Boral sets sights on a turnaround

BORAL chief Mike Kane says the building products supplier needs to deliver a “very strong” performance for the rest of the year after a slow September quarter.

Shares in Boral slumped by 2 per cent yesterday, closing at $5.52, after Mr Kane said sales had been below expectations during the three months to September and for the start of October as poor weather interrupted projects in Australia and the US.

“We are working to claw back earnings through volume recoveries, improvement initiatives and cost reductions,” Mr Kane said yesterday.

Despite the slow start to the financial year, Mr Kane said Boral was sticking to its 2018-19 guidance of delivering earnings before interest, tax, depreciation and amortisation broadly in line with that achieved last financial year.

He cautioned, however, that the target assumed favourable weather conditions.

“We need a very strong performance for the remainder of the year and we are assuming drier weather conditions relative to last year,” Mr Kane said.

“We are now expecting a strong skew in earnings to the second half of the year because results for the first quarter and into October are below our expectation.”

In August, Boral announced a 48 per cent lift in full-year underlying profit to $441 million, driven by local construction and growth in North America.