Building products group, Boral has lifted final payout two cents a share to 14 cents after revealing a sharp jump in annual profit on for the year to June.
Investors loved the results, sending the shares up more than 10% to $7.07.
The higher final dividend lifts total payout to shareholders for the year to 26.5 cents a share up 10% from 24 cents a year ago.
Boral reported a full-year net profit of $441 million, compared to $297 million the previous year, and slightly lower than the $448 million average forecast of five analysts from Thomson Reuters.
Net profit excluding significant items was up 38% to $473 million, from $343 million in 2016-17.
Revenue for the year to June 30 was up 33.7% at $5.87 billion.
“While our business is not immune to unfavourable weather impacts and operational disruptions, the full year results confirm that our transformation strategy is progressing well, and that Boral can deliver significant earnings with highly attractive margins,” CEO Mike Kane said in yesterday’s statement.
Full-year core earnings from Boral’s biggest segment, Australia, rose 15% and it expects “high single-digit” growth for this year as the public infrastructure boom continues.
Boral’s North America division delivered full-year earnings of $368 million, more than three times the $111 million recorded last year, mainly because of the purchase of the Headwaters company which produces ingredients for concrete.
Mr Kane said the first year delivered synergies of $US39 million, topping the initial $US30-$US35 million target.
“We have increased our initial year-four synergy target by 15 per cent to $US115 million, as a result,” he said in Wednesday’s statement to the ASX.
Mr Kane said Boral’s earnings growth is expected to continue in the coming years, predicting near-double digit growth without including gains from property sales.
"Volumes from commercial, infrastructure and major projects activity, and margin improvements are expected to more than offset the impacts of a moderating residential construction sector," he said.
“Earnings from USG Boral are expected to grow by around 10% or higher in FY2019, coming from improvements in China, Indonesia, Thailand, Vietnam and India.
"Our largest businesses – Australia and South Korea – are expected to continue to perform at strong levels, albeit residential construction is forecast to moderate in both countries, Mr Kane said yesterday.
Boral has forecast earnings from the Australian business to be at least in line with the previous year, while earnings from North America will rise by around 20%.
