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FY21 result: James Hardie (ASX:JHX) share price falls

The James Hardie Industries plc (ASX: JHX) share price has fallen around 3% after the business reported its FY21 fourth quarter and the full year result.

James Hardie’s FY21 fourth quarter

In the fourth quarter, the building products business saw 20% growth of global net sales to US$807 million. Global adjusted EBIT (EBIT explained) for the quarter increased 43% to US$173.1 million. Adjusted net income (NOPAT) grew 44% to US$124.9 million for the quarter.

James Hardie reported that every reporting region delivered double-digit net sales and double-digit EBIT growth for the FY21 fourth quarter.

FY21 result

After that strong final period of the year, James Hardie was able to deliver its 2021 financial year result.

Global net sales rose 12% to US$2.9 billion. The global adjusted EBIT increased by 29% to US$629 million. The adjusted net income went up 30% to US$458 million for the year.

The building products business saw a large increase in its operating cashflow, which grew by 74% to US$786.9 million.

The business saw its adjusted EBIT margin improve by 340 basis points (3.40%) in FY21.

FY22 guidance

James Hardie said that its adjusted net income guidance range is US$520 million to US$570 million. That suggests growth of at least 13.5% and up to 24.4%.

Management comments

James Hardie CEO Dr Jack Truong said: “We have now delivered eight consecutive quarters of consistent profitable growth, including record financial results each of the past three quarters. Our performance in fiscal year 2021 marked a significant step change across multiple facets of our global company that allowed us to deliver the consistent profitable growth on an expanding global scale. Over the past twelve months, we were able to accelerate our strategy: (i) to unlock capacity and increase efficiency in our global manufacturing network through LEAN initiatives and (ii) to better integrative our supply chain with our customers, which collectively drove consistent market share gains in all three regions.”

Outlook for the James Hardie share price

The business continues to invest for growth and extending into new markets. It’s doing a lot of the right things, I’m just not sure how much growth there is going to be for the business over the longer term.

If this strong performance is part of a cycle then it would make sense for conditions to calm down before buying James Hardie shares.

I think there are some ASX growth shares that may be able to deliver more consistent profit growth over the coming years.

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At the time of publishing, the author of this article does not have a financial or commercial interest in any of the companies mentioned.

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