Skip to content

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. Please ensure you fully understand the risks involved. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. Please ensure you fully understand the risks involved.

Boral share price falls as reality sets in

The construction company looks to be facing a difficult Q1, as the impact of the Greater Sydney lockdowns spread.

Boral share price falls as reality sets in Source: Bloomberg

Boral (ticker: BLD) – which represents Australia’s largest construction materials and building products supply company – saw its share price fall sharply on Tuesday after releasing its FY21 results to the market.

The company has attracted significant attention from the market and media of late, after Kerry Stokes’ Seven Group swallowed up 70% of Boral in recent months.

Corporate skirmishes aside, Boral reported a solid set of FY21 results, though the absence of a final dividend likely left investors wanting.

FY21 results

On the top-line, the company saw full-year revenue slump 6%, while sales revenue from continuing operations came in at $2.9 billion. This, said management was driven by ‘lower volumes and softer prices.’ By comparison, revenue from total operations was $5.3 billion 2021.

On the bottom-line, Boral posted earnings (EBIT) of $445 million, up 45% year-on-year; and profits (NPAT), before significant items, of $251 million, implying a year-on-year increase of 44%.

Giving a more granular view to that EBIT performance, Boral noted that its Australian division – on a continuing operations basis – booked EBIT on an ex-property basis, on $157 million, up 11% year-on-year. Looking forward, as part of its 5-year transformation program, the company is targeting Australian EBIT of between $200 million to $250 million.

The company has also drastically lowered its debt over the last 12-months, with net debt falling from $2.5 billion in 2020 to $899 million at the close of FY21.

Click here to read our beginners’ guide to fundamental analysis.

Dividends?

One thing from the results that may have shocked the market however was the lack of a dividend. Here Boral’s Board noted that it would not pay a Final Dividend. Analysts from Ord Minnett described this as a key negative, saying:

‘The lack of a dividend could be a disappointment; we were forecasting 4cps and consensus was at 6cps.’

Despite the lack of a dividend, the company teased future dividends following the completition of its US divestments, which was noted, would result in surplus capital.

‘Subject to prevailing conditions and other reinvestment opportunities, surplus capital will be available for distribution to shareholders taking into account the availability of franking credits and the prevailing share price.’

FY22 outlook

While the company did not provide specific FY22 operational performance guidance, management stressed that that the 'underlying market conditions in Australia are mixed and uncertainty remains.'

This has already impacted fiscal 2022 operations, with the company saying it has experienced 'lost volumes and higher costs' as a result of the Greater Sydney outbreak/ lockdown. Tangibly, management said this could result in a hit of upto $50 million to Q1 EBIT.

Boral share price

In response to all this, Boral’s share price was bid sharply lower on Tuesday, falling 5.18% to $6.50 per share by the afternoon session. Positively at least, at those price levels the stock remains up 30% year-to-date.

Take your position on over 13,000 local and international shares via CFDs or share trading – and trade it all seamlessly from the one account. Learn more about share CFDs or shares trading with us, or open an account to get started today.

This information has been prepared by IG, a trading name of IG Australia Pty Ltd. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients.

Live prices on most popular markets

  • Forex
  • Shares
  • Indices

You might be interested in…

<h3>How much does trading cost?</h3>
<h3>Find out about IG</h3>
<h3>Plan your trading</h3>

Find out what charges your trades could incur with our transparent fee structure.

Discover why so many clients choose us, and what makes us a world-leading provider of CFDs.

Stay on top of upcoming market-moving events with our customisable economic calendar.