James Hardie share price: What’s the outlook following FY21 Results?

We examine the construction company’s full-year results and FY22 guidance.

FY21 Results in Focus

Global building and construction company James Hardie (ticker: JHX) on Tuesday released its fourth quarter and FY21 full-year results to the market.

Overall, for the fourth quarter and on a year-on-year basis, the company reported:

  • Global net sales of US$807.0 million, up 20%
  • Global adjusted earnings (EBIT) of US$173.1 million, up 43%
  • Adjusted net income of $US124.9 million, up 44%

That solid quarter of growth bolstered the company’s FY21 performance, with James Hardie reporting full-year:

  • Global net sales of US$2.9 billion, up 12%
  • Adjusted net income of US$458.0 million, up 30%
  • Operating cash flow of US$786.9 million, up 74%.

Despite posting double-digit growth across a number of key metrics, investors bid the stock lower on Tuesday, with the James Hardie share price finishing out the session down 4.32% or $1.82 at $40.28 per share.

Short-term price weakness aside, the stock has performed well over the last year, gaining 69% in that period.

The Outlook

The company used the full-year release to reiterate its growth ambitions while also touting its expanding global footprint.

Broken down geographically, North America remains the biggest sales driver for the group, with FY21 net sales of $2,040 million; the APAC region ranked second in terms of importance, with net sales of $458 million; and the EU market came in third, at $410 million.

Highlight: In FY21 APAC earnings (EBIT) margins hit 28%. This, said the company, was driven by plant consolidation, profit growth in New Zealand and the exit from the JH Systems Business.

In terms of earnings margins, management also upwardly revised its medium-term FY22 to FY24 margin guidance – on a region-by-region basis. Revisions highlighted in the table below:

Region

Previous Guidance

New Guidance

North America

20-25%

25-30%

APAC

20-25%

25-30%

Europe

10%

11-16%

Beyond margin guidance, the company said it expected total annual CAPEX to come in at US$250 million between FY22 and FY24.

Looking forward, management said they expected FY22 net income of between US$520 million to US$570 million, which implies a growth rate of between 14% to 24%, respective, on a PCP basis.

Finally, James Hardie's Chief Executive Officer, Dr. Jack Truong went onto elaborate that:

'Our expanded focus for fiscal year 2022 and beyond is to execute on the three strategic initiatives that we introduced in February 2021. This includes commercialisation global product innovation, further penetrating into existing and new market opportunities, and extending the James Hardie brand from a premium professional brand into a market-leading consumer brand.'

JHX currently trades on an 82x earnings multiple.

Trade stocks like James Hardie long and short with IG today

Create an IG account or log in to your existing account to get started now

IGA, may distribute information/research produced by its respective foreign affiliates within the IG Group of companies pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the research is distributed in Singapore to a person who is not an Accredited Investor, Expert Investor or an Institutional Investor, IGA accepts legal responsibility for the contents of the report to such persons only to the extent required by law. Singapore recipients should contact IGA at 6390 5118 for matters arising from, or in connection with the information distributed.

The information/research herein is prepared by IG Asia Pte Ltd (IGA) and its foreign affiliated companies (collectively known as the IG Group) and is intended for general circulation only. It does not take into account the specific investment objectives, financial situation, or particular needs of any particular person. You should take into account your specific investment objectives, financial situation, and particular needs before making a commitment to trade, including seeking advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit.

Please see important Research Disclaimer.

Live prices on most popular markets

  • Forex
  • Shares
  • Indices
liveprices.javascriptrequired
liveprices.javascriptrequired

Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 15 mins.

liveprices.javascriptrequired

Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 20 mins.

The Momentum Report

Get the week’s momentum report sent directly to your inbox every Monday for FREE. The Week Ahead gives you a full calendar of upcoming key events to monitor in the coming week, as well as commentary and insight from our expert analysts on the major indices to watch.

For more info on how we might use your data, see our privacy notice and access policy and privacy webpage.

You might be interested in…

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.