James Hardie (JHX) shares touched a record high yesterday after it revealed a sharp jump in interim profit and promised a higher dividend to shareholders.
Hardie shares jumped by up to 15.5% to an all time high of $12.07 during trading on the ASX yesterday.
The shares eased a touch in the afternoon but still ended 14.9% higher (or $1.56) at $12.
The sharp rise in the shares was helped by the performance in the overall market which had a good day on indications that the US Fed would not be rushing to relax its current $US85 billion a month spending program.
That was after the remarks from Janet Yellen, the nominated successor to Ben Bernanke as Fed chair, were released ahead of her appearance in Washington overnight.
James Hardie caught the wave of renewed market confidence after a couple of down days because it was always due to report its second quarter and interim figures yesterday.
Hardie shares have hit record highs as profit soars thanks to stronger sales from its European and US businesses.
Hardie will pay an interim dividend of 8c a share, up from 5c per share 12 months ago as it continues to ride the recovery in its key housing markets, especially the US.
The company revealed that it had more than doubled its half year profit thanks to stronger sales from its European and US businesses.
JHX made a net profit of $US194 million ($A208.5 million) in the six months to September 30, up from $A90.29 million ($US84 million) in the same period in 2012.
"The second quarter results for our US and European business reflect increased volumes and a 25 per cent increase in net sales revenue, capitalising on the continued improvement in US housing market conditions relative to last year," CEO Louis Gries said in yesterday’s statement.
James Hardie’s Asia Pacific business also increased sales, but the stronger US dollar hampered earnings growth.
The company’s net operating profit in the six months to September, which excludes items such as asbestos and legal liabilities, was $US108 million ($A116 million), up from $US83 million in the previous corresponding period.
James Hardie said it expects to make a full year operating profit, excluding asbestos liabilities, legal costs and tax adjustments, of between $US180 and $US195 million, up from $US141 million in the previous year.
Mr Gries said construction of new homes in Australia had improved, but was still weaker than the company would like.
"Detached homes, where we make most of our money, is up but not up near as much as medium density," he told analysts, according to AAP.
The renovation market was not as strong, but Mr Gries said he was not worried.
"That’s kind of unexplainable to me. I’m not concerned about the Australian market," he said.
"It looks to me like it’s going to be a good market."
An 11% fall in the Australian dollar between late March and the end of September also reduced the value of the company’s asbestos liabilities by $US90.4 million ($A97.17 million).
Chief financial officer Russell Chenu said the asbestos fund had paid $A72.8 million worth of claims during the half year, and the number of claims were above expectations.
