Fletcher Building says they're not planning on hiring back staff made redundant due to Covid-19, despite making a better than expected profit.
This morning, the construction business provided an update on year-to-date trading for its 2021 financial year. It compared trading for the four months to October 31, with the same period last year.
Fletcher's said "group EBIT" (operating profit) before significant items was $227 million, up $80 million on the previous period.
Group revenues were just one per cent ahead of the comparative period, but the business said cash flow and balance sheet "remain strong" with net debt $388 million and liquidity $1.4 billion as at October 31.
Fletcher Building chief executive Ross Taylor told 1 NEWS it was "a positive surprise" that the market had been more resilient than expected.
He said it was "quite dramatic" with a full shut down of the business in May-June amid the Covid-19 pandemic.
"It was almost impossible you'd get to this place ... I would not have thought we'd be in this position if you'd asked me six months ago."
In May, Fletcher's said at least 1000 jobs would go in New Zealand and another 500 in Australia.
But today Taylor said they're not looking to bring those people back on with further risk due to Covid-19.
"We're sort of holding at the levels we are," he said.
"What we're cautious about is really giving our people certainty and when you look at the economic forecaster, and that's in central banks, they're still pointing to a tougher 2021 and FY2022.
"I'm very cautious that if we start adding people, actually I don't want to go back and have to do another round of redundancies. I'd much rather keep everyone calm."
Taylor said he'd keep an eye on how the markets are tracking next year then make calls when there's more certainty.
"It's really important because it is people's livelihoods you're talking about and you want people to feel comfortable and confident that their employment's there."
Earnings in the New Zealand Core were up 30 per cent, led by the concrete and building products divisions, Fletcher's said.
Residential and development earnings were materially higher due to strong house sales, while planned land development transactions remain on track for completion in the remainder of FY21.
Construction earnings were in line with the comparative period.
The company said, earnings in Australia increased as cost-out benefits offset the lower overall revenues, and corporate costs remain well-controlled and were slightly lower than the comparative period.
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