Fletcher faces $11m charge on sale of Hudson distribution unit
Fletcher Building [NZX: FBU], New Zealand's largest listed company, faces an $11 million charge on the sale of its construction materials distribution business Hudson Building Supplies for $20 million to HTH Stores.
A conditional agreement to sell the Australian trade-focused timber and building supplies distributor has been reached with HTH, which is part of the Woolworths home improvement division, the Auckland-based company said in a statement. Fletcher expects to record an $11 million expense in the financial year ending June 30, "reflecting the difference between sale proceeds and asset carrying values together with transaction costs," it said.
Fletcher acquired Hudson when it took over the Crane Group in 2011, but has since determined the business is "not core to its future operations". Earlier this year the company described Australian conditions, which account for half its earnings, as "soft" amid sluggish economic growth across the Tasman impacts on building intentions and a high New Zealand dollar crimps export returns.
The sale needs Australian Competition and Consumer Commission clearance, which may take up to six months to complete.
Fletcher's NZX-listed shares fell 0.9 percent to a four-month low of $8.89.