Fletcher’s investors brace for more bad news at results briefing

An interest rate cut across the Tasman could offer some support for building materials providers like Fletcher Building.

Fletcher Building’s shareholders are bracing for more pain when the company reports its results on Wednesday as it announced it had a appointed a new chief executive.

There were fears on Tuesday that Fletcher would provide weak earnings numbers with no recovery in sight in the near term after trading since February with no permanent chief executive or chairman at the helm amid tough economic conditions.

Also thought to be on its agenda is a move to embark on a joint venture to develop some of its land bank, which could see funds through the door to relieve its debt burden.

In what was considered a surprise move, the company has opted for an external candidate, Andrew Reding, for the role of chief executive after acting chief executive Nick Traber was considered the leading candidate.

This was following what was said by sources to be a strong stint running Fletcher’s concrete division, a job he took after working at LafargeHolcim.

Mr Traber now departs back to his native Switzerland and Mr Reding’s appointment came after the company recently announced Will Wright as chief financial officer from New Zealand retirement villages company Summerset Group.

It is understood that Mr Reding was in the running to take the top job in 2006 but left after he missed out on the role to former Fletcher Building boss Jonathan Ling.

Mr Reding previously worked at Rank Group, the company of New Zealand billionaire Graeme Hart.

Judging by Fletcher’s share price on Tuesday, where shares closed down almost 2 per cent to $3.12, Mr Reding will have to prove himself to investors he is the man for the job following a number of profit downgrades and writedowns for the Australia and New Zealand building materials provider under previous management. Mr Hart previously called on the services of Credit Suisse, and ex Credit Suisse industrials banker Stephen Pickles now works for Jarden, which perhaps could see it well placed to pick up a defence mandate.

Meanwhile, those hoping for news on the Iplex liabilities at Wednesday’s briefing are likely to be disappointed, with the talk being it will be too early to provide any clearer guidance.

Mr Reding will earn $NZ1.45m ($1.32m) per annum as a base salary plus short-term and long-term incentives that are each worth up to 150 per cent of the base salary.