JH profit up but no dividend

BUILDING products manufacturer James Hardie has declined to provide an annual guidance but expects margins in its key North America business to stay resilient despite the coronavirus-related disruptions.

The company reported a 6.0 per cent increase in fullyear profit to $US241.5 million ($A370.9 million).

Its net operating profit for the year to March 31, which strips out asbestos liabilities, rose 17 per cent to $US352.8 million.

Earlier this month, it announced a suspension in dividend payments due to the market volatility on account of the pandemic and tightened its operating profit guidance to between $US350 million and $US355 million.

But its operations did not seem much affected in the March quarter, with improved performance across the North American operations resulting

in 11 per cent volume growth in the exterior business and 5.0 per cent in the interior business.

Europe Building Products segment delivered 7.0 per cent revenue growth for the year while the Asia Pacific segment, which includes Australia, also saw revenue improve 2.0 per cent.

The better-than-expected performance and outlook cheered investors, with shares in the company surging as much as 14 per cent early in the session. By 2.30pm (AEST) yesterday, the stock was still up 11.2 per cent at $23.42 each.

“Our performance in March was exceptionally strong despite the highly volatile market environment in which we operated,” chief executive Jack Truong said.

“We supplied our customers seamlessly around the world, growing revenue by double digits in each region we operate in.”

Net sales for the full year were up 4.0 per cent to $US2.61 billion.

James Hardie makes a range of products including fibre cement sheeting, weatherboard, flooring and decking.

James Hardie declined to issue a full-year guidance, given the highly volatile and uncertain circumstances surrounding the COVID-19 pandemic and its effect on demand in various countries.

However, it expects margins at its main North American business to range between 22 per cent and 27 per cent for the first quarter of 2020-21.