Boral (ASX: BLD) shares jump on half-year results

Boral Ltd (ASX: BLD), a prominent player in the building materials sector, is making headlines as its shares experience a 9.15% surge during afternoon trade on 9 February 2024.

Investors are closely watching Boral's impressive performance, with a significant 13% increase propelling its shares to a 52-week high of $6.10.

This surge follows the release of a robust half-year result, showcasing Boral's financial prowess and strategic direction.

Revenue Growth and Margin Improvement

During the first half of the fiscal year, Boral witnessed a remarkable 9.4% increase in revenue, totaling AU$1,839.9 million. The surge was primarily fueled by strong price realization, with volumes remaining flat to slightly up compared to the previous period. The company's EBIT saw a staggering 110.9% rise to AU$201.0 million, reflecting a 520 basis-point improvement in its margin. This margin enhancement is attributed to a combination of increased revenue and stringent cost management.

Underlying Net Profit and Dividend Decision

Boral reported a remarkable 143.9% increase in underlying net profit after tax, reaching AU$138.6 million. Despite this impressive performance, the company's board decided against an interim dividend, citing a low franking credit balance.

Management Commentary

Vik Bansal, CEO of Boral, expressed satisfaction with the company's first-half results. He highlighted the benefits of their operating model and business improvement strategy, emphasizing the flat to slightly increased volumes, good price realization, and ongoing efforts to reduce costs and enhance operational efficiency.

Outlook and Guidance Upgrade

Boral's earnings have traditionally been weighted towards the first half, and while FY23 deviated from this trend, Bansal expects a return to the typical first-half weighting in FY24. Despite this historical trend, the CEO anticipates a stronger EBIT than previously guided. The updated guidance for FY 2024 predicts an underlying EBIT in the range of AU$330 million to AU$350 million, a significant increase from the previous range of AU$300 million to AU$330 million and a substantial rise from FY 2023's EBIT of AU$231.5 million.

Boral's Share Price Performance

Following today's gain, Boral's share price has marked an impressive 60% increase since the same period last year.

Conclusion

In conclusion, Boral Ltd's surge in share price and strong half-year results position the company favorably in the building materials sector. The strategic financial decisions and positive outlook outlined by CEO Vik Bansal contribute to Boral's promising trajectory in the market.