Thursday 23rd March 2017
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Fletcher Building has named Michele Kernahan as chief executive of its troubled construction division, effective immediately, and said current boss Graham Darlow will retire at the end of the financial year.
Kernahan, who has held previous Fletcher executive roles at Laminex Australia, Golden Bay Cement and Fletcher EQR where she led the team managing the Christchurch rebuild, has an MBA from Canterbury University and has been through management and leadership programmes at the Wharton Business School, Stanford University Graduate School of Business and Harvard Business School, the Auckland-based company said in a statement.
Fletcher began a review of the construction division last November and this week surprised investors by cutting group full-year profit guidance by $110 million because of losses at a major construction project and an impairment against expected losses at a second contract. The company has overhauled its processes for bidding for work and seconded new managers into the construction business. The contracts were being run by the building and interiors business, within the construction division.
Fletcher has received generally favourable reports for its work on the Christchurch quake rebuild. Martin Weevers, EQC chairman, told a select committee in December 2015 that in its role as the sole manager of the home repair programme, Fletcher had "very clear rate cards" to contain costs.
Of the $2.7 billion the government spent on the programme, about $340 million went to Fletcher.
Darlow's departure ends a 29-year career with Fletcher. He joined the company in 1988 and has managed the construction division since November 2011.
Fletcher shares tumbled to a nine-month low of $8 following the downgrade on Monday. The stock has since clawed back some ground to close yesterday at $8.33.
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