Unfortunately for its long-suffering shareholders, the Fletcher Building Limited (Australia) (ASX: FBU) share price has been amongst the worst performers on the market again today.
At the time of writing the building materials company's shares have emerged from their trading halt and are down almost 7% to a 52-week low of $6.73.
This brings its year-to-date decline to approximately 35%.
What happened?
The company placed its shares in a trading halt yesterday whilst KPMG reviewed its two largest Building + Interiors (B+I) projects and the impact that this has on the B+I unit's performance and ultimately its full-year guidance for FY 2018.
Following the review, this morning the company advised that the final outcomes of the B+I projects are uncertain.
As a result, it has separated its guidance for the B+I business from the remainder of the company's earnings.
For FY 2018 management expects earnings before interest and tax (excluding the B+I business) to be between NZ$680 million to NZ$720 million. The B+I business is at this stage expected to post a loss of $160 million.
While this is an improvement on the NZ$292 million EBIT loss recorded by the B+I business in FY 2017, it is still a big disappointment for shareholders and will weigh heavily on its results.
The two major projects that have caused the B+I loss are the Justice Precinct in Christchurch and New Zealand International Convention Centre in Auckland.
Should you invest?
While the worst may arguably be over for the company now, I would suggest investors play it safe and wait for signs that the B+I business has returned to profit before making an investment.
Until then, investors might want to consider industry peers Boral Limited (ASX: BLD) and Adelaide Brighton Ltd (ASX: ABC) instead.
