Fletcher Building tells the ASX its chief executive Ross Taylor may be about to leave as the company contemplates issuing earnings guidance likely to 'materially vary' from current analysts' forecasts

Fletcher Building [FBU] has indicated that its chief executive Ross Taylor may be about to depart as the construction giant contemplates issuing earnings guidance likely to "materially vary" from current analysts' forecasts.

The Fletcher Building shares were put into a trading halt on Monday ahead of the release by the company of half year results on Wednesday morning (February 14).

Trading was halted on both the NZX and ASX after a request from Fletcher Building. However, the halt in Australia, which appeared to come later and after the Fletcher price had tanked by about 6% across the Tasman, included the release of much more information.

A letter from law firm Russell McVeagh, acting for Fletcher, said that the full Fletcher board was meeting on Tuesday to "consider a number of matters", including "potential provisions and impairments and the earnings forecast for the full year". There was also to be a board sub-committee meeting on Wednesday morning.

Fletcher will issue earnings guidance with its half year results "after all decisions are made at a board meeting and the board sub-committee meeting Wednesday morning".

"In addition it is possible that, given the matters to be considered at the board meeting, the CEO of [the company] will consider his position with [the company] with this to be announced when his decision is made," the letter says.

The letter also says that the Fletcher sub-committee will determine "the level of the interim dividend, or if no interim dividend will be paid".

All this latest activity follows on from a further $165 million in provisions made by the company in respect of work on Auckland's NZ International Convention Centre, which Fletcher was contracted to build in 2015, originally slated for 2019 completion, but which was badly damaged by fire in late 2019 and is still yet to be completed. 

Analysts from the Forsyth Barr investment services firm, who compiled the below chart, said Fletcher had now made about $420 million of provisions for NZICC in the past year.

And there's also ongoing speculation about Fletcher's involvement in a leaky pipe problem in West Australia, that Fletcher has to date strongly denied culpability for.

Taylor joined Fletcher in 2017, replacing Mark Adamson, who left amid hundreds-of-millions-of-dollars worth of writedowns by the company on big projects.

According to Fletcher Building annual reports, Taylor received $6.68 million in pay from the company in the financial year to June 2023 and $5.17 million the previous year. These figures include performance-related amounts that were earned in prior years.

Prior to joining Fletcher, Taylor, according to bio details published by Fletcher, had an "impressive career in construction, real estate, manufacturing and engineering sectors".

This included being CEO of UGL, an international engineering, services, construction and product manufacturing business, and prior to that Managing Director and CEO of Tenix, and before that various senior positions with Lend Lease.

According to the bio details he has "proven experience leading business turnarounds and improving performance and shareholder returns".

The Fletcher Building shares last traded at $4.16 and are down nearly 19% in the past 12 months. However, as stated higher up the article, there was a sudden slump in the price in Australia on Monday prior to trading being halted there and across the Tasman the Fletcher shares last traded at A$3.70, which at current rates of exchange converts to about NZ$3.94.

At time of writing, Taylor was still scheduled to present Fletcher's results on Wednesday morning.