A giant Australian plumbing supply retailer is on the chopping block after its parent company’s financial results tanked.
New Zealand building company Fletcher Building, which owns the Tradelink retail plumbing supplies business, has revealed the subsidiary is up for sale.
Fletcher made the announcement today, when it released its financial results for the six months to December 31.
For the six-month period its total revenue only fell one per cent compared the same time last year, coming in at NZ$4.24 billion (A$3.98 billion) but it posted a net loss after tax of NZ$120 million (A$113 million), down from a net profit after tax of NZ$92 million (A$86 million) in the second half of 2022.
Fletcher Building CEO Ross Taylor said one of the factors behind the loss was Tradelink, with “disappointing results” from the subsidiary leading Fletcher to write down the value of the plumbing supplier by NZ$122 million (A$115 million) and put the business up for sale.
“We have concluded that while we believe there is a compelling opportunity for Tradelink, further ownership of the business is not in line with the strategic objectives of Fletcher Building,” he said.
“Consequently, we intend to commence a divestment process for Tradelink shortly.”
Tradelink is Australia’s oldest plumbing supply retailer, having opened more than 150 years ago.
It has more than 100 showrooms and 230 branches across Australia.
Fletcher took ownership of the plumbing supplies and bathroom renovations retailer when it bought Tradelink’s parent, Australian building supplies company Crane Group in 2011.
Five years ago Mr Taylor was talking up the future of the Tradelink business, telling The Australian Financial Review it was “well on the road to recovery”.
Fletcher Building is listed on both the New Zealand Stock Exchange and the Australian Securities Exchange.
Aside from the write down on Tradelink, it blamed weakness in NZ residential building and a cost blow out in its New Zealand International Convention Centre build for the poor result.
The results have also taken a toll on key personnel with Mr Taylor to leave the business by October, along with chairman Bruce Hassall.
