Fletcher Building chief executive Ross Taylor said the business is 'broadly stable' with trading conditions in the second half of the year. Photo: Fletcher Building

Construction supergroup forecasts operating earnings of up to $665m, the top end of its previous guidance range, after refusing to pay back wage subsidy.

A Fletcher Building share buy-back is to return $300 million to shareholders.

The diversified construction and building products firm said its finances were in a strong position and its debt levels low enough to enable the return of capital, with the on-market buyback regarded as the most effective method.

“We continue to make material progress on executing our strategy and achieving key financial targets,” chief executive Ross Taylor said.

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The company has been recovering from hefty losses and asset writedowns from several years ago, as it was caught by several large loss-making projects, and problems within the construction sector, which saw it sell several businesses and pay down debt.

It said it expected its operating earnings before large items of between $650m to $665m, the top end of its previous guidance range.

Taylor said business was “broadly stable” with trading conditions in the second half of the year much the same as the first half.

“Despite some supply chain constraints and input cost pressures, we continue to see good margin performance from the business,” Taylor said.

“Forward indicators for market activity are pointing to ongoing robust volumes in New Zealand and Australia, with our businesses focused on delivering above market growth and improved profitability in this environment.”

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