ASX200 Boral’s (ASX:BLD) New Board Appointment irks Perpetual, reduces stake to 5.46%

Summary

  • ASX-listed financial services firm Perpetual Limited lowered its stake in ASX200 player Boral Limited to 5.46% before raising objections to the appointment of two Seven Group directors to the Boral’s.
  • Perpetual’s stake is down from 6.54% as recorded on the prior notice.
  • On 28 September 2020, Sydney-headquartered Boral onboarded new independent non-executive directors.
  • The Company stated that each of the new directors would stand for election at the AGM on 27 October 2020.

 


Australian investment and trustee group Perpetual Limited (ASX:PPT) reduced its stake in Boral Limited (ASX:BLD) before raising objections concerning onboarding of two directors from Seven Group Holdings Limited (ASX:SVW) to the Company’s board.

On 28 September 2020, Boral Limited had disclosed two new independent non-executive directors’ appointment to its board. Moreover, BLD agreed to onboard two nominees of Seven Group as non-executive directors.

On 12 October 2020, BLD’s share price was noted at A$4.970, down by 0.201% with a market capitalisation of almost A$6.10 billion. 

Let us discuss in detail-

About Boral Limited

ASX200 player Boral Limited is an Australia-based building product and construction material group. BLD help its customers in building something great by helping them with the supply of high-quality, sustainable construction materials and building products. Boral has 646 operating sites in 17 nations along with 137 distribution sites.

The Company operates through its three main segments, including Boral Australia, Boral North America, and USG Boral.

  • Boral Australia is the biggest integrated construction materials company across Australia.
  • Boral North America has industry-leading positions in fly ash processing along with distribution.
  • USG Boral is a 50:50 JV (joint venture) with Knauf/USG Corporation.

Perpetual Reduced its Stake in Boral to 5.46%

Perpetual cut its share in Boral before objecting to the appointment of two Seven Group directors to the board of Boral.

On 9 October 2020, Perpetual disclosed a substantial shareholder announcement on the ASX mentioning that Perpetual had cut its shares in Boral Limited to 5.46%, which was down from the 6.54% as recorded on the prior notice.

Boral announced the renewal of its board

On 28 September 2020, the Company disclosed the appointment of two new independent non-executive Directors to its board. Moreover, the Company agreed to onboard two nominees of Seven Group Holdings Limited (ASX:SVW) as non-executive Directors.

The Company also added that the appointment of the four new non-executive Directors is effective from 28 September 2020. Each of the new Directors shall stand for election at the Annual General Meeting of Boral on 27 October 2020.

Onboarding of new independent non-executive Directors

The new independent non-executive Directors of Boral’s board are Rob Sindel and Deborah O’Toole.

Rob Sindel

Rob Sindel brings his deep operational experience of the building and construction materials sector to the board of the Company. Formerly he was Managing Director & CEO of CSR Limited for almost eight years to 2019. 

Currently, Mr Sindel is Chairman of Orora Limited (ASX:ORA) and a Director of Mirvac Group (ASX:MGR).

Deborah O’Toole

Deborah O’Toole has extensive executive experience along with finance capability including as a former CFO in three ASX listed companies- MIM Holdings, Queensland Cotton and Aurizon.

Moreover, She has substantial board level experience including as chair of various audit/risk committees of Sims Metal Management, Credit Union Australia, Asciano Rail Group, and Alumina Limited.

Deborah O’Toole intends to ease her current commitments to make sure she can devote sufficient time to her new role at Boral.

New nominees of Seven Group Holdings

Boral also disclosed that Seven Group Holdings (SGH) and its associated entities now hold a relevant interest in up to approximately 19.9% of the shares of Boral.

Seven Group has nominated Ryan Stokes and Richard Richards to the board as nominees of SGH. Boral believes that both nominees have experience & knowledge that is suitable for Directors and shall add to the capability and skills of the board.

Both nominees have recognised the importance of acting in the stakeholders’ interests and managing any disagreements of interest carefully.

Boral’s Chairman Kathryn Fagg commented on the new appointments to the board-

He also said that Boral is looking ahead for completing its portfolio review that is currently in progress and then re-setting the business for delivering robust performance and value for the shareholders of the Company.

FY2020 Highlights

On 22 September 2020, Boral Limited updated the market with its annual report for the financial year 2020.

  • During the period, the sales revenue of Boral from continuing operations was A$5.67 billion, down by 1%.
  • EBITDA was reported at A$715 million, down by 29%. This decline reflects lower EBITDA from all three businesses of Boral due to the challenges in FY20.
  • The NPAT stood at A$177 million with the figure excluding significant items.
  • Boral paid an interim dividend of 9.5 cents per share on 15 April 2020, and now the board determined not to pay a final dividend for the financial year 2020 given the significant uncertainty.

Way Ahead FY21

Image Source: Kalkine

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