Fulton Hogan in talks to buy assets from Masterton contractor Bruce Buchanan
By Paul McBeth
Sept. 16 (BusinessDesk) - Fulton Hogan, the closely held construction firm, is in talks with Bruce Buchanan to buy some of the Masterton-based contracting firm's assets, having built up a stronger balance sheet in the past year, paving the way for acquisitions.
Bruce Buchanan provides civil construction services, including roading, telecommunications cabling and water works, and is the biggest supplier of construction aggregates in Wairarapa. Fairfax Media yesterday reported the Masterton-based firm laid off 20 staff ahead of a planned shut down of its construction division, and was in talks to sell some assets.
"Fulton Hogan and Bruce Buchanan Limited are at an early stage of discussions with respect to the sale of some assets of BBL," a Fulton Hogan spokesman said in an emailed statement. "Until agreement is reached it is not appropriate for us to comment."
Christchurch-headquartered Fulton Hogan yesterday reported a 9.7 percent increase in annual profit as building activity in Christchurch and Auckland offset slower Australian work, and the company bolstered its balance sheet after completing an asset sale programme, and completing the buyback of former cornerstone investor Shell's shareholding.
Managing director Nick Miller told BusinessDesk yesterday the company had enough headroom "for the right opportunities," and had focused on organic growth in recent years.
Miller expects a steady year in 2016 for the New Zealand business, though beyond that a downturn in dairy prices will probably lead to a softer infrastructure market in the regions of the country.