Boral shareholders were promised at the release of the 2010 results in August, that they would get a trading update at the AGM.
Well, the AGM was held yesterday and shareholders didn’t quite get a trading update, more a bit of the same old same old they received in August, with the adjective "bumpy" thrown in to give us an idea of how the first half was travelling.
That sounds like a rough old warning to shareholders not to be too expectant.
Here’s what they were told in August by new CEO, Mark Selway:
"Forecasting in the current economic climate continues to remain difficult. Current market conditions are expected to broadly continue during the first half of FY2011. Second half activity levels are expected to be stronger than in the December 2010 half but are difficult to forecast at this point in time.
"The actions taken from the strategic review provide a strong platform for increased growth and earnings when external conditions improve. We will provide a trading update at Boral’s Annual General Meeting on 4 November 2010."
A précis of what they were told yesterday by Mr Selway could be put this way: it’s been a "bumpy" first half; everything is waiting on the second half. I’ll give you an update next February with the first half results.
"It has been a pretty bumpy start to the year with continued economic uncertainty in the United States and wetter than usual conditions holding back progress in many of in our key Australian markets.
"In Construction Materials we have seen rain affect our principal concrete market and comparatively lower earnings from asphalt and quarries due to exceptional profits in the first half of FY10.
"Building Products has made further progress in volume, plant utilisation and efficiencies in the first quarter, and we remain confident of further progress in the full year.
"In Cement, production volumes have remained broadly flat and while Asia has experienced a comparatively wetter start we still remain confident in an improved performance in the current year.
"The US market remains difficult and Mike Kane and his team are working hard to absorb the incremental losses associated with the acquisition of the balance of MonierLifetile.
"The effect of US losses is expected to be lower this year due to a strengthened Australian dollar.
"When you put all this in the round, we expect first half conditions to be broadly similar to the second half of 2010, followed by a stronger second half to the year.
"Given the continued mixed and conflicting economic data in many of our markets, I will look to provide a further trading update at the time of the Group’s half year announcement."
The phrase ‘don’t quite know’ comes to mind, but the first half must be weak.
Boral earned $132 million net in the full 2010 financial year.
That was made up of a $68 million first half and a $64 million second half, which was a bit stronger than expected because the interim forecast for 2010 earnings was $123.5 million, which were topped.
With housing falling here and in trouble again in the US, and construction soft in places, those bumps might go on for a bit longer.
Boral shares took the uncertainty in their stride and ended unchanged on $4.36.
And another corporate holding its AGM yesterday was Suncorp Metway, the Brisbane-based insurer and regional bank that is undergoing something of a rebirth after a close brush with fate during the GFC.
The bank is back earning respectable profits, the insurance side is being re-organised by CEO Patrick Snowball and the company plans to move to a simplified non-operating holding company that should make life simpler and easier to comprehend, especially for investors.
More details about that proposal should be available around the middle of this month.
There was no trading update in the speech from Mr Snowball, but in his speech chairman John Story held out the prospect of shareholders receiving a capital return, but not quite yet.
Sensibly that commitment is hedged with provisos about the state of health of the economy and the financial system.
Mr Story said, "The improvement in our capital position, combined with our confidence in the future prospects of the business, allowed the Board to pay a full year dividend at the top end of our target payout ratio.
"We believe that this ratio, of 50% to 60% of cash profits excluding divestments, remains appropriate, having regard to the continuing uncertainties within the external environment that are affecting the global financial services sector.
"However, it is clear that a combination of achieving the operational targets we have put into the market, and the orderly run-off of our non-core banking portfolios, will see the emergence of capital that is surplus to the requirements of the Group.
"As and when this occurs, it is the clear intention of the Board, that this be returned to shareholders.
"But I stress that this will be subject to a substantial resolution of the existing uncertainties within the external markets, and only when it is fully prudent to do so having regard to the circumstances within the Group."
The key to any return clearly lays in the returns from the so-called "bad bank" of assets, mostly loans to property developers in Queensland and NSW.
Mr Story confirmed that he will step down at the 2011 AGM.
Suncorp shares rose 19c to $9.57.
