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James Hardie Industries Plc: TWO special dividends and a buyback

Building materials manufacturer James Hardie Industries Plc (ASX: JHX) will pay shareholders not one but TWO special dividends alongside a strong second-half dividend, after more than doubling its full-year net profit.

Despite revenue rising just 13% to US$1,494 million, net profit doubled from $45.5 million to $99.5 million for the twelve months to end of March 2014. James Hardie also announced two special dividends to go with the second half dividend of 32 US cents. The first special dividend of 20 US cents will be paid on August 8, while a 28 US cent (125 year anniversary) special dividend will be paid to shareholders on May 30. All three dividends are unfranked.

In another move that will please shareholders, James Hardie has also announced a share buyback of up to 22.2 million shares, after buying back 2.6 million shares over the previous year.

A recovering US housing construction market and strong growth in Europe have deliver a 19% increase in sales, including 22% in the fourth quarter. In the US, single family housing starts rose 9% above the previous year.

Locally, net sales increased, as approvals for detached houses climbed 16% in the twelve months ended March 31, 2014. But the outlook appears mixed.

Yesterday, cement and lime producer Adelaide Brighton Ltd (ASX: ABC) gave a gloomy outlook, with 2014 net profit expected to be in line with 2013’s $151 million. Although it must be said that the company has less exposure to the recovering East coast housing market and more exposure to Western Australia’s resources sector. Investors should probably not read much into that for fellow building materials companies Boral Limited (ASX: BLD) and CSR Limited (ASX: CSR), but for a better bet, here’s an idea we think you’ll like…

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Motley Fool writer/analyst Mike King doesn't own shares in any companies mentioned. You can follow Mike on Twitter @TMFKinga

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