A spokesperson for Higgins has confirmed to the Times-Age that the nationwide civil construction business, which has a local presence in the region, has begun a “consultation process with a small number of teams” in response to “challenging market conditions”.
“Our priority is working with those potentially impacted, no decisions have been made, and we welcome feedback from those potentially impacted,” a Higgins spokesperson said in the written statement.
“We won’t be making any further comments during the consultation process.”
The announcement comes two days after Fletcher Building – Higgins’ parent company – cut its earnings guidance for the year from $540m-$640m to $500m-$530m.
Fletcher attributed the drop in earnings guidance to “challenging conditions in the company’s distribution division” and a weaker residential sector.
“Our immediate priorities are to optimise the performance of each of our businesses, close out legacy issues, and tightly manage risks to maximise our ability to deliver shareholder value,” acting chief executive Nick Traber said when the downgrade was announced.
“Our people are integral to achieving this,, and I would like to thank each of them for their ongoing efforts as we navigate the tougher market environment.”
The road construction and maintenance businesses Higgins Group Holdings Limited and Higgins Fiji were purchased by Fletcher Building for $315 million in 2016.
Higgins sits within Fletcher Buildings’ construction division, which last year accounted for 14 per cent [$1.325 billion] of Fletcher Buildings’ gross annual revenue, and has about 1600 employees nationally.
According to Fletcher’s 2023 annual report, Higgins had a “disappointing year owing to low margins on maintenance work and poor execution on a range of small construction projects”.
Higgins was also impacted by “significant and numerous weather events, resulting in lower levels of plant and labour recoveries”.
Fletcher is a share marketing company only interested in profit 📈. Why would they be aloud to purchase a major roading company 🤔 unless they could see 👀 big profits 📈 🤔. Our national roading authorities should never put a marketing campaign 🤔 for profit 📈 in charge 🤔.