Boral’s latest results come after a takeover struggle with Seven Group Holdings
The post Boral (ASX:BLD) share price on watch as revenue falls appeared first on The Motley Fool Australia. –
Boral share price on watch as revenue falls
Some of the key takeaways from the 2021 financial year (FY21) result include:
Revenue from continuing operations down 6% to $2.92 billion
Earnings before interest and tax (EBIT) excluding property up 11% to $157 million
Underlying earnings per share (EPS) from total operations up 42% to 20.6 cents
Return on funds employed (ROFE) down 50 basis points (bps) to 8.3%
No final dividend declared
The Boral share price is one to watch in early trade following its latest update.
What happened in FY21 for Boral?
Boral noted challenging market conditions in FY21 after reporting a 3% decrease in Roads Highways Subdivisions & Bridges (RHS&B) revenue. There was also a 7% decrease in the company’s other engineering revenue during the year.
Boral reported 201,000 total housing starts in FY21, up 16% from the prior year. That included double digit percentage growth across NSW, Queensland, South Australia and Western Australia.
What did management say?
Boral CEO and Managing Director, Zlatko Todorcevski, commented on the Group’s progress during the year:
We have made substantial progress in our strategy to transform Boral into a stronger, better performing, more customer-focused organisation, with a core portfolio of businesses that deliver value throughout the cycle.
Our full-year FY2021 results reflect the mixed market conditions we are continuing to experience in Australia during the pandemic.
As we finished the last financial year there were encouraging signs of improving demand. However, the new financial year has started with early challenges as a result of pandemic-related lockdowns.
We expect that FY2022 market conditions will be mixed. Infrastructure activity, particularly road construction, is expected to improve slightly in the second half of FY2022 and moving into FY2023.
What’s next for Boral and its share price?
Uncertainty and “mixed” market conditions were a theme of today’s results. Boral said the impact of COVID disruptions in the first quarter of FY2022 may total around $50 million.
The Aussie building materials company is targeting FY2022 transformation benefits of $60 million to $75 million net of inflation, with capital expenditure of around $300 million.
The Boral share price has surged 37.8% in 2021 amid the ongoing takeover bid from Seven and is outpacing the S&P/ASX 200 Index (ASX: XJO) this year.
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Motley Fool contributor Ken Hall 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.