The share price of leading building and construction materials supplier Boral Limited (ASX: BLD) has rallied 1.5% to $5.22 by lunchtime today. The gains are in stark contrast to the 1.3% thumping the S&P/ASX 200 (Index: ^AXJO) (ASX: XJO) has experienced.
Boral's rally is in response to the release of the group's interim profit results.
Here are the key points:
- Revenues fell 4% to $2.2 billion
- Underlying net profit after tax soared 23% to $137 million
- Underlying earnings per share leapt 28% to 18.2 cps
- Net debt was approximately $1 billion at balance date
- A fully franked interim dividend of 11 cents per share (cps) has been declared by the board. In comparison, the interim dividend last year was 8.5 cps. Boral's shares will trade ex-dividend on February 16 with payment due on March 11.
Outlook:
Boral's solid results for the six months ending December 31 were thanks to improved margins, stronger housing activity in the US and continued strength in Australia.
The Managing Director Mr Mike Kane made the following comments regarding the outlook for each of the group's divisions for the remainder of the financial year (FY)…
- Construction materials and cement are expected to deliver a marginal improvement in earnings compared with FY 2015
- Building products are also expected to deliver a marginal improvement year-on-year thanks to continued strength in the East Coast housing market
- Boral gypsum is expected to deliver further improvements thanks to strong activity in Australia coupled with solid cost and price discipline
- Boral USA is expected to further increase earnings due to increased housing activity.
Given the upbeat assessment provided by management, investor attention will no doubt now turn to Boral's peers Adelaide Brighton Ltd. (ASX: ABC), Brickworks Limited (ASX: BKW) and Fletcher Building Limited (Australia) (ASX: FBU) which are also due to report results this month.
