The Fletcher Building Ltd (ASX: FBU) share price climbed 2% on the ASX yesterday after the New Zealand-based developer posted a $246 million million net profit after tax (NPAT) in its full-year results.
The strong result represents a significant turnaround in fortune for the Kiwi property group after delivering a $239 million net loss in FY18.
What were Fletcher's full-year highlights?
Fletcher increased its revenue by $97 million to $8.31 billion for the year ended 30 June 2019, while earning before interest and tax (EBIT) before significant items rocketed to $549 million after also being in the red last year.
Earnings per share came in at 28.8 cents per share (cps) for FY19, compared to negative 32.1 cps a year ago.
Fletcher Building CEO Ross Taylor said FY19 was an important "transition year" for the property group and hailed the result as the successful execution of the first year of its five-year strategy to refocus and grow the business.
Fletcher's core building products and distributions segments were strong revenue drivers throughout the year, while stabilisation in its construction division was another big driver in the return to the black.
Significantly, Fletcher sold off both Roof Tile Group and Formica during the year, with the later delivering NZ$1.2 billion to the company's balance sheet to consolidate its financial position.
This has allowed Fletcher to focus on its NZ$700 million to NZ$800 million debt reduction program, while also distributing NZ$300 million to its shareholders as it looks to reset its financial footing as part of the five-year plan.
Foolish takeaway
While Fletcher's full-year numbers were solid, shareholders will arguably feel just as much relief as excitement from the return to profitability.
Last year's soft earnings result hurt the Fletcher share price, and while it climbed higher on the back of yesterday's profitable result, it remains some 25% off its August 2018 mark of $5.95 per share.
I'm not looking to buy into the regional property and construction markets just at the minute, and am instead looking carefully at some non-cyclical options on the market such as Telstra Corporation Ltd (ASX: TLS).
