Boral boss departs as shares take dive

BORAL chief Mike Kane is stepping down after the construction materials group issued a profit warning amid the fallout from the accounting scandal buffeting its windows business in the US.

Mr Kane, who joined the company in 2010 and was appointed to the top job in 2012, plans to depart after Boral reports full-year results in six months.

It follows a torrid period for the group marked by a series of earnings downgrades and the revelation in December of financial irregularities at its North American windows unit.

Shares in Boral tumbled yesterday, closing 10.7 per cent lower at $4.60, after the group announced Mr Kane would soon depart and issued the profit warning.

A search has been launched to find his successor.

Boral said tough trading conditions had continued, and earnings were expected to fall at its Australian and North American units, and at plasterboard division USG Boral. The materials heavyweight expects a profit of $320 million to $340 million for the year to June, excluding one-off costs.

That compares with a profit of $420 million the past year after that result was restated to account for misreporting at the US windows business.

In a statement to the Australian Securities Exchange, Boral said earnings were overstated at that unit — acquired as part of its takeover of US group Headwaters several years ago — by $US24.4 million for the period from March 2018 to last October.

Audit reviews found the accounting fraud was confined to the windows business, and the jobs of the financial vice president and financial controller of the unit had been “terminated”, Boral said.

The probe found finance staff within the windows business “manipulated accounts and financial statements primarily to artificially inflate the overall profitability and health of the windows business”, the company said.

It said there was “no evidence that the manipulations were to hide systematic theft of raw materials or finished goods”.

Mr Kane had said in December, after the accounting scandal broke, that he had “no intention of leaving immediately”. But chair Kathryn Fagg held a series of high-level meetings with top shareholders shortly after as tensions mounted over the nearterm performance of its troubled US business and the group’s long-term strategy.