Building products group Boral has posted a 73 per cent jump in profit to $90 million on the back of a healthier construction industry.
The half year result to the end of December is in line with expectations. The company announced a fully franked dividend of 7 cents a share, up 40 per cent, to be paid March 24.
The strong profit was helped by dry weather in New South Wales and Queensland and improving construction demand in NSW and Western Australia.
Sales revenue was up 4 per cent to $2.87 billion.
The bottom line, net profit after tax, saw Boral with a loss of $26 million, mainly due to provisions for a gypsum joint venture with USG in the US.
CEO Mike Kane said:
Our focus on improving the underlying performance of Boral’s businesses through restructuring and portfolio realignment, together with the ongoing market recovery in the USA, improved housing activity in Australia and continued growth in Asia, will deliver benefits beyond the current financial year.”
Kane expected the underlying performance in each of Boral’s four divisions to improve in the second half of the financial year.
For the full financial year 2014, Boral expects:
- Construction Materials and Cement to deliver significantly improved underlying earnings, which will offset a significant reduction in Property earnings Building Products to deliver a small profit
- Boral Gypsum to deliver stronger underlying performance, but in the second half to be largely offset by integration costs of the joint venture with USG, which is expected to complete on February 28, 2014, and reported earnings from Gypsum will be impacted by the shift to a 50% equity interest upon formation of the joint venture
- Boral USA to break through to profitability in the fourth quarter of FY2014 assuming housing starts exceed an annualised run rate of 1.1 million for the fourth quarter and translate into improvements in single family starts and custom home builder activity