is, yes, he's part of the management team, but he's also tightly involved in the discussions and the thinking of the Board, which is quite different. It's not the same as management.

So he's in a wonderful position to actually understand where we're all coming from and to take it back into the team and explain it. So I think it's a really important conduit that I think works really, really well. Andrew, would you like to add anything on that or...

Look, I think historically, there may have been a bit of a schism grew up between the Board and the direction the Board wants to go in and the management, and I see me sitting as a Director and as the CEO is being able to bridge that gap and ensure that we're all aligned on the direction we want to take the business. And I think that's working well.

Okay. Sorry, gentleman here at the front.

My name is [ Jagan Dev ], and I'm a shareholder through Sharesies. So I was just checking the stock prices. So last year, company issued the capital at $2.4, that was 17% discount. And right now, prices are $3.20. So even after making a loss of around $0.25 per share, the stock price is up.

But when I see the actual numbers of balance sheet overall, like we are reducing our debt. The first line, there were 6 points and majority of them were downside. Like we were reducing everything. We are focusing on cost saving side. So don't you think that the company is much more pessimistic compared to the New Zealand government's idea of pushing for the economy?

Because it looks like that your actions are clearly like you're thinking that our future is not as certain. So let's take everything under control while if we just see the headlines of the NZ Herald and everything, it's like government is saying we'll put $7 billion in infrastructure and everything. So that I think 2 things are at different direction.

Well, I guess the nub of the question is it's not for us to comment on what the government thinks, okay? They've got a view. But Andrew and the team are reacting to the old sporting analogy, you play what's in front of you. What we're seeing is what we're seeing. And I don't think we're alone in seeing how the markets are operating at the moment.

And the statistics of housing starts and work down, that's out there. They are real numbers. So what Fletcher Building has is a significant operating leverage. So in other words, fixed costs. So when the market goes up, you should do really well. When the market goes down, you are in a world of pain.

And we're not waiting for official cash rate benefits to improve. We can't wait for some road to be built. Things like -- we've just got to get on and manage what we're managing. And Andrew and his team, they are running hard at it to make sure we've got a competitive position through the cycle.

Sir, I have 2 small questions. So one question is that it was mentioned that SAP rolled was stopped.

Sorry, what?

SAP rollout is stopped. IT system rollout, SAP. So which system we are rolling it now?

Sorry, we...

What is the new system that we are running?

Yes.

So what was originally planned was that SAP was going to be rolled out across the entire group. And the expenditure on that to date was about $135 million gross. We don't think we need to spend that money in the business. We have IT systems there already that we can turn around and remediate and extend their life. So by stopping this project here, we've saved a large amount of capital expenditure, and we are still confident that we've got no technology debt that we have to make up.

Okay. Then in that case, I see that the auditor remuneration is around $4 million. That was also the same around like last year, around $4 million every year we are paying to the auditors. So to me, it seems that it is because of the complex structure of the company.

You're talking about the audit fees.

Yes, auditor fees.

Yes. Well, I think our auditors work hard as a gentleman. I think it was Alan -- Alan Best was talking about the complexity of the organizational structure. Yet these are real costs. And yes, if we can simplify it, reduce the complexity, you would think there are savings that come from that. I don't think it's -- I don't mean that's lower quality audit. I just mean that it's easy to understand what we've got our hands around.

Now this is surely my last question. On the industry segment wise, on Page #15, it is mentioned that Australia is mentioned with the other segments, but Australia is a country. So why is it mentioned there on Page #15, industry segment's income statement.

Okay. I'm going to -- we've got our CFO over here, Will Wright, he can answer that question for you.

Yes. Thanks for that question. We reported last year's financial accounts on the basis of the old organizational structure. So Australia at that point in time was a division. Moving forward, we'll be reporting on the new organizational structure where Australia is not a division.

Okay. Thank you. Any other questions? Otherwise, we'll go to questions online.

Thanks, Chair. We have 3 questions for this section online. The first one is from [ Evan Wells ]. Given the low comparative share price versus 2 to 3 years ago, what are the chances of a takeover of the whole company and what actions are the Board taking to contend with this?

Thanks, Christian. It's a pretty fundamental question. Look, we know the share price is weak. We have a view of intrinsic value of what this company is worth and therefore, what a share in Fletcher Building is worth. The situation is that the market is really tough. We're doing a lot of work to simplify our structure, our strategy, take costs out. And over time, that will benefit shareholders.

So you can only manage what you can manage. If someone wants to have a look at us, go for it. But we are working on the business to improve the business and to get the shareholder the share price up, working on it with the levers we can pull in this market.

Second question from Stephen Mayne. How many full-time equivalent staff do we currently have? And is this likely to fall over the coming 12 months with the rapid rollout of AI? Which parts of the business and operations are the most prospective for AI productivity gains and how energetically are we embracing those opportunities?

Yes. I think Andrew...

So AI is obviously quite a complex topic, and it's something that you don't do on mass in the sense that it has a whole number of different areas it's applicable to. So it's more like micro initiatives rather than major projects.

So what we do with our GMs is try and expose them as much as possible to what the different sorts of AI initiative might be and then very much in the decentralized model, leave up to General Managers to turn around and decide where they can apply that technique and that technology.

Next question is from [ Scott Earnshaw ]. Is the new panel board plant in Taupo due to be completed and in production by the end of 2025? If not when?

So the panel board plant at the moment is forecast to produce board in July '26.

There are no further questions for this section online.

Thanks, Christian. Ladies and gentlemen, I will now move on to the formal business of the meeting, which is to vote on the resolutions outlined in the Notice of Meeting sent to all shareholders in September.

The resolutions are ordinary resolutions, and to be passed, they will require the approval of a simple majority of votes of those shareholders entitled to vote and who vote on the resolution. As advised at the beginning of the meeting, we will vote on the resolutions by way of a poll.

Any undirected proxy votes given to the Chair of the meeting or any director will be voted in favor of the resolutions. Any directed proxies given by the shareholder will automatically be cast as directed. For eligible online attendees, voting on the resolutions is now open, and you can vote at any time until I declare the voting closed.

For shareholders and proxies in attendance at the meeting, I will invite you to place your completed and signed voting proxy form in one of the ballot boxes which will be passed around the room after all the resolutions have been introduced to the meeting. If anyone in the room is unsure how to complete the voting form, please go to the desk, which is out there where someone will be able to help you.

I will now turn to the resolutions. Now turning to the first resolution. It concerns myself, and I will hand over to Sandra Dodds, who is the Chair of our Audit and Risk Committee to conduct the consideration of this resolution.

Thank you, Peter. It's now my pleasure to move that Peter Crowley be reelected as a Director of the company. Peter was appointed to the Board on the 1st of October 2019 and appointed Chair on 3rd of February 2025. He is the Chair of the Nominations Committee, a member of the Disclosure Committee and is considered by the Board to be an Independent Director.

His credentials are outlined in the explanatory notes to the Notice of the Meeting. The Board unanimously recommends that shareholders vote in favor of the reelection of Peter Crowley. I now extend to Peter the opportunity to speak about his reelection before we proceed to discussion on the reselection.

Thanks, Sandra. Ladies and gentlemen, it's been a privilege to serve as Chair since February, and I stand before you today seeking your support for reelection as a director at an important turning point for Fletcher Building.

When I was most recently elected and reelected as a Director back in 2022, I spoke about the value of combining deep industry knowledge and governance discipline. These themes remain the foundation of how I approach my responsibilities.

I have over 40 years' experience as an executive and director in the building products and construction materials industries across Australia and New Zealand. And I bring to the role a strong mix of operational insight, governance skill and a deep commitment to the people and the communities which we serve.

I've got to be candid, Fletcher Building has not delivered the results our shareholders deserve. Our performance has lagged expectations even as we navigate some extraordinarily challenging market conditions. And it's clear -- crystal clear that a turnaround must be accelerated.

That's why I'm proud of the steps we've taken to refresh and strengthen our Board, bringing in new Directors who had a breadth of experience, sharper perspectives and the resolve to drive change. Leading this team of committed and talented individuals is a responsibility that I take seriously. And together, we are focused on setting the company back on a path to consistent performance and shareholder value creation.

At the same time, we've made important progress in reshaping Fletcher Building to position it for a stronger future. We've reduced net debt significantly, actually. We've improved our balance sheet strength and its resilience. And we've continued to make progress in resolving our remaining legacy issues such as the Puhoi to Warkworth project.

And as we've mentioned earlier, we've set a path for the handover of the New Zealand International Convention Centre shortly. We're simplifying our portfolio to focus on our core strengths around the manufacturing and distribution of building products, and we've taken bold steps to streamline our operations so we can be now more efficient and agile.

Looking forward, my focus as the Chair is twofold. The first is sharpening our strategy and portfolio. We're concentrating on our core strengths in manufacturing and distribution, businesses where we know we can win. At the same time, we are reviewing noncore areas to ensure capital is deployed where it can make the best return.

The second thing I'm focusing on is restoring operational discipline. My own background in building products and wholesale distribution has reinforced for me that efficiency, cost control and customer focus are the foundations of sustainable performance, and we're embedding these disciplines across the group.

Most importantly, we are committed to rebuilding shareholder value. We have a strong financial footing. We've got market-leading and resilient businesses and a refreshed Board and a management team, a clear plan and the people who are ready and willing to deliver it.

While the turnaround might not happen overnight, the steps that we are taking now will put Fletcher Building back on the path to consistent performance and sustainable returns. I really want to take this opportunity, ladies and gentlemen, to acknowledge the resilience and dedication of our people across both Australia and New Zealand.

Over the past few years, I've made a deliberate effort to visit sites across the businesses to maintain a close connection between the Board and our people. I just tallied up just out of interest, so far less than -- in 11 months I've been to 20 sites. And by the end of November, I'll have been to 23 sites. So I'm out and about, and I know my colleagues, we do -- we get out and about.

And we go out and about because we want to see what the assets are, we want to meet our people, we want to understand our customers and we want to interact with them about safety and the operational performance of the business. So we are really active, and we think it's important.

And what you come away with when you see them is that we really have good teams, people committed -- really strong teams. They're committed to safety, they're committed to the customers and they're committed to innovation. That culture of resilience and customer focus is one of Fletcher Building's greater strengths, and it gives me great confidence in the future.

Fellow shareholders, Fletcher Building is not where it needs to be. We're taking the hard decisions, and we are strengthening governance, and we're resetting the business with a renewed sense of direction and discipline.

And with your continued support, I look forward to leading this refreshed Board. We're working closely with management and applying my own experience of over 40 years to ensure Fletcher Building regains its strength, credibility and leadership in our industry. Thank you. Thank you very much.

Thank you, Peter. I now invite discussion on the resolution. Are there any questions that shareholders would like to ask Peter Crowley? If you're in the room, I invite you to raise your hand and a microphone will be handed to you. Before you ask your question, please state your name. Are there any questions? Are there any questions, Christian, online?

We have 1 question online from Stephen Mayne. Is Peter intending to serve a full 3-year term and then recontest in 2028? And as a former building products CEO himself, how does he discipline himself not to overly micromanage the CEO and wider management team? Could the new CEO comment on how hands-on the Chairman has been so far during his time at the company?

That's a pretty good question. I'm just trying to remember all the elements of it. So look, I'm 68 years old, I think it's in the documents that people have seen. This is my third term. I'm not sure I would go around again. It's not because I don't like the business or anything like that, but I want to make sure that the business gets the best of me over the next 3 years.

So I think it's really important that we understand that. So I'm giving it everything I've got. I'm working with a team who are empowered, they can make decisions. I think it's really important to have micro management. What I think the Board's got to be clear on is the management is clear on what they got to do, okay?

If we're clear that they're clear and if we got the systems in place to track performance, monitor performance and the ability through Board meetings to feedback on performance, I think you'll let the management get on with it and get it done. Sorry, Christian, was there a third part...

Could the CEO comment on how hands-on the Chair has been?

I don't think I've ever been micro-managed. So it wouldn't happen.

Just to ask, are there any more questions, Christian?

No further questions online.

Okay. There appears to be no other questions, then I'll hand it back to you, Peter. Thank you.

Thanks, Sandra. Ladies and gentlemen, we'll now move to resolution 2, which is the election of Jacqui Coombes. It is my pleasure to move that Jacqui Coombes be elected as a Director of the company. Jacqui was appointed to the Board on the 14th of April 2025. She is the Chair of our People and Remuneration Committee and a member of the Nominations Committee.

The Board has agreed that she is an Independent Director. Her credentials are outlined in the explanatory notes to the Notice of Meeting. The Board unanimously recommends that shareholders vote in favor of her election. I would now ask Jacqui to address the meeting in support of her election.

Thank you, Peter. Good morning. It's a privilege to be standing before you today seeking your support for election to the Fletcher Building Board. I was appointed in April this year. And while my tenure has been short, I've already seen firsthand the scale of the opportunity we have to restore Fletcher Building's performance and reputation.

With over 30 years of leadership experience in the building industry and retail sector, I bring a wealth of experience and expertise to this journey. My background is rooted in operational excellence, customer focus and people leadership; capabilities, I believe, are critical as we drive Fletcher Building's performance.

For over a decade, I led Bunnings New Zealand, and I later served as Group HR Director for Bunnings across Australia and New Zealand and a team of 55,000 people. I've also worked in operational and retail leadership roles in businesses, including Spotlight, Noel Leeming, Woolworths and Aldi in the U.K.

I joined the Fletcher Building Board because I believe in the potential of this company while recognizing the challenges that we face. I believe you are right in expecting more as shareholders of this business. The company has underperformed and the market has been clear in its judgment. Economic headwinds and legacy issues have tested confidence.

But I also see a business with strong fundamentals, a proud history and a renewed determination to get back on track, including to take the benefit of the market improvement as the cycle turns. As Chair of the People and Rem Committee and a member of the Nominations Committee, I've been focusing on ensuring we have the right leadership, the right incentives and the right culture to drive performance.

Governance matters and so does accountability. I bring a sharp commercial lens, a deep understanding of frontline operations and a belief that culture and performance go hand-in-hand.

Looking ahead, I'm optimistic. I believe Fletcher Building can emerge from this period stronger and more resilient. We're simplifying the business and focusing our strategy. My particular focus is ensuring we have the right people in the right roles supported by a culture that values performance, transparency and customer focus.

To our shareholders, I understand your disappointment with the company's performance, and I share your expectations of improvement. I want to assure you that I am committed to working with my fellow directors and management to deliver the performance needed to rebuild trust and create long-term value.

With your support, I look forward to continuing to serve on the Board and contributing to the company's renewal and success. Thank you.

Thanks, Jacqui. I now invite discussion on the resolution. Are there any questions that shareholders would like to ask Jacqui Coombes? If you're in the room, I invite you to please raise a hand and a microphone will be handed to you. Before you ask your question, again, I'd ask if you please state your name. The gentleman in the front.

My name is Jagan Dev. So my question is, I think around $1 billion was employee cost for a year for this company. Employee cost is $1 billion. Is it right to say? I read somewhere.

My question is about how to motivate the company employees through remuneration? So when the stock price was so low and when we raise the capital at $2.4, how about offering ESOP to the company employees?

And when we say we have strategic business units, we can give the SBU offer to the Directors as well as the SBU heads and if some -- anyone who is at manager level or if the company can create a plan where even the lowest level employee can also think of joining, how about that to motivate the person to stay with the Fletcher for long term?

I'm not bumping your question, but we've got a section that's on the Rem Report and Rem principles. So I'm wondering if I can answer your question once we've done that part of the meeting. And I think that may answer some of your questions, if that's okay?

Okay.

And Jacqui is actually quite -- Jacqui will present on that...

And it's a very important topic. So thank you.

And it's a full presentation which I believe will address your question. So lady just here.

[ Madeleine Gunn ]. A number of years ago, I was at this meeting and the Chair of Board had presented at the very beginning these wonderfully competent Board members and then gave us dreadful results for the year. And I asked the question, did he consider that perhaps they might need more diversity on the Board.

Now because I was a woman asking the question, it was reported in the Herald that the Chair was asked, did they need more women on the Board. And I'm delighted to see that we have 3 women on the Board now, and Jacqui, delighted to support you reappointment.

But it's not just the gender balance that's really important. I, like Coralie at the beginning, really support the fact that we now have people on the Board who have experience in the industry. And I don't think the plethora of accountants and lawyers, however well experienced and well meaning, did an awful lot for Fletcher Building over those years.

So Peter, again, congratulations on the focus of the new Board and lovely to see 3 women on it.

Thanks, Madeleine, I really appreciate your vote of confidence. And I just -- it probably doesn't go specifically to the resolution. But we -- my colleagues, whether they be male or female, have the skills. They got the right skills, the talent.

You've heard just Jacqui talking in her speech that she's run a business with 55,000 people, that's a serious business. And she knows the distribution market in New Zealand inside out. And we need that because we've got a business called PlaceMakers and that is a focus of our -- part of our turnaround.

Just -- well, I've just got to run with this one because I think this is really important. We've got people irrespective of who or what they are that they bring talent, diversity is a good thing. We've got Sandra at the end, Sandra chairs our Audit and Risk Committee meeting.

Sandra actually is a Chartered Accountant, but he's not out of financial services. She worked for Downer she worked for Fulton Hogan in the contracting side of businesses and heavy building materials side, so the industries that we're in, looking at those businesses and how they perform. So it is really relevant experience. She knows what questions to ask in meetings.

And Cathy, as we've been through this raft of legacy work that we've been slogging our way through, which we're getting clear of it, that's the good news, she's been integral to helping us in giving us strong advice in the Boardroom about how we manage these things. So yes, we've got 3 ladies, but what a great 3 ladies. And then we've got the fellows to and they're the right mix.

Tony. Tony and I've worked together years and years and years ago. Tony runs the biggest aluminum extrusion business in Australia. He knows about building products. He worked for Carter Holt Harvey years ago. He ran the insulation business in Australia. His overlap of the businesses we operate is phenomenal.

We've got James Miller. James brings us -- well, he's going to talk about himself in a minute. So I'm actually going to leave James out because we reckon he's pretty good, but he can sing for his own dinner and then I can recap at the end. But again, with Andrew Reding, an absolute industry veteran in the industries that we operate.

So I'm just really confident that we've got the diversity of -- and I bring heavy construction materials and distribution. So the businesses we're in, we've got expertise. What the gender is, is almost irrelevant, but we got -- but it works really -- it's a good team. And it's a good team that works really well.

So Madeleine, I just wanted to take that bit of time to hopefully address your question and give the shareholders some comfort as to where we're coming from.

Any questions online, Christian?

No questions online.

Right. So let's move on to the third resolution, which is the election of James Miller. And it's now my pleasure to move that James Miller be elected as a Director of the company. James was appointed to the Board on the 1st of June 2025. He's a member of the Audit and Risk Committee, the Disclosure Committee and the Nominations Committee.

The Board has agreed that James is an independent director. His credentials are outlined in the explanatory notes to the Notice of Meeting. The Board unanimously recommends that shareholders vote in favor of his election. I'd now ask James to address the meeting in support of his election.

Thank you, Peter. Good morning, shareholders and colleagues. And following my recent appointment to Fletcher Building, I'm now seeking shareholder support for my election. I spent my career at helping businesses navigate complexity, unlock value and earn trust. From leading investment firms to chairing listed companies, I've seen what good governance looks like and what happened when it's missing.

I joined Fletcher Building because I believe in its significant potential. Also I believe in accountability. This is a business that has faced tough questions from shareholders, from the market and from within and quite rightly so. Performance has lagged expectations and confidence has been tested.

But in my short time on the Board, I've seen all of the ingredients for a turnaround, strong core businesses, very capable management team and a refreshed Board and a clear appetite for change. I bring to the table experience in capital markets, audit and risk and governance.

I'm currently the Board Chair of Channel Infrastructure, Director of Ryman Healthcare and Vista Group. I previously chaired the NZX and served on the Board of Auckland Airport and Mercury and led the investment strategy for Craigs Investment Partners.

Since joining the Fletcher Board, I've been actively involved in audit and risk disclosure and nomination committees. We're simplifying the business, reviewing our portfolio and taking significant costs out.

While these are all the right moves, I do caution New Zealand is in a recession creating significant headwinds for the company with high operating leverage such as Fletcher Building. However, I'm confident the business will come out the other side well positioned for the future.

As shareholders, I know your patience has been tested. I know your expectations are high. That's how it should be. And as a Director of a company -- of your company, I will continue to bring an independent, commercially grounded voice to the Board, one focused on restoring performance, rebuilding trust and delivering results.

Shareholders, it's a privilege to stand here today seeking election as a Director on the Board of Fletcher Building, and I ask for your support. Thank you.

So thank you, James. I now invite discussion on the resolution. Are there any questions that shareholders would like to ask to James Miller? If you're in the room, I invite you to please raise your hand and the microphone will be handed to you. As I said before, before you ask a question, we'd appreciate if you could say your name. Any questions? Alan Best.

Thanks, Mr. Chairman. I'm wondering whether Mr. Miller could tell us a little about the internal reporting systems. We all know that in a decentralized system, you need really immediate, timely and very sensitive reports. We've just seen cost savings or we're seeing cost savings in the IT area. What I would like to know from Mr. Miller is whether he's satisfied that the reporting back to the Board and through the management team is timely and sensitive to his way of thinking.

In fairness, I'm still doing my induction. So it would be hard to know that in detail. But everything I've seen to date would lead me to say there's just a complete level of professionalism on delivering those reporting through to the Board and through to shareholders. So I think it's actually first class.

Any other questions from the floor? Christian, do we have anyone online?

We have a question from Stephen Mayne. Could our 2 new directors up for election today, Jacqui Coombes and James Miller, please comment on their experience of the recruitment process? Did either of them know any of our Directors before engaging with the recruitment process?

I think I welcome you both to respond. Jacqui first.

I think New Zealand is a very small place, and I've heard of most of my fellow directors, but never actually worked directly with anyone from the Board. And I guess just to comment on that further as well, when I was approached about the Fletcher Building Board and was doing my due diligence and met all the Directors, one of the key reasons that was my decision for joining the Board was the experience that we've got on this Board table and what I felt that I could add.

Yes. Again, I've never served with any Director on the Board, but I obviously knew number of them, some of them I know quite well. The process was just the normal process that a Director would go through. So very professionally run. And, yes, what was the other part of the question?

I think that was the question.

No further questions online.

Thanks, Christian. Ladies and gentlemen, we'll now move to the fourth resolution. I now move that the Directors be authorized to fix the fees and expenses of the auditors. EY is the company's auditor and is automatically reappointed under the Companies Act. This resolution authorizes the Board to fix the fees and expenses of the auditor. EY audit partners are present at the meeting should shareholders have any questions of them concerning this resolution.

I now invite discussion on the resolution. Are there any questions in the room? No, doesn't look like it. Okay, Christian, any questions online?

No questions online.

Thank you. So we will now move to the fifth and final resolution of the company's remuneration report for the year ended 30th of June 2025 as detailed on the company's website be adopted. Before the vote, I'd like to ask Jacqui Coombes, the Chair of our People and Rem Committee -- Remuneration Committee, to provide some further details around the remuneration principles and framework.

Thank you, Peter. Whilst Peter said the rem report is online, we've just pulled out some key points that we thought you might like to discuss or to highlight for you today. In terms of our rem principles, the Board believes that it's critical to align exec remuneration outcomes to driving performance and creating value for shareholders.

Our exec framework is, therefore, focused on building a strong culture of ownership, accountability, everything that sits across our exec team. We want to attract and retain the best people and drive them to deliver sustainable performance and growth.

The Board uses four guiding principles to focus senior management rem frameworks. Shareholder value. We want our most senior execs to have a true ownership mindset, created through share ownership, so skin in the game; and strong alignment with shareholder value creation in the short and long term.

Our people. We want our rem structures to attract, motivate and retain high-caliber employees. We are aware of the highly competitive talent market, and we need to be competitive across all our rem elements.

Strategy. Our rem frameworks drive both long-term sustainable earnings and the in-year performance of the company with our most senior people aligned to these outcomes. The frameworks recognize that we're driving growth and we'll incentivize and reward our execs for delivering it.

And risk. Senior execs need to be accountable and take ownership for outcomes with consequences both good and bad. Our rem framework supports our principles through 3 main rem components: fixed rem, short-term incentives and LTI, long-term incentives. Taking fixed rem first. This is key to attracting and retaining high-caliber leaders and skills in a competitive Trans-Tasman market for talent.

Turning to our incentive schemes. These are designed to focus on both in-year performance through the STI component and a long-term sustainable earnings through the LTI component. With short-term incentive, we balance both financial and nonfinancial goals. Having nonfinancial goals means we can set targets for our exec to continue to make progress on the most critical areas of the group's long-term health.

Given the group's recent financial underperformance, the Board have taken 2 immediate actions in relation to financial year 2025 STI. Firstly, we applied the Board's discretion to forfeit all 2025 incentives, even where business units performance hurdles were met, achieved or exceeded.

Secondly, we weighted the financial goals for financial year 2026 at 80%. This reinforced accountability for financial outcomes whilst ensuring we preserve a focus on critical safety and nonfinancial priorities, which we weighted at 10% each.

In relation to the long-term incentive, in financial year 2025, we adopted a shareholder return measure to align with shareholders' financial outcomes and a return on funds measure. There was no payout for LTI in financial year 2025. With the strategic review now completed, we are reviewing how our incentive frameworks can best support our new strategy and operating model going forward.

Turning to the Managing Director and Group CEO. Andrew's rem package has a strong emphasis on long-term performance and is tightly tied to share price performance. As shown by the chart, Andrew's fixed rem is $1.5 million, with approximately 3/4 of the total package at risk through performance-based short- and long-term incentives, 71% at risk at target and 75% at maximum.

If the CEO performed strongly, over half the package would be paid in equity, which would vest over a period of time. This creates tight alignment between the CEO and shareholders, 57% in equity at target and 56% at maximum. I hope the additional background has been helpful for shareholders. I'll now pass back to Peter.

Thanks, Jacqui. Ladies and gentlemen, I now invite discussions on this resolution. Are there any questions that shareholders would like to ask about the remuneration report? If you're in the room, I invite you to please raise your hand and a microphone will be handed to you, and we ask that you state your name. Any questions?

So how many employees will be eligible for this type of remuneration structure?

This is Andrew's structure.

Okay. But -- so is this point almost only for the Board of Director's remuneration or for the other employees also? It's only for Andrew. It seems to me that I'm confused that this question is only for the Andrew's remuneration, right?

Yes, that's right.

Right. Okay. Because I was actually comparing with the SkyCity's annual report where they gave a breakdown based on the salary slab, till $50,000 to $1 million.

So in our rem report there is a structure -- sorry, I don't know the page number off-hand. We don't talk about individual employees and team members, but we do give a range of what our payments look like overall. Page 83 of the annual report. But if you have further questions, feel free to come...

Thanks, Jacqui. Any other questions in the room? Christian, online?

We have a question from Stephen Mayne. Many thanks for once again, voluntarily putting the remuneration report up for a vote today, unlike the vast majority of New Zealand registered companies. Last year, we had an 11% vote against the rem report. Did any of the proxy advisers recommend against our remuneration report this year and has it led to another double-digit protest vote? If so, what was the issue investors were concerned about?

I'm very happy to take that question. First of all, just on why we put this up for a nonbinding vote is we don't have to do this, and I'm not presuming to drive policy in New Zealand as to the other companies. Sure, this is something we choose to do. We think it gives pretty good transparency about what our pay structures are and I guess, the decisions we make and why with regards to pay.

But it's also a really good way of getting feedback from shareholders, so I think we've got it right or we've got it really wrong. In terms of proxy advisers, they've all voted in support or their reports indicated support for our remuneration report. So I think that's -- it's certainly a very helpful thing.

Was there another part to the question, Christian?

If so, what were the issue investors were concerned about with the rem report?

This year?

Yes.

Well, they voted and supported, so there's no issues. But I just actually -- we've got to be alert and awake to -- things change over time. We've got to be working and evolving and modifying how we conduct business. But I think the proxy advisers, and I think the shareholders generally think we got it pretty right.

So no other questions?

No further questions.

So ladies and gentlemen, we'll now vote on the resolutions. I invite you now to cast your votes on the 5 resolutions as displayed on the screen. Please now cast your votes. The voting will close shortly.

Please ensure that you've cast your vote on all 5 resolutions. We'll take a few minutes break now to allow you time to finalize your votes. For those in the room, please place your completed voting proxy forms in the ballot boxes that will be handed around.

[Voting]

Ladies and gentlemen, I think the voting on the resolutions is now closed. Postal and proxy votes received. You'll now see the votes in the screen -- you will now see on the screen the results of postal voting received ahead of the meeting for the resolutions that we put forward.

These postal votes do not include discretionary proxies held and these will be voted on at the meeting. The company's auditor, EY, will act as scrutineer for the polls. The final results of voting on the resolutions will be advised to the NZX and the ASX this afternoon, which will obviously incorporate anybody that voted just now.

So we now turn to the last part of the meeting where shareholders have the opportunity to raise any final questions. I would now like to give any shareholders both present here and online the opportunity to ask questions. Can I ask our shareholders to avoid taking us back on matters that have already been fully discussed already? We'll now answer any questions starting with questions from the floor here. Gentleman here.

[ Kevin Palmer ], shareholder. Given the liabilities of the SkyCity conference center issue, if the court case is successful, does the roofing company have the assets or liability to cover -- to settle that claim? Or is there a risk they will simply go into liquidation and the Fletchers with the cost liabilities but winning the case? And how much would that potential liability be?

Would you like that? Or would you...

So I think you're asking whether the court actions taken against the subcontractors at the SkyCity, whether there's any debt to it. They have a third-party liability insurance policy, which we went into the court stating that it was getting access to that insurance policy that we are after. So yes, they do have some debt.

And does it fully cover the potential liabilities?

I'm not quite sure what you mean by the potential liabilities.

Whether you have a sum in mind of how much you will try to claim off them?

Yes.

So does that liability insurance cover that full amount?

Yes. And just to add, we have taken no recognizance of any possible settlement on that policy into our books at all.

Any other questions from the floor? All right. Christian, online?

Two final questions online. First one from Stephen Mayne. There was a 22.7% vote against the reelection of Independent Director Cathy Quinn at last year's AGM. What was the issue? Has there been any more director election protests today?

Well, I think you can see from the votes that we put up that shareholders have very kindly been supportive of the Board. So I think those issues are behind us.

Final question from Stephen Mayne. Why is the Chair referring to postal voting? Surely, the vast majority of proxy votes were done online? Also, could the Chair please release the headcount data in the poll showing how many shareholders voted for and against?

Well, I guess it's my bad on I'm talking postal not online. Yes, what was the second question?

Could the Chair please release the headcount data and the poll showing how many shareholders voted for and against?

No, I don't think so. I don't think we don't have to do that. I don't see any upside to that at all. It's clear that shareholders have voted and a lot of shareholders have voted. I think that's a really important thing. It was a big -- it's a big turnout in the room. There's a big turnout in the online voting and it's supportive. And I think that's -- the big takeout for us is our shareholders are supporting us getting on with the strategy we've developed and taking the business forward.

No further questions online.

Thanks, Christian. So ladies and gentlemen, I now declare the meeting closed. I want to thank you for your attendance and participation today. And we'd be delighted if you join us for some light refreshments just down there. Thank you very much, and have a great day. Thank you.

Thank you for standing by, and welcome to the Fletcher Building FY '25 Full Year Results Briefing. [Operator Instructions] I would now like to hand the conference over to Mr. Andrew Reding, Managing Director and Group Chief Executive Officer. Please go ahead.

Good morning, and welcome to the presentation of our full year results for the 12 months ended 30th of June 2025. And I must firstly apologize if I cough and splutter a little bit, as I picked up an allergy overnight. And if you're in this room, you'd notice everybody is at one end and I'm at the far end.

So moving to the agenda on Slide 3. I will provide an overview of FY '25 as well as the operating performance of our divisions, and then Will Wright, our Group CFO, will talk through our financial performance. I'll then cover the stakeholders that are so important to our business and close with how we are planning and thinking on the year ahead, and we'll take questions after that, but please keep these to 2 each. Though you are welcome to send through any more or additional questions to the media team.

Turning to Slide 5, a summary of our financial performance. F '25 was a challenging year across all sectors with revenue and margin for the group, both down. Net loss for the year was $419 million, which includes $702 million of significant items, and Will is going to speak about these in more detail shortly. On a more positive note, we made substantial progress on our balance sheet reset including net -- reducing net debt to $999 million following the successful capital raise and divestment of Tradelink. CapEx was down, reflecting on our disciplined approach to capital allocation and although net cash from operating activity was down, it was still robust given the trading environment. While the macro backdrop remains tough, we are positioning the business for the realities of the current market.

Moving to Slide 6, our medium-term strategy. At our Investor Day in June, we presented a clear focused strategy to improve performance and deliver sustainable shareholder returns. This outlined a medium-term focus on manufacturing and distribution of building products and materials. The strategy rests on 4 key pillars: Firstly, taking immediate action and executing our turnaround plan to restore profitability and cash flow to target levels; secondly, ensuring high performance in every part of the organization; thirdly, empowering our leaders to make faster and more effective decisions closer to the customer; and fourthly, ensuring we have a resilient capital structure that supports investment while protecting against volatility. This is a deliberate and disciplined road map that will lead to a more focused, profitable and resilient Fletcher Building.

Moving to Slide 7. Over the past 12 months, we have acted decisively to reshape the business with many key priorities already implemented and clear actions for the short and medium term. In Australia, steel and corporate, we've undertaken structural changes that will deliver around $15 million a year in annualized savings. We have closed underperforming operations, halted the SAP rollout and reduced forward capital commitments. Our corporate functions are being decentralized to give divisions and business units more autonomy and accountability. While the divisional restructures, which are now completed, position us to focus our resources on the divisions and the projects that would generate the highest returns.

We are progressing a number of potential divestments, including our Construction division, CSP and our 13.4% equity stake in the Puhoi to Warkworth toll road. Today, we are also announcing that we're moving to undertake a strategic review of our Residential and Development division, which could result in divestment options being presented to us. We still have more work to do. Over the medium term, we will embed the new operating model and continue simplifying the portfolio. And as balance sheet targets are met, we will reset our dividend policy in order to deliver sustained shareholder returns.

Slide 8, operational highlights. To now look at some highlights from the year, which illustrate the underlying operational strength of the group. First, has grown its ready-mix market share to approximately 40% nationally and more than 50% in Auckland, a position that will be further strengthened when our new 882 Great South Road batching plant comes online in FY '26. Winstone Wallboard's Tauriko plant has consistently achieved A-grade recovery yields above our 95% target. And Waipapa Pine is now operating at full capacity and is demonstrating the benefits of vertical integration with place makers. These achievements demonstrate that despite market challenges, we are holding operational momentum.

Slide 9, progress on legacy risks. In parallel with improving our day-to-day performance, FY has been closing out historical legacy issues that have consumed management attention and balance sheet capacity. While some process are ongoing, during FY '25, we have materially reduced the number and scale of legacy risks, allowing us to focus more fully on the future. At NZICC, construction works are effectively complete. Acceptance testing and compliance processes are well underway with client handover expected during calendar year 2025. We intend to vigorously defend ourselves against SkyCity's legal proceedings and are confident in the position that we hold. And court proceedings against the roofing subcontractors on NZICC are nearly complete with judgment expected in the second half of FY '26. No benefit has been assumed for this.

On the Western Australia pipe matters, the industry response has made meaningful progress and the remediation work of the around 40 participating builders is starting to build momentum. As at 30th of June, 996 ceiling pipe replacements were complete, 55 homes had been fully remediated and over 2,000 homes had leak detector units installed. Costs remain consistent with our provision estimates.

For the Puhoi to Warkworth project, full works completion was approved in May 2024, and we've now settled our COVID-related claims with NZTA and the weather-related in landscape events with insurers.

Slide 10. Moving to Slide 11, divisional performance. There are a lot of numbers on this page, so I won't talk to this slide as I will be covering the divisions individually later in the presentation, but it should be a useful dashboard going forward and also 1 that will get smaller as our divisional structure simplifies. The number of red arrows highlight just how widespread and difficult the current stage of the cycle is for the building and construction industry.

Moving to Slide 12, Building Products. The Building Products division was impacted by cost inflation, softer residential demand and lower volumes, but key business units still maintain high operational performance. EBIT for Winstone Wallboards held up well with tight pricing controls and a well-executed plant production ramp-up. Laminex New Zealand maintained resilient sales in Melteca and particleboard and Comfortech saw solid demand for Pink Batts and PinkFit though challenged by higher energy costs and competitive import pricing.

Moving to Slide 13, concrete. Concrete delivered a resilient result given the market backdrop and Golden Bay MVAC breakdown. Golden Bay's EBIT was impacted by both logistics challenges and lower pricing, but asset reliability remained high and cost control was strong. Winstone Aggregates delivered a stable performance despite weather and project disruptions. First was able to make market share gains with demand from the Auckland Airport expansion and other major infrastructure projects, providing solid volume support in the second half.

Moving to Slide 14, distribution. Distribution delivered a disappointing result with a general market decline in historic loss in share impacting volumes, while intense price competition has compressed margins. Frame and Truss volumes did see positive momentum, rising nearly 5% on last year, and PlaceMakers and Mico maintained strong customer engagement and service levels. By year-end, we had largely implemented an operating model adjustment and cost out program, which are aimed at footprint optimization, better cost efficiency and restoring margins in FY '26. Pleasingly, both PlaceMakers and Mico grew their market share in the latter half of the year.

Slide 15, Australia. Australia experienced mixed performance. Laminex Australia achieved strong growth in premium product categories, particularly the next-generation wood grains range. Fletcher Insulation delivered record monthly output and launched 16 new products. However, Iplex Australia and Stramit faced headwinds from declining activity in their respective markets and pricing pressure.

Slide 16, residential and development. F '25 saw the Residential and Development division navigate persistent demand headwinds, cautious buyer behavior and pricing pressures. Major milestones included the completion of Matai Springs in Canterbury and the launch of The Hill, in Auckland, which has achieved strong pricing for its flagship Belvedere apartments. Three Kings also reached a major transformation milestone with new housing, sports fields and roading network now opened. Lastly, the exit from Clever Core is now complete with over 50% of its staff redeployed into PlaceMakers new Frame and Truss plants.

Slide 17, Construction. The Construction division delivered a meaningful improvement in FY '25, driven by successful delivery of key projects, disciplined cost management and resolution of legacy issues. Higgins contributed material to margin growth and is meeting or exceeding NZTA KPIs, while Brian Perry Civil worked on critical infrastructure projects at both Auckland Airport and Seaview Wharf in Lower Hutt. Major projects continue to deliver the Eastern busway project with the critical Ra Hihi flyover 5 months ahead of schedule, and they also secured the Riverlink Alliance project in Lower Hutt during the year.

And just to recap on divisional changes on Slide 18. As many of you will recall, we announced in May FY '25 that from FY '26 onwards we will report under a simplified divisional structure. There will be 5 divisions: Light Building Products, Heavy Building Materials, Distribution, Residential and Development, and Construction. The new structure better reflects how we will operate today, focuses more accountability and increases transparency for investors. It also aligns our reporting more closely with how capital is allocated and performance is measured internally.

Now I'll hand over to Will Wright and ask Will to make some comments.

Thank you, Andrew, and good morning, everyone. It's been a year of significant challenge and change. While market conditions remain tough, we've taken decisive action to reset the business, strengthen our balance sheet and position ourselves for long-term performance.

Moving to Slide 20, let me begin with some updates to our reporting framework. These changes improve clarity and comparability between periods and better reflect how we manage the business. This year, we've enhanced our segment reporting to provide greater transparency. You'll see clearer breakdowns across EBIT and cash by segment and revenue, and this can be found on Note 2.2 of the annual accounts. We've also moved to align our cash flow presentation with IFRS 18, providing additional detail on operating, investing and financing activities. In particular, we are now clearer on where interest paid, interest received and dividends received fall within the cash flow statement.

Turning to the income statement. Revenue for the year was $6.99 billion, down 9% from FY '24 with the largest decline in the Residential and Development division, which was down 30% from FY '24. Gross margin held relatively steady at $1.95 billion, supported by cost-out initiatives, including changes to shift patterns and procurement savings. The results benefited from a total of $200 million in gross cost-out initiatives, including a net $75 million reduction in SG&A and warehouse and distribution expenses year-on-year.

There was also a series of negative impacts above the EBIT line, which will not continue into FY '26. These included the settlement of the historic P2W claim with NZTA for $16.4 million less than previously recognized, $9 million in losses relating to the Clever Core panelization facility, and $6 million of costs relating to the MVAC breakdown. Significant items from continued operations totaled $644 million, primarily driven by impairments, restructuring costs and legacy project provisions. These are covered in more detail on Slide 32.

Turning to Slide 22. This waterfall chart illustrates the key drivers of EBIT movement year-on-year. As you can see, while cost initiatives delivered meaningful savings, they were not enough to fully offset the impact of lower volumes and cost inflation. The key driver of EBIT decline was volume contraction. In our manufacturing businesses, this was most pronounced in Laminex Australia and Humes, whose volumes were down 10.6% and 15.1%, respectively, in the June quarter relative to 12 months earlier on a rolling 12-month basis. And similarly, our steel businesses contracted between 10% and 15% on a rolling 12-month basis. There were some positive signs with Iplex New Zealand seeing improved volumes off the back of strong rural sales and PlaceMakers' Frame and Truss volumes improving over the last 6 months due to improving market share.

Balance sheet strength was improved by the capital raise, but we have more work to do. The normalization of working capital is ongoing. However, we saw less volatility at 30 June than in prior years. Net debt fell to $999 million, down from $1.77 billion with the proceeds from the equity raise used to repay $680 million of debt. We remain above our target net debt range of $400 million to $900 million. However, we have several levers to reduce debt over time and move towards our target range.

Firstly, shareholder distributions, we will use retained earnings to pay down debt. The dividend will remain suspended until we reach the lower half of our target range. Secondly, our ongoing optimization of capital expenditure, ensuring it is rightsized and not based on peak volume assumptions. We continue to review projects from across the portfolio for lower cost solutions or better phasing of expenditure. Thirdly, land. We're actively managing our portfolio of sites to release capital from underutilized or inefficient sites. This includes not only our manufacturing and distribution sites, but also our land bank within the Residential and Development division. And lastly, as Andrew has discussed, we're pursuing strategic divestments.

Operating cash flow was $501 million, down from $588 million in FY '24, largely due to lower earnings. However, the impact of this was partially offset by reduction in legacy construction cash outflows and reduced cash flows relating to significant items.

Investing cash flow improved significantly year-on-year, even as adding back the impact from divestments of Tradelink and the 50% share of Construction Fiji. Net outflows of $61 million compared to $398 million last year, this reflected a strong focus on disciplined capital allocation, including the scaling back of a number of projects and/or improved phasing of those projects through time.

On Slide 25, you can find a breakdown of our central costs. As discussed at Investor Day, we will provide greater transparency on the quantum and nature of corporate costs moving forward. We see corporate overhead as a key medium-term opportunity for us to remove structural cost from the business. As signaled at Investor Day, we have taken approximately $30 million of structural central costs out of the business late in FY '25. This will flow into FY '26. However, much of the central costs relate to longer-term contracts and licenses that will take longer to unwind.

Working capital is an area where we see significant opportunity for improvement. While we've traditionally focused on year-end cash flows, we're now shifting to a more proactive year-round approach. Our working capital cycle is too wide with too much volatility throughout the year. This leads to us having to carry greater levels of headroom in our banking facilities. And this ultimately comes at a cost. FY '25 year-end removed the volatility that has been by design. For example, we ensured all of our suppliers were paid in June. The Residential and Construction divisions have also been large drivers of near volatility. In many ways, this cycle is tied to the industries in which they operate, and this will be harder to address in the short term.

Moving to Slide 27. In FY '25, we invested $313 million in CapEx and investments, down from the $420 million spent in FY '24 as we continue to focus on the scale and phasing of expenditure. $5 million of investments relates to contributions into construction JVs and the final purchase price adjustments on Waipapa Pine. $16 million was spent on stripping costs in Winstone Aggregates, which are capitalized into stock and amortized as the resource is sold. Other growth CapEx relates predominantly to the new first batching plant at 882 Great South Road and the new PlaceMakers Frame and Truss plant. The OSB plant under construction in Taupo is progressing well and remains on track for initial production mid next year.

We continue to work closely with the business on the scaling and phasing of CapEx. At this early stage, we expect FY '26 CapEx to be between $320 million and $340 million. This includes $130 million on the OSB plant. Additionally, we expect to invest approximately $30 million in quarry stripping and land acquisitions and approximately $13 million on the construction of retirement village units.

Moving to Slide 29. We continue to manage our lease portfolio actively with a focus on reducing liabilities and ensuring lease impacts are reflected in divisional return on invested capital calculations. Lease liabilities totaled $1.5 billion at year-end and represented 57% of group gross debt. Land and Buildings accounted for the majority of leases with plants and machinery responsible for the remainder. The increase in lease liabilities year-on-year primarily related to 2 transactions: the sale and leaseback of Steel division land and buildings at Hunua and Laminex Australia entering into a new warehouse lease agreement in Victoria. We will be more active in managing lease liabilities moving forward with an understanding that these place debt-like obligations on the business.

We remain focused on reducing leverage and simplifying our funding mix. This will allow us to maintain investment-grade credit metrics and lower funding costs which currently average around 5.6% pre-line fees, down from 6.1% at the half year. The current group funding profile as at 30 June 2025, had circa $2.1 billion of total credit facilities, a reduction from $2.8 billion from a year earlier. During the first half of the financial year, the group repaid and canceled $569 million in borrowings. Additionally, in the second half of the year, we elected to redeem $80 million of capital notes that fell due in March.

We have $1.1 billion in liquidity, including $916 million in undrawn credit lines. The average maturity of our debt is 2.2 years. Pleasingly, Moody's reaffirmed our credit rating in July. Moving forward, our future capital structure will focus more on domestic senior funding sources and will likely include a mix of bank, wholesale and listed debt.

Slide 31 has a chart showing the components of the reduction in net debt from FY '24 to FY '25. The capital raise was the primary driver but we also saw $88 million in additional deleveraging from operating cash flows and assets. As discussed earlier, ongoing debt reduction remains a key focus.

Moving to Slide 32, significant items. There are significant items of $702 million for FY '25. In the first half of the financial year, we reported $251 million in significant items. This primarily related to the joint industry response in Western Australia, which will translate into cash over a number of years and the Tradelink disposal. The NZICC additional cost to complete announced in June added another $15 million. From the strategic review, there is $380 million in noncash items and $44 million in cash items. These cash items include onerous contract provisions for SAP licenses and the costs associated with cost out and site closures.

There is an additional $12 million in nonstrategic review items from the second half. This relates to legal costs incurred from legacy construction projects and the WA pipes matters. These numbers are substantial, but they reflect our commitment to reshaping the business for long-term success. The strategic review is not just about cost. It's about clarity, focus and positioning ourselves for sustainable growth.

I'll now hand back to Andrew.

Thank you, Will. Our success depends on our stakeholders, our people, our customers, our communities and our shareholders. In FY '25, we worked hard to strengthen these relationships, not just through a financial lens but through a consistent commitment to safety, environmental leadership and community engagement and we'd like to enlarge on these in the coming slides.

So moving to Slide 34. First, I want to acknowledge the tragic loss of Max, a team member who passed away following a crane incident in Vanuatu at the start of FY '26. This event and the 15 high-potential incidents we see each month reinforce that we can never be too comfortable. Safety remains our highest priority, and we continue to work towards our promise that everyone goes home safe every day. In FY '25, our TRIFR was 2.9%, the lowest ever recorded for Fletcher Building. Leaders completed over 19,000 critical control verifications and 25,000 leader walks. We were proud to be named Safety Leader of the Year by the Australian Institute of Health and Safety and who have been finalists in 5 categories at the National SafeGuard Awards.

Amongst the many initiatives focusing on operating more safely while outstanding action is the piloting of AI technologies to improve dynamic exclusion zones around mobile plant with PlaceMakers and EasySteel achieving significant reductions in breach rates.

Our people. Our people are at the heart of Fletcher Building. In FY '25, we provided 45 welfare grants, supported diversity initiatives such as Girls in High Vis and women in construction and celebrated the achievement of our Whakatupu graduates. We also launched the Sonder app across New Zealand businesses, doubling the number of employees accessing 24/7 medical, safety and mental health support.

Moving to Slide 36, our environment. We have reduced scope 1 and 2 carbon emissions by 24% compared to FY '18 with 78% of our revenue now coming from sustainably certified products. Initiatives such as Plasterboard recycling with local councils, coal substitution at Golden Bay and renewable energy generation in Australia demonstrate our commitment to supporting the environment and leading in sustainable building practices.

Our community. We are proud to support the communities we operate in. Across our business units, there are a wide range of grassroots sponsorships, donations and volunteering initiatives that can't be encompassed on a single page, but we've included some examples here where our teams have helped make a difference in their local communities.

Slide 38 and 39, our customers. We are proud of the products and people that help our customers build New Zealand and Australia's future. Again, these are just a snapshot of the work we do every day. At Auckland Airport, Firth and Brian Perry Civil completed their largest ever concrete pour. The NZICC will be a meaningful asset for both Auckland and New Zealand, bringing large numbers of convention attendees from 2026. Humes and Iplex supported the White Kainga Ora link road project securing long-time water and power infrastructure in Eastern Porirua. At Christchurch Stadium, we supplied the full spectrum of GIB products.

Iplex supplies modular form maintenance holes to new Western Sydney International Airport. And at the Te Waka Aorangi Child Wellness Centre, Laminex products were used to create durable, high-performance spaces for children with complex needs. These projects reflect the strength of our customer partnerships and the quality of our products.

Now a few words about the outlook going forward. Slide 41, where in the New Zealand cycle are we? Looking ahead in New Zealand, we expect a prolonged period of subdued demand in the residential and commercial construction markets. Building merchant sales remain a reliable proxy for the sector activity and our current data shows nominal sales have fallen across the wider merchant sector tracking below prior year levels, even before adjusting for inflation. This weakness has persisted over the past 18 months with monthly rolling 12-month figures well off the peak of the last cycle. The softness is broad-based affecting both residential and nonresidential segments. We are planning on the assumption that these lower levels of activity will continue through FY '26. So our operating model, cost structure and capital plans have been set with this conservative view in mind, ensuring we remain resilient if the downturn endures while also positioning us to move quickly should demand recover.

And Slide 42, where in the Australian cycle are we? In Australia, we're seeing early signs that gap between completions and commencements is beginning to close. For total dwellings, approvals and commencements are starting to align, indicating a potential stabilization in the pipeline. New house activity, however, remains slower to respond with commencement still lagging approvals. Market conditions remain mixed, while some segments show resilience, others continue to face headwinds from interest rates, labor constraints and elevated input costs. Against this backdrop, we maintain a cautious outlook and are focused on driving operational efficiency and product-led growth across our Australian businesses.

So moving on to the outlook. As we look ahead to FY '26, the operating environment remains challenging, and our plans reflect that reality. In New Zealand, we expect volumes to remain low and demand subdued. While in Australia, there are some early positive indicators, it is too soon to say whether they will translate into materially higher activity or volumes. We will continue to execute our cost reduction initiatives, which will provide important support to profitability in the face of these volume headwinds. These are not just short-term measures, they're designed to structurally improve our cost base, giving us lasting efficiency gains.

Our portfolio simplification work is progressing with divestments and strategic reviews underway. While these will strengthen our balance sheet, the full cash flow and cost out benefits are more likely to be realized in FY '27.

Slide 45, conclusion. As we close, I want to leave you with 5 key messages. We have taken immediate action. We have renewed our focus on our operating performance and customer needs. We are on track with net debt and have clear priorities for FY '26. While the New Zealand and Australian markets are likely to remain weak in FY '26, our focus is for disciplined actionable execution, maintaining cost discipline, protecting margins, delivering operational excellence and positioning the business to accelerate when market conditions improve.

Thank you for your time, and we're happy to take any questions you might have, remembering that we would like to restrict it to 2 per person.

[Operator Instructions] Your first question today comes from Kieran Carling with Craigs Investment Partners.

Andrew, well, thanks for the presentation. First question is just around the outlook statement where you've said the construction sale process and residential strategic review unlikely to result in any cash flow or cost benefits until '27. Can you just elaborate on that point? And talk us through why the construction sale process could take that long, given the inbound inquiry seem to be quite strong?

Look, it's a very complex transaction that we have to go through. So first of all, we need to engage with parties who are showing interest. And secondly, there is a lot of details that have gone through here in due diligence and so on. So I think it's quite realistic to assume that the timetable is going to push out somewhat.

Okay. And is it fair to assume that you're more looking down the path of divestment for the residential business as opposed to more of a JV model?

So it's -- we don't know the answer to that yet. So we're carrying out a strategic review. The reason we're undergoing this is because -- as we've said, the aim for the business going forward is to be the manufacturing distributor of building materials and products, and patently, residential and development doesn't fit within that model. So what we're doing is just trying to find out what options we have for the business going forward. And that, again, could be quite a complex exercise and take a period of time.

Your next question comes from Rohan Koreman-Smit with Forsyth Barr.

Thanks for the additional color in the presentation and annual reports, very helpful. Just on your outlook slide as well. The third bullet down, you talked about cost initiatives continuing and will help support profitability within operating leverage impacted by current run rates. If you add up all the kind of things that you've done so far, Aussie divisional restructure, Clever Core gone, there's the cement issue. There was a subsidiary closure in Laminex, Puhoi to Warkworth. That gets still a pretty decent number. And I guess you're expecting all of that kind of to be offset by, I guess, lower exit run rates from this year than on average. And does that mean that you're kind of suggesting here that earnings will be broadly flat despite all the cost gains?

Yes. Look, it's still pretty early in the year for us to be making a call on year-end. The outlook and environment are still very uncertain. And so what we're doing, trying to do is focus on the things that we can control. And so we're taking cost out where we can. We're getting our businesses operating as efficiently as possible and pulling all the mitigants to make sure that we've got a strong balance sheet that will see us through the cycle as well.

And then maybe just on that balance sheet, net debt was a little bit lower than you suggested a couple of months ago. Can you just talk us through what other capital calls there are in FY '26, the remainder of the legacy projects, how much you expect to come out of WA land that you need to buy, et cetera. Just want to get an idea of the kind of other headwinds that there are there in terms of pulling that number down further?

Yes, sure. So we're still working through a lot of that. So we've given a good update in the appendix to the presentation on just the run rate on WA Pipes. And we expect that to continue to gain momentum. It had a slow start but we think that will continue to gain momentum. Construction legacy cash outflows are reducing through time. We've put some photos in the results presentation, which you can have a look at, which is all of what I would call a completed building at the convention center. There's not a road cone or piece of scaffolding and site. And so they will reduce as we go through the year.

We're still working through some of the residential land payments that are due. So as you can imagine, we have a number of commitments to purchase land that we're committed to in prior periods and also deferred settlement as well. So we still have some of The Hill, for example, to pay for in this financial year. We're still working through the exact timing of those payments and what can be deferred and what we can potentially move on, that will be well north of $150 million this year as well.

Your next question comes from Stephen Hudson with Macquarie Securities New Zealand.

Andrew and Will. Just a question on the Sig items. Can you give us the cash outflow that you're expecting for FY '26 from the provisioning that you made and to what extent you'd expect further provisioning to occur in '26 on Sig Items?

Yes, sure, Stephen. So I think of the restructuring cash costs, which were about $44 million, a large chunk of that relates to SAP licenses. And most of those don't actually hit the financials until FY '27, '28 and '29. So the cash component of that $44 million will flow predominantly in those years. There will be about 10 to 15 of those restructuring costs that flow in both the tail end of FY '25, a small amount and FY '26.

I'll just sneak in another 1 because I think that was 1 question. Just on consensus, I guess, there was an earlier question on whether or not a flat outlook looks a bit more realistic. The Street's got you at close to $450 million for next year and $547 million of EBIT the year after, so 42% increase over a 2-year period. Can you just give us a sense how realistic do you think that is as a management team?

Yes. Look, I think what we're seeing right now, Stephen, is a very challenging market. And so what we've undertaken to do is release our quarterly -- our volumes of our key products on a quarterly basis, and that should help to inform the market on a go-forward basis as to the situation as we see it. You would have seen in the June quarter that volumes continue to decline across a lot of our businesses. And where they didn't like in PlaceMakers Frame and Truss, it was really share gain and not market. And so I think we're still seeing a pretty tough market at the moment, and we're not seeing anything different in this quarter as it's tracking so far. But obviously, we'll provide that update in sort of early to mid-October. So pre-AGM, you'll have a pretty good read on where we see this year tracking as well.

Your next question comes from Dylan Adrian with JPMorgan.

Andrew, Will. Just on Building Products, how did margins shape up in that division on sort of an exit run rate basis? Because I know you called out an improvement as you exited the period, please?

Can you repeat your question? We didn't quite catch that.

Just on Building Products, how did margins shape up on sort of an exit run rate basis? Because I think you called out an improvement as you exited the period, as you exited FY '25?

Yes. Look, I think again, margin improvement is hard one in that business at the moment because you're seeing reductions in operating leverage, right? And so where we're seeing margin improvement, it's things like reductions in shift patterns, it is procurement savings and then also being really smart about our pricing as well. And so making sure that we're not offering unnecessary discounts, making sure that we're recovering our freight. And so it's a range of things that the team are doing. It's quite a different story across the different businesses as well. So margins are certainly not growing in all of the building products businesses, but we are seeing some positive momentum in some and some compression in others, and it's kind of a net benefit, I suppose.

Your next question comes from Ramoun Lazar with Jefferies.

I guess just a follow-on from the question earlier just around the expectations into '26. I guess second half EBIT was about $220 million, which includes more of those cost reductions through the June half. I guess to what extent do the remainder of the cost out annualized into the first half? How should we think about that? And then also, if you could just touch on the typical seasonality you think we should expect first half compared to second half, just given the timing of some of those residential developments.

Yes. Good question. So I think, look, the cost out wins are hard fought. So you were seeing we've got a net $75 million benefit in SG&A and warehouse and distribution, but you're constantly having to take cost out to fight inflation in this business. And inflation hasn't really gone away. We're continuing to see inflation pressure across the business. So we're continuing to take cost out. And in particular, we've got that $30 million of structural cost out that will flow into the business this year from the removal of corporate overheads, which I think is an important inflation mitigant and also will help operating leverage as the volumes come back.

In terms of first half, second half split, we generally see a second half waiting within this business on a historical basis. I think looking at the residential business and the construction business, they're probably the ones that have the most volatility on half-on-half earnings historically. And I think as we sit here today, we think both of those businesses will be second half weighted. The construction, just in terms of where their projects are at, they've got a number of projects starting in this first half, and you have to get quite away through those projects before you start to get certainty enough to recognize earnings. And so that will probably be in the second half for the Construction division.

And then in the residential business, it's more around the earthwork seasons and when you get completions of houses in New Zealand. And so that's why that tends to be a second half weighted business in Auckland, which is really the bulk of the residential business. And you can really only do earthworks between October and maybe April, maybe May, if it's a really sunny year. And so what that means is you tend to get all your sections at 1 point in time, you tend to be built on them and then deliver them into that second half of this year.

Okay. Got it. So just a point of clarification. So that you expect to hold on to the depressed volume environment, do you expect to hold on to those cost reductions that you've achieved today plus the $30 million given the comment on inflation? Or should we expect that there will be some offset from inflation as a result?

Yes, there will be some inflation, and I think we'll fight hard to find more cost to offset that inflation as well, right?

Next question comes from Grant Swanepoel with Jarden.

First question, a follow-up for lot of the others. If this year pans out the way you're expecting it and you do get this construction sales somewhere in what your invested value of $303 million, I think you put in your presentation today. It means that your balance sheet could come into that zone where you'd be at the bottom end or the bottom half of your debt range. Would the Board consider resuming dividends second half of the year if that did occur?

Yes. Sorry, Grant, I think I caught most of your questions. It's not -- most of your question, it's not a great line. But I think what we have said is we won't resume and we're in the bottom half of the net debt range. And then at the point in time where we're in that position, we will do a dividend policy review. And so we will go out and talk to shareholders about what they think is an appropriate capital return policy. And ultimately, any resumption of dividend is not Andrew and my decision, that's 1 for the Board. And so probably just leave it at that.

Okay. And just a quick 1 on metals contribution. You normally give that as a subset of building products. What was it for the full year was $7 million at the half year?

I couldn't catch that, Grant. Sorry, can you repeat?

The metals division or steel within Building Products, you don't seem to disclose that at this end period with $7 million at the half year, was it at the full year?

Yes, sure. Sorry, Grant. I will just -- make sure I give you the right number. Steel, so the second half was minus $6.5 million, and what was the old steel division.

There are no further questions at this time. I'll now hand back to Mr. Reding for closing remarks.

Well, I'd just like to say thank you all very much indeed for coming along today. And if you do have any other queries, don't hesitate to reach out to our comms team and we will endeavor to answer them. Thank you all very much.

That does conclude our conference for today. Thank you for participating. You may now disconnect.