The Boral Limited (ASX: BLD) share price is up around 5% after the business updated its guidance for FY24.
Boral describes itself as the largest vertically-integrated construction materials company in Australia. It says that its network includes prized quarry and cement infrastructure, bitumen, construction materials recycling, asphalt and concrete batching operations.
FY24 profit guidance upgrade
Boral said that it was upgrading its guidance for the 2024 financial year, with underlying EBIT (EBIT explained) now expected to be between $300 million to $330 million, up from $270 million to $300 million.
The building products business said that the increased guidance reflects a “better financial result” for July to October 2023, achieved through “price traction” and cost management across each of Boral’s businesses and improving confidence that the gains achieved in the first four months could continue over the rest of the financial year.
Management comments
The Boral CEO Vik Bansal said:
We are pleased to upgrade our FY24 guidance, with year-to-date performance reflecting greater discipline in the pricing and cost from our operating model. Price realisation remains extremely important in the current inflationary environment.
Volumes year to date have been relatively steady and at this stage, we expect this to continue through the remainder of FY24.
Is the Boral share price a good opportunity to invest?
The business is clearly doing well and it’s good to own businesses that are doing wel. However, I’m not sure that it’s the right time to invest because construction demand can be a cyclical, so it’d be better to invest at near the bottom of the cycle rather than at a time of strength.
I don’t know how long the strong conditions will continue – Australia is investing a lot in infrastructure and the population continues to grow, so Boral may be able to continue to positively surprise investors.
For now, I’d rather look at other industrial ASX shares which aren’t doing as well but could bounce back.
