Fletcher Building's plan to turn business around

The country's largest construction company Fletcher Building has revealed its five-year plan to turn the business around.

Multi-million dollar losses on constructions like the Sky City convention centre have seen the firm change tack to a simpler business model.

It's complex contracts that got Fletcher Building in trouble, so now they're getting back to basics. The company is digging itself out of a $1 billion hole in three stages.

"It's about stabilising the go-foward businesses, exiting the non-core business and continuing to focus on acting on inorganic and organic adjacencies to the core as they present themselves," says chief executive Ross Taylor.

"Done well, this should set us up for a solid FY20 and beyond that market growth in FY21."

So what does that actually mean?

Firstly, there's an executive team shake up. Fletcher will also sell Formica and the Roof Tile Group, and overheads will be slashed by $30 million a year.

However, the entire revamp will come at its own cost of up to $95 million.

"It looks a little expensive to us," says Salt Funds Management analyst Paul Harrison.

"But I think it's important with this business that they stabilise it, and that they improve the corporate culture. Inside, it must be really difficult working there at the moment."

Personnel have also taken a hit. Chairman Sir Ralph Norris resigned earlier this year, and about 90 jobs have been cut as part of the restructure.

But Friday will bring the announcement many analysts believe is integral to the success of the company: changes to the board.

It should be the final step towards restoring Fletcher's financial health.