Shareholders in building products company James Hardie (JHX) have shared in the company’s enjoyment of the better conditions in its major housing markets around the world.
There are multiple dividends and an extension of an existing share buyback in the wake of the improved result for the year to March 31.
The news sent the company’s shares up more than 5% to $14.47.
The rebound in the US and European economies and the associated building sectors worked their magic on the annual results of James Hardie for the year to March 31.
Australia played a smaller part for the Hardie rebound in the latest financial year.
The company yesterday told the ASX that net profit for the fourth quarter and the full financial year rose strongly.
As a result, shareholders will get two special dividends, as well as the final dividend, while Hardie will buy back another 5% of the shares, on top of the existing 5% buyback.
Hardie directors said that for the March quarter, it had a net operating profit of US$45.3 million. That was after excluding asbestos, asset impairments, Australian Securities and Investments Commission (“ASIC”) expenses, New Zealand product liability and tax adjustments, for the quarter ended 31 March 2014, compared to the prior corresponding quarter’s US$30.7 million.
Hardie said its net operating loss for the quarter including asbestos costs, asset impairments, ASIC expenses, New Zealand product liability and tax adjustments more than doubled to US$186.8 million in the year to March, compared to a loss of US$69.5 million in 2012-13.
"For the full year, net operating profit excluding asbestos, asset impairments, ASIC expenses, New Zealand product liability and tax adjustments increased to US$197.2 million, compared to US$140.8 million in the prior year," the company said in yesterday’s announcement.
That left a net operating profit of $US99.5 million for the full year (including asbestos, asset impairments, ASIC expenses, New Zealand product liability and tax adjustments), more than double the US$45.5 million earned in 2012-13.
JHX 1Y – Dividend boost as James Hardie lifts profit
On an earnings before interest and tax basis (EBIT), Hardie said EBIT for the full year increased from US$29.5 million in the prior year to US$53.1 million. EBIT excluding asbestos, asset impairments, ASIC expenses and New Zealand product liability increased 40% to US$252.8 million compared to US$181.0 million in the prior year.
Hardie will pay shareholders an ordinary second-half dividend of US32c a share and a special dividend of US20c a share.
As previously announced the group will pay a 125-year anniversary dividend of US28c a share.
Combined with the final dividend of US8c, James Hardie’s total payouts for the year come to US88c a share.
All of the dividends will be unfranked for Australian tax purposes. Hardie also announced plans to buy back another 5% of shares on issue over the next 12 months, adding to the 5 per cent it purchased in the last year.
For the full year, the company’s US revenues jumped 19% to $US1.1 billion due to strong rebound in new home construction activity and growth in the repair and remodelling markets renovations. In Australia Hardie said net sales in the March quarter jumped 22% in US dollar terms.
"To further capitalise on the projected growth in the US housing market, and our anticipated market share growth across all of our businesses, the company intends to increase its levels of capital expenditure to an average of approximately $US200 million per year over the next three years," James Hardie chief executive Louis Gries said in yesterday’s statement.
But sales fell 2% in Asia Pacific to $US88.2 million and the company said any improvement would be reliant on growth in the detached housing market in Australia.
"Net sales from the Australian business are expected to track in line with any growth in the detached housing market and be impacted by any positive or negative movement in the repair and remodel market," the company said in a statement to the Australian Securities Exchange.
Meanwhile a separate report on the company’s compensation fund (prepared by KPMG) said there had been a 12% rise in new cases to more than 600.
"The number of mesothelioma claims reported has shown a significant increase in the year. There have been 370 claims reported in 2013/14. This compares to 309 claims reported in 2012/13, 259 claims reported in 2011/12 and 268 claims reported in 2010/11.
"For non-mesothelioma claims (including workers compensation claims), there have been 238 claims reported in 2013/14 compared to 233 claims reported in 2012/13. In aggregate, claims reporting has been broadly in line with expectations (240 claims) for these disease types, albeit with some variation between disease types," the report said.
