Result of the week: Boral

John Murray

Perennial Value Management

Boral is a key holding for Perennial Value, having bought it recently when it was out-of-favour at around $5.20. Boral delivered a sound 9% increase in underlying December half year earnings of $149 million. The interim dividend was also up a very healthy 9% to 12 cents per share, fully franked.

 

This result was driven by a number of factors including a good result in Australia despite a rain-affected first quarter, strong USG JV earnings growth (50% JV with USG, a US-based global manufacturer and supplier of plasterboard) and Boral USA benefiting from strengthening US housing activity.  Domestically, the housing construction backlog and infrastructure activity are offsetting the fall in oil and gas construction activity.

 

Looking forward, the announced acquisition of US- based Headwaters is a significant turning point for Boral. It will bolster Boral’s exposure to US housing (annualised US housing starts in December 2016 of 1.2 million are still below the long-term average of 1.4 million) and infrastructure activity.  This increased diversification comes at a time when Boral’s future US profits may increase at a greater rate than Australian profits.   


2 topics

1 stock mentioned

John Murray
John Murray
Managing Director
Perennial Value Management

John Murray established Perennial Value in January 2000 and has 30 years industry experience. He is one of Australia’s most respected value investors and has built a stable team of investment professionals delivering consistently strong returns.

I would like to

Only to be used for sending genuine email enquiries to the Contributor. Livewire Markets Pty Ltd reserves its right to take any legal or other appropriate action in relation to misuse of this service.

Personal Information Collection Statement
Your personal information will be passed to the Contributor and/or its authorised service provider to assist the Contributor to contact you about your investment enquiry. They are required not to use your information for any other purpose. Our privacy policy explains how we store personal information and how you may access, correct or complain about the handling of personal information.

Comments

Sign In or Join Free to comment