The Boral Limited (ASX: BLD) share price has underperformed the broad ASX indices lately.
Whereas the S&P/ASX 200 index (ASX: XJO) has slipped 3% into the red over the last month, Boral shares are down 10% over the same period.
In fact, the Boral share price has tanked by more than 17% since control of the company was passed over to Seven Group Holdings Ltd (ASX: SVW) back in July. Boral shares are currently trading at $6.04 — down 0.82% on the day.
There’s a lot of moving parts here, so let’s investigate a little further.
What’s happened since Seven took over?
Since Seven gained control of the company back in July, it hasn’t been a nice ride for the Boral share price.
Seven Group ended the takeover bid with 69.5% of Boral’s shares and therefore obtained majority voting rights for the company.
The takeover was a saga in itself. But perhaps what capped it off for investors was the appointment of Seven Group’s CEO, Ryan Stokes, as chair of Boral’s board, immediately after the takeover bid was finalised.
Seven’s chief financial officer Richard Richards was also appointed to Boral’s board, and the former chair, Kathryn Fagg, has stepped aside.
Since this announcement, the Boral share price has come off a high of $7.34 on 29 July. Shares are currently trading at $6.04 apiece — that’s a fall of more than 17%.
Perhaps not helping Boral’s situation is its lacklustre FY21 results that were released last month. In its report, Boral recognised a 6% year-on-year decrease in revenue to $2.9 billion.
It also stated it will see a headwind of around $50 million next quarter as a result of lockdowns. This was compounded by management’s decision to withhold the final FY21 dividend.
As a result of its recent underperformance, Boral’s shares have been removed from the ASX 100 index, following S&P Dow Jones Indices’ rebalancing of ASX indices this quarter.
Some might argue that Seven’s takeover manoeuvre hasn’t benefitted Boral shareholders in the short term – but Seven Group’s share price has also dropped 16% off highs of $24 in August.
Boral share price snapshot
Despite its recent underperformance, it’s not all doom and gloom for Boral shares.
The Boral share price has climbed 22% this year to date and has gained 45% over the past 12 months.
These results have outpaced the broad index’s return of around 25% over the past year.