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JHX

James Hardie – FY22 first quarter result showing exceptional growth

Timothy Anderson

Timothy Anderson is a contributor with the Australian Stock Report and is currently in his final year of studying a Bachelor of Applied Economics and a Bachelor of International Relations and Politics at the University of Canberra. Tim has a genuine passion for economics, specifically in macroeconomic analysis including how certain macroeconomic policies and indicators affect financial markets and the economy, as well as how these factors affect personal investment strategies. Tim currently holds RG146 Tier 1 Generic Knowledge qualifications.

James Hardie Industries Plc (ASX: JHX) is the world’s number 1 producer and marketer of high-performance fiber cement and fiber gypsum building solutions. The fibre cement products are used in a number of markets, including new residential construction, manufactured housing, repair and remodelling and a variety of commercial and industrial applications. James Hardie’s main geographic markets include the United States, Australia, New Zealand, Europe and Canada. James Hardie has a market capitalisation of around A$21 billion.

 

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What are the key features of James Hardie’s first quarter 2022 results (QI FY22)?

James Hardie’s net sales increased to $US835 million (up 35% in Q1 FY22 relative to Q1 FY21Q), while adjusted net income increased to $134 million (up 35% in Q1 FY22 relative to Q1 FY21Q). There was strong growth in net sales across all markets (North America up 28%, Europe up 37% and Asia Pacific up 27%) mainly reflecting the strong residential construction market. The highlights are strong volume growth across all markets and continued improvement in profitability of the European business.

 

What is the outlook for James Hardie?

Based on the continued execution of the global strategy across all three regions and the expectation for continued residential and market growth in the United States, James Hardie has increased its guidance for FY22 (which ends on 31 March 2022). James Hardie now expects FT22 adjusted net income to be between US$550 million and US$590 million, compared to the prior range of US$520 million and US$570 million. The comparable prior year Adjusted Net Income for fiscal year 2021 was US$458.0 million. At the mid-point, this represents a plus 5% upgrade to prior guidance.

 

What is the market reaction to TCL FY21?

The market reaction to James Hardie’s Q1 FY22 is positive, with its share price increasing by around 4% to around $A50.00. In fact, James Hardie’s share price has been exceptionally strong, more than doubled since the March 2020 downturn in the share market. James Hardie is trading on a forward PE ratio of around 27 times earnings and a dividend yield of around 2% (unfranked).


Disclaimer:

This article has been prepared by the Australian Stock Report Pty Ltd (AFSL: 301 682. ABN: 94 106 863 978)
(“ASR”). ASR is part of Amalgamated Australian Investment Group Limited (AAIG) (ABN: 81 140 208 288 Level 13, 130 Pitt Street, Sydney NSW 2000).

This article is provided for informational purposes only and does not purport to contain all matters relevant to any particular investment or financial instrument. Any market commentary in this communication is not intended to constitute “research” as defined by applicable regulations. Whilst information published on or accessed via this website is believed to be reliable, as far as permitted by law, we make no representations as to its ongoing availability, accuracy or completeness. Any quotes or prices used herein are current at the time of preparation. This document and its contents are proprietary information and products of our firm and may not be reproduced or otherwise disseminated in whole or in part without our written consent unless required to by judicial or administrative proceedings. The ultimate decision to proceed with any transaction rests solely with you. We are not acting as your advisor in relation to any information contained herein. Any projections are estimates only and may not be realised in the future.
ASR has no position in any of the stocks mentioned.

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