James Hardie Upgrades Outlook, Eyes Record Quarter

By Glenn Dyer | More Articles by Glenn Dyer

Building materials multinational, James Hardie has sharply upgraded its 2020-21 profit to between $US380 million ($526 million) and $US420 million ($582 million) and says it expects the current second quarter (to the end of September) will be a record one for sales and profits.

This is an improvement on previous guidance of between $US330 million ($457 million) and $US390 million ($540 million) and would be a rise of 22%.

The market though all but ignored the upgrade with the shares up 1.6% to $35.78.

You would have thought a 20% plus upgrade might have sparked a stronger reaction, but some analysts reckon the improvement was already in the share price after encouraging comments from management earlier this year.

The company told the ASX on Wednesday that it is expecting a big increase in earnings and profit for the current quarter.

“For the second quarter FY2021, the company expects Group Adjusted EBIT (earnings before interest and tax) and Group Adjusted NOPAT (net operating profit after tax) to both increase by approximately 22% compared to the prior corresponding period,” James Hardie told the ASX.

“The company also expects second-quarter Group Net Sales, Group Adjusted EBIT and Group Adjusted NOPAT to be all-time quarterly highs.

“This is the sixth consecutive quarter that we have delivered growth above market with strong returns. We continue to achieve these results by executing better every day against our strategic imperatives and seamlessly serving our customers while improving working capital for our customers and for the company,” CEO Jack Truong said in the update.

Directors said this will be as a result of the first time returns from James Hardie’s three operating regions, North America, Asia Pacific, and Europe have all risen at the same time.

“We expect to continue to deliver consistent results as our company evolves,’’ Mr. Truong said in the update.

“We’ve made significant progress on our LEAN manufacturing transformation, which allows us to consistently and efficiently deliver premium-quality products and services to our customers around the world where we operate’’.

However, the company added a caveat that the updated guidance is based on assumptions that are still “subject to several known and unknown uncertainties and risks, including those related to the COVID019 pandemic”.

Glenn Dyer

About Glenn Dyer

Glenn Dyer has been a finance journalist and TV producer for more than 40 years. He has worked at Maxwell Newton Publications, Queensland Newspapers, AAP, The Australian Financial Review, The Nine Network and Crikey.

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