Boral (ASX:BLD) share price takes off amid $3b return of capital

Boral shareholders are in for a big pay day…

| More on:
a man wearing a hard hat, a shirt and a tie, lays a brick on a wall he is building with a look of happy joy on his face.

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Key points

  • The Boral share price is charging higher on Tuesday following the announcement of its capital return
  • Shareholders can expect to receive a $2.65 per share capital reduction and an unfranked 7 cents per share dividend
  • Investors will need to be on the Boral share register by 7 February to receive the payments

The Boral Limited (ASX: BLD) share price is galloping ahead this morning following its announcement of a multibillion-dollar capital return for shareholders.

In early morning trade, shares in the materials company are up 6.8% from their previous close to $6.27. Investors are jumping on the Boral bandwagon as it readies to return $3 billion to its shareholders.

Let's take a closer look at the details announced today.

Three billion reasons why the Boral share price is higher today

The Boral share price is pushing higher today amid its decision to shower its shareholders in a massive capital return.

According to the company's announcement, the company will return $3 billion of surplus capital to shareholders. This will be comprised of a $2.65 per share capital reduction and an unfranked 7 cents per share dividend.

Notably, this follows the 2021 annual general meeting where shareholders approved the share capital reduction.

Additionally, the company has worked with the Australian Taxation Office (ATO) to establish the tax implications. It has been confirmed that no part of the capital reduction will be treated as a dividend.

The ATO is expected to issue a class ruling regarding Boral's capital reduction. This should contain details on how shareholders will need to treat the return.

Moreover, the capital return is a product of Boral's divestment and sale of its North American building products business. In addition, the capital reduction is on top of a previously announced on-market share buy-back program.

Management commentary

A flurry of various forms of capital return has pushed the Boral share price higher in the past year with the company selling off parts of its business. Boral CEO and managing director Zlatko Todorcevski commented:

In the 12 months following the sale of USG Boral and culminating with the announced sale of Boral's North American Fly Ash business, we have completed an extensive portfolio realignment, unlocking significant value for our shareholders. Our reshaped portfolio allows us to focus on strengthening the performance and profitability of our core Australian construction materials business.

What's next?

Lastly, it is worth highlighting the key dates for the capital return to take place.

Tomorrow, 2 February 2022, will be the effective date for which the share capital reduction is carried out. Following that, 4 February will see the first day of trading for shares 'ex return of capital'.

Importantly, Monday 7 February will be the record date for eligibility of the capital return. Shareholders will need to be on the share register by this date to be a part of the $3 billion bonanza.

Finally, Monday 14 February is the date shareholders will receive the return of capital and dividend.

The Boral share price is up more than 25% in the past 12-months.

Motley Fool contributor Mitchell Lawler has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on Share Market News

Industrials written in orange.
Share Market News

Why did ASX 200 industrial shares lead the market last week?

ASX 200 industrial stocks led the market with a 2.93% rise, while the benchmark index lifted 0.52%.

Read more »

A man looks surprised as a woman whispers in his ear.
Broker Notes

These ASX 200 shares could rise 20% to 40%

Analysts are tipping these shares to deliver market-beating returns over the next 12 months.

Read more »

a young woman looks happily at her phone in one hand with a selection of shopping bags in her other hand.
Share Market News

This leading fundie just bought more Zip shares. Here's why

Are Zip shares worth a closer look following institutional backing?

Read more »

Fancy font saying top ten surrounded by gold leaf set against a dark background of glittering stars.
Share Gainers

Here are the top 10 ASX 200 shares today

It was a spectacular end to the trading week for the ASX today.

Read more »

A piggy bank on the cloud in the blue sky symbolising a record high share price.
52-Week Highs

These 13 ASX 200 shares just hit new 52-week highs

These shares had a fine send-off to the weekend this Friday.

Read more »

Overjoyed man celebrating success with yes gesture after getting some good news on mobile.
Broker Notes

Brokers name 3 ASX shares to buy today

Here's why brokers are feeling bullish about these three shares this week.

Read more »

A young man clasps his hand to his head with his eyes closed and a pained expression on his face as he clasps a laptop computer in front of him, seemingly learning of bad news or a poor investment.
Share Fallers

Why AMP, Civmec, Cochlear, and LGI shares are falling today

These shares are ending the week in the red. But why?

Read more »

Three people jumping cheerfully in clear sunny weather.
Share Gainers

These 3 ASX 200 stocks are shooting the lights out this week. Own any?

These ASX 200 shares have soared 11% to almost 23% this week. But why?

Read more »