Shares in Boral Ltd softened today after it revealed its first quarter revenues hadn’t improved on last year, as the building products company suffers from a dip in Australian construction activity. However Boral still expects its full year net profit would lift five per cent on last year’s record $370m underlying profit.
Executive director Rod Pearse told shareholders at Boral’s annual general meeting in Sydney today that sales for the three months to September 30 this year were weaker in certain key markets, particularly in NSW, than for the same period last year.
However that was partially offset by higher activity in the United States.
"Overall Australian revenues for the first quarter were at a similar level to last year but are below expectations," Mr Pearse said.
"We continue to see clear signs of residential approvals and activity softening in Australia, particularly in NSW, and are yet to experience the anticipated strengthening of activity in the non-dwellings segment.
"Residential activity in our US markets remains at high levels and is above our expectations.
"In Asia, lower construction activity and price pressures in South Korea, and the impact of imported products in Thailand, will adversely effect the results from our plasterboard joint venture."
Some analysts had expected the company might announce a share buyback today, to help strengthen its stock after its failed attempt to buy cement and lime producer Adelaide Brighton Ltd.
Boral’s troubled $840 million bid for AdBri was called off last month, with Mr Pearse saying the takeover was no longer worth the time and effort with the company facing a court battle with the competition regulator for the takeover to go ahead.
He told shareholders today he would prefer to spend the money on growing the business.
"Our growth capital expenditure will exceed $300m in the 2004/05 financial year, which is consistent with our strategy of investing at least $200m per year in value adding growth," he said.