The Boral Ltd (ASX: BLD) share price is on watch today as it plans on reporting its FY21 earnings on Tuesday.
Boral shares have climbed into the green since January 1. As such, it's worthwhile investigating investors' reaction last time the company reported.
Let's peel back the layers to find out exactly what happened in the week when Boral reported its FY21 half year results back in February.
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What happened after Boral's last earnings report?
Boral recognised several tension points in its FY21 half-year earnings report, including:
- 8% year on year revenue decrease to $1.6 billion
- Boral North America also absorbed a 9% decline in revenue behind the year prior
- Net profit after tax (NPAT) of $156 million, which was flat compared to the same time last year
- No dividend payment for 1H 2021
- Free cash flow growth from $35 million to $333 million in 1H FY21, in line with its peers free cash flow growth
In addition to these points, Boral outlined uncertainties in the market going forward and expects further impacts from COVID-19.
Management also said the USG Boral and Meridian Brick divestments will be completed in FY21. Moreover, it had appointed a new CEO and CFO to its ranks in order to achieve its growth vision for the future.
What happened next?
In an unfortunate turn of events the Boral share price, investors failed to welcome the company's performance with open arms. Particularly the haircut to its FY21 dividend.
Boral reported its earnings on Tuesday 9 February and, by the Friday, Boral shares had sunk 8% into the red from Monday's close. On 9 February alone, shares in the construction materials company had sunk around 5%.
The downward pressure on the Boral share price was relatively short-lived, however.
To illustrate, there have been several external catalysts in Boral's growth engine since February that have pushed its shares back towards its all-time highs.
For instance, Seven Group Holdings Ltd (ASX: SVW) has been on the chase to acquire Boral since May this year.
Boral shareholders originally rejected the bid of $6.50 per share to acquire all remaining outstanding Boral shares. Seven then revised the offer to $7.30 per share, which was again rejected.
However, on 29 July, the conglomerate finished its takeover bid and now holds approximately 70% of Boral's voting power.
Moreover, Seven Group immediately appointed its CEO Ryan Stokes as chair of the Boral board.
It is reasonable to say the Boral share price sunk last earnings on the back of the company's lacklustre first-half performance.
Undoubtedly, Boral shareholders will be hoping for a different outcome on Tuesday and are seeking further clarity on the future of its dividend.
Boral share price snapshot
The Boral share price has climbed 36% into the green since January 1, extending the previous 12 months' gain of 84%.
Despite this, Boral shares are 9% in the red over the last month.
These results have outpaced the S&P/ASX 200 index (ASX: XJO)'s return of around 25% over the past year.
