Distribution

The Distribution division reported operating earnings before unusual items of $17 million, down 11 percent on the previous corresponding period.

The trading environment continued to be challenging with sales down 10 percent over the same period last year.

A 10 percent cost reduction to the same period last year was achieved through reduced employee and facility costs. Further enhancements to delivery management improved freight cost recovery.

A working capital reduction of 9 percent assisted stronger cashflow performance.

The New Zealand building materials market has continued to be impacted by the low level of residential building consents, and more recently non-residential consent declines. However a pickup in activity in the second quarter was evident from a very weak first quarter.

The market continued to be highly competitive with most industry participants taking an aggressive stance on pricing to retain share. Pressure on PlaceMakers' core trade segment continues but its market share has been maintained.

In frame and truss manufacturing, improvements to the plant network, production scheduling, quality control and plant layout occurred over the period resulting in productivity gains.