The Boral Limited (ASX: BLD) share price is 6% higher after the construction products company announced its FY23 result.
Boral has a variety of operations, including quarry and cement infrastructure, bitumen, construction materials recycling, asphalt and concrete batching operations.
FY23 result
Here are some of the highlights from the 12 months to June 2023:
- Revenue rose 17% to $3.46 billion
- EBITDA (EBITDA explained) grew by 38% to $454.4 million
- EBIT improved 106% to $231.5 million
- Underlying net profit after tax (NPAT) grew 304% to $142.7 million
- Statutory NPAT of $148.1 million
- Operating cash flow rose 66% to $358.7 million
- No dividend for FY23
Boral said that there was increased volumes across all products and “pricing traction” in all regions and products.
It managed to increase its profit margins thanks to “better cost control” and “improved price discipline”.
Higher profit margins should be good news for the Boral share price.
Management comments
The Boral CEO Vik Bansal spoke at length about what the business has been working on, and what it’s working towards:
I am pleased to see Boral deliver a set of full year results that show clear improvement across the entire business, and point to the opportunities that remain ahead. We have seen volume growth across all our products, coupled with a disciplined approach to price, cost, and cash.
Safety of our people is our highest priority and zero harm remains our goal. Significant work remains to deliver best-in-class performance we strive for, and 47% improvement in our recorded injury rates equates to 83 fewer people injured compared to the previous year.
Along with the improvement in safety of our people, we remain focussed on improving our customer service. Our PEMAF pillars – People, Environment, Markets, Assets, and Financials – continue to underpin the simplification and standardisation initiatives that are now well underway at Boral. Our business cadence and focus have shifted to be aligned with the new operating model. This is providing clarity in role and accountability for our people, with clear operational and financial targets established for each pillar.
Outlook for the Boral share price and FY24
The ASX company said that assuming no “significant shift” in market demand or price environment, it expects to deliver ‘underlying EBIT’ of between $270 million to $300 million in FY24.
It’s going to work on a number of things including decarbonisation efforts, building “commercial discipline”, improving customer service and sales effectiveness, improving its operational performance, improving logistics and improving its cash conversion.
Boral can’t control what’s happening with the wider economy, but it can improve its internal operations, which it’s seemingly making progress with. However, after a 60% rise in the last year, I don’t think it’s a great buy today because it has recovered a lot of the decline from 2022.
