Fletcher Building Limited (ASX: FBU), a company that manufactures and distributes building materials throughout New Zealand and Australia, has released its quarterly update on key product sales volumes for the second quarter of the 2026 financial year (Q2 FY26). Managing Director and Chief Executive Officer Andrew Reding noted that quarterly volumes showed a modest improvement compared with Q1 FY26, with some encouraging signs emerging across the portfolio. However, he cautioned that these gains are not yet sustained and are insufficient to offset the impact of earlier declines. Trading conditions remain competitive, with ongoing margin pressure and compression, especially in the Distribution division.
Light Building Products volumes are trending positively versus Q1 and generally remain in line with or above the prior corresponding period (pcp). Waipapa and Iplex NZ saw volume growth, up versus Q1 by 4.0% and 3.7% respectively, and versus pcp by 23.4% and 15.1% respectively. In Australia, volumes have generally improved relative to Q1 and are now broadly in line with pcp, with both Laminex AU and Fletcher Insulation delivering positive performance against Q1. Across the division, margins have remained relatively stable.
Heavy Building Materials has continued to experience volume contractions. Winstone Aggregates volumes declined 2.7% versus Q1 and 8.4% versus pcp, reflecting ongoing weak roading and project activity. Humes volumes were also down 7.6% and 6.1% on Q1 and pcp respectively. However, Firth and Golden Bay volumes are broadly in line with both Q1 and pcp. Steel volumes were mixed and overall marginally higher than Q1, but margins remain compressed.
Within the Distribution Division, PlaceMakers Frame & Truss volumes were marginally higher than pcp; however, margins remained compressed owing to highly competitive trading conditions. The Residential division took 135 residential and apartment units to profit in Q2, compared to 214 in Q2 FY25. Despite some broader economic indicators appearing to trend in a more positive direction, the company continues to believe that any meaningful recovery in volumes will not flow into its businesses until calendar year 2027.
