Fletcher Building, the biggest company on the NZX 50 Index, posted a 4 per cent gain in full-year profit, saying strong underlying earnings growth was masked by the impact of a high kiwi dollar and one-time charges against assets sales.

Profit was $339 million, or 49.3 cents a share, in the year ended June 30, from $326m, or 47.6 cents, a year earlier, it said on Wednesday.

Sales fell 1 per cent to $8.4 billion, in line with a forecast from brokerage Forsyth Barr.

The shares slipped about 1 per cent to $9 after the results were released and have fallen 6.8 per cent this year.

The construction and building products company is benefiting from rising construction activity, including rebuilding work in Canterbury and demand for the company’s housing developments.

By contrast in Australia, conditions “remained mixed” in the latest year, with a pick-up in home building offset by flat commercial construction, less state government spending on infrastructure and weaker resource sector spending.

Fletcher is partway through its FBUnite programme to wring out cost savings and expects to lift earnings in 2015.

“We would have met the top end of our guidance range had the New Zealand dollar not strengthened the way it has over the past year,” said chief executive Mark Adamson.

Fletcher expects a continuation of strong activity levels in New Zealand in 2015, while in Australia it saw improvement in those businesses exposed to home building.

The company said the decline in revenue included $428m due to adverse foreign exchange movements, which more than offset a $312m gain in underlying sales growth. In local currency terms, sales rose 2 per cent in Australia and 5 per cent in the rest of the world.

Operating earnings before interest and tax rose 4 per cent to $592m and included $32m of charges on the sale of the company’s Pacific Steel facilities in Otahuhu, Auckland, its Fijian rolling mill and cement businesses and its Hudson Building Supplies unit in Australia to reflect the gap between sale proceeds and carrying values.

The company will pay a fully-imputed final dividend of 18 cents a share, up from 17 cents a year earlier.

By Jonathan Underhill