June 22 (Reuters) - Fletcher Building, New Zealand’s largest construction firm, announced on Friday the appointment of in-house director Bruce Hassall as its chairman effective Sept 1, replacing Ralph Norris.
Norris had announced his resignation in February after the firm reported a steeper-than-expected loss in the first half due to years of cost overruns at its commercial buildings unit.
This is the second top executive change at Fletcher. Former Chief Executive Mark Adamson announced his departure after Fletcher’s second lowering of its earnings guidance in July 2017. The company then appointed Ross Taylor in October to replace him.
Hassall, who has previously held the chief executive position at the New Zealand arm of audit firm PricewaterhouseCoopers, joined Fletcher as an independent director in March last year.
The firm also said on Friday that it plans to appoint another Australian director in the coming months after naming Dean Fradgley as its Australia division’s head on Thursday.
On Thursday, Fletcher shares rose after Taylor announced a consolidation of its Australian business into one division, and laid out a three-year turnaround plan. The stock has lost more than 10 percent since the company forecast further losses at its Buildings and Interiors unit in February - its fourth downgrade in less than a year.
The consolidation is expected to reduce annual overhead by NZ$30 million ($20.64 million), and the company maintained its full-year earnings before interest and tax forecast of NZ$680 million to NZ$720 million. The firm, however, projected a NZ$85 million to NZ$95 million restructuring charge to the fiscal 2018 results but no more charges from its loss-making commercial business unit.
Fletcher has been trying to regain investor confidence after it announced mounting losses at the commercial buildings unit, leading to a breach of its debt covenants and the firm reporting a steeper-than-expected loss for the first-half.
It has since launched and completed a NZ$1.25 billion debt refinancing plan and proposed the sale of its U.S. laminates business, Formica Group, and roofing tiles business in an attempt to concentrate on Australia and New Zealand operations. ($1 = 1.4535 New Zealand dollars) (Reporting by Susan Mathew in Bengaluru; editing by David Stamp and Cynthia Osterman)