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BLD, BORAL LIMITED
mullokintyre
post Posted: Feb 4 2019, 09:09 AM
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Market did not like BLD's annual figures.
Think its more to do with the cladding fire than the annual report.
Heading down to areas not seen since 2009.
I have put some speccy lowball bids in just in case.

Mick



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sent from my Olivetti Typewriter.
 
nipper
post Posted: Aug 29 2018, 05:44 PM
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QUOTE
annual underlying profit rose 48 per cent to $441m compared with an analysts’ consensus figure of $448m driven by the local infrastructure construction market and growth from its Headwaters unit which Mr Kane described as “a gem” following its $US2.6bn acquisition of the Utah-based construction materials group in early 2017.

The company said it expects growth across all of its business in the 2019 fiscal year including a significant lift in earnings from its North American division.

Boral Australia should lift EBITDA by the high single digits if property is excluded in both years with volumes from commercial, infrastructure and major projects activity offsetting a moderating residential construction sector.

USG Boral earnings are expected to grow by 10 per cent and Boral North America EBITDA by 20 per cent...
- always thought the shorts - quoting housing off the boil - were somewhat misguided
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"What I look at is my order book and when I look at what we’re bidding on and the volume of work in roads, highways, infrastructure, bridges, tunnels and airports is just amazing,” chief executive Mike Kane said on a media call. “Look at the announcement that came out of Victoria. These projects are coming at us day after day after day and they all don’t have to be built for us to have an extraordinary next decade.”




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"Every long-term security is nothing more than a claim on some expected future stream of cash that will be delivered into the hands of investors over time. For a given stream of expected future cash payments, the higher the price investors pay today for that stream of cash, the lower the long-term return they will achieve on their investment over time." - Dr John Hussman

"If I had even the slightest grasp upon my own faculties, I would not make essays, I would make decisions." ― Michel de Montaigne

Said 'Thanks' for this post: mullokintyre  
 
nipper
post Posted: Feb 6 2017, 08:58 AM
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The negative response to a recent major acquisition has created the opportunity

During November 2016, BLD acquired a US building and construction materials company called Headwaters for $AUD $3.5 billion. The acquisition was significant for BLD, the value of the bid for Headwater represented 80% of BLD's market capitalisation of $AUD 4.3 billion.

The market generally viewed the BLD transaction negatively. The perception was BLD paid too much for Headwater, particularly considering the high degree of risk in joining the two companies together.

There are some potential positives from the deal…

We do see some positives from the Headwater transaction. In addition to increasing BLD's exposure to the US housing market, the acquisition will see BLD move to dominant market shares in some key building material product lines. BLD will have a 50% share of the US concrete and clay market, 60% of stone1 and 55% of fly ash.

On the back of greater dominance in key product lines and greater scale, BLD has put forward some reasonably aggressive synergy targets, expected to be $100 million over the next four years, coming from:
 Procurement (ability to source raw materials at lower prices due to buying power)
 Operational cost savings (fixed cost overheads, economies of scale)
 Cross selling and distribution (economies of scope)

If these synergies are achieved, the price BLD has paid for Headwater is much more reasonable,
but we accept the market will not believe them until there is further evidence

Boral Valuation
How are our forecasts for BLD earnings different to market forecasts? In our valuation of BLD we assume the following:
 A 10% per annum recovery in new US housing construction (the market is at 5%)
 A decline in Australian new housing construction from 250,000 to 160,000
 A 6% per annum increase in renovations in the USA
 A recovery in Australian non-residential construction (fixed asset investment)
 $75 million in synergy benefits from the Headwater acquisition

Once we have included these assumptions into our model, we assess we are paying approximately 11 times 2019 earnings for BLD. Furthermore, we expect that market will be pricingin further growth from 2019 as we will only be part way through the US new housing construction recovery.

Whilst a judgement call, we expect the market will be willing to pay 16 times for BLD's 2019 earnings, implying 40% upside from the current share price of $5.60.

We believe the mispricing of BLD shares is caused by negative sentiment towards the recent Headwater acquisition as well as scepticism around the trajectory in the US housing market recovery.
Newdegate Absolute Return Fund

market response has improved. Since Ann in Nov, BLD risen from sub $5.00 to $5.80



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"Every long-term security is nothing more than a claim on some expected future stream of cash that will be delivered into the hands of investors over time. For a given stream of expected future cash payments, the higher the price investors pay today for that stream of cash, the lower the long-term return they will achieve on their investment over time." - Dr John Hussman

"If I had even the slightest grasp upon my own faculties, I would not make essays, I would make decisions." ― Michel de Montaigne
 
nipper
post Posted: Jan 21 2017, 10:40 AM
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While Kane has been working on the acquisition of the Salt Lake City-based Headwaters for some years — a deal that would have been done regardless of the election outcome — he says he had a day of worry that the deal might be scuppered as pundits predicted the US stockmarket would crash if Trump was elected.

But Kane now says a Trump presidency is good for the deal and Boral's expansion in the US. "If he cuts the corporate tax rate, it could be extraordinarily stimulatory for the US economy and for the construction markets in general," he says.

The purchase of Headwaters, a leading US manufacturer of building products and one of the largest marketers of fly ash in the US construction market, will more than double Boral's footprint in the US. Headwaters has annual revenue of $US1.1bn ($1.45bn) and earnings before interest, tax and depreciation of $US218 million.

The announcement of the deal on November 21 and a $2bn placement and rights issue to fund the takeover was greeted with scepticism by some analysts and sent Boral's share price downwards....

Kane says he understands that the size of the deal came as a surprise to Boral investors but believes analysts and investors are getting more comfortable with the bid as they learn more about Headwaters.

"We are starting to see a change in the attitude of some of the analysts as they learn more about Headwaters and the opportunities that it presents to us," he says. "In fairness, no one in Australia had ever heard of Headwaters.''

Kane had been looking at potential US acquisitions for several years given the lack of growth in Australian construction.

"Over the two years leading up to the deal I sent strong signals to the market that we were looking to invest in North America in fly ash and building products," he says. "But what they didn't grasp is that I did it all in one fell swoop. There was a sentiment that we would make a bunch of serial acquisitions. "We looked at doing this, but it would have been much more expensive and the quality of the target companies was not as good as Headwaters, which had everything wrapped up in one basket."

The deal, which still has to be approved by Headwaters' shareholders, is expected to be finalised around mid-year.
The Australian

Changing sentiment has sent Boral's share price up to $5.58 this week.



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"Every long-term security is nothing more than a claim on some expected future stream of cash that will be delivered into the hands of investors over time. For a given stream of expected future cash payments, the higher the price investors pay today for that stream of cash, the lower the long-term return they will achieve on their investment over time." - Dr John Hussman

"If I had even the slightest grasp upon my own faculties, I would not make essays, I would make decisions." ― Michel de Montaigne
 
nipper
post Posted: Nov 25 2016, 08:01 AM
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In Reply To: early birds's post @ Nov 22 2016, 08:01 AM

Boral Ltd (BLD) resumed trading following the completion of an Institutional Capital Raising at $4.80/share to fund its acquisition of US company Headwaters Inc . The Institutional Placement was oversubscribed and the Institutional Entitlement Offer had a 91% take up.

The Offers altogether raised $1.6bn, with another $483m expected to be raised from the Retail Entitlement Offer.

BLD declined $0.77 to close 13.3% lower at $4.99. - market is nervous about its success



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"Every long-term security is nothing more than a claim on some expected future stream of cash that will be delivered into the hands of investors over time. For a given stream of expected future cash payments, the higher the price investors pay today for that stream of cash, the lower the long-term return they will achieve on their investment over time." - Dr John Hussman

"If I had even the slightest grasp upon my own faculties, I would not make essays, I would make decisions." ― Michel de Montaigne
 
early birds
post Posted: Nov 22 2016, 08:01 AM
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In Reply To: nipper's post @ Nov 22 2016, 07:06 AM

The Australian company will fund the acquisition via a $A450 million institutional placement and a fully-underwritten $A1.6 billion 1-for-2.22 pro-rata rights issue, with the balance to be funded using existing cash ($US485 million) and a debt bridge facility.

Chief executive Mike Kane said the deal would provide cost savings of around $US100 million per annum within four years of closing.

"The businesses of Headwaters are highly complementary with Boral's existing US operations - in fly ash, roofing, stone and light building products," Mr Kane said in the statement.

Headwaters chief executive and chairman Kirk Benson said in the statement the combined group would be one of the “leading manufacturers and distributors of building products and construction materials for infrastructure, new residential, repair and remodel, commercial and institutional construction”.

Boral shares closed at $6.15 on Friday and trading was halted yesterday to allow the institutional issue to happen. The issue will be done at $4.80 a share.
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bet on on trump's infrastructure spending.

 


nipper
post Posted: Nov 22 2016, 07:06 AM
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In Reply To: mullokintyre's post @ Aug 27 2014, 01:18 PM

Boral Ltd (BLD) has entered into a binding agreement to acquire US company Headwater Inc. for AU$3.5bn, or 10.6x EV/EBITDA.

HW is a manufacturer of building products and one of the largest marketers of fly ash (a replacement for cement in concrete) in the US. In FY16 HW reported adjusted EBITDA of US$218m.

BLD expects US$100m p.a. of synergies within four years, and accordingly management expect the acquisition to be high single digit EPS accretive in the first full year of ownership.

The acquisition will be funded via an institutional placement, retail entitlement offer and existing cash and debt facilities.

- a bit of a Trump punt?




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"Every long-term security is nothing more than a claim on some expected future stream of cash that will be delivered into the hands of investors over time. For a given stream of expected future cash payments, the higher the price investors pay today for that stream of cash, the lower the long-term return they will achieve on their investment over time." - Dr John Hussman

"If I had even the slightest grasp upon my own faculties, I would not make essays, I would make decisions." ― Michel de Montaigne
 
mullokintyre
post Posted: Aug 27 2014, 01:18 PM
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In Reply To: arty's post @ Jul 14 2009, 07:24 PM

Wow! No postings on boral for 5 years???Mr Market was pretty happy with today's result.
Mick




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sent from my Olivetti Typewriter.
 
arty
post Posted: Jul 14 2009, 07:24 PM
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In Reply To: arty's post @ Jul 10 2009, 08:21 PM

Seems to work smile.gif
In at today's Open $4.07; current Stop $3.90.
If I were playing it under strict "uncertainty" rules, I'd lift the stop level to just below yesterday's High; that would give it the chance to close this morning's gap, while protecting my capital in a market situation that's still a far cry from Bullish.
The hurdle I see above could be as low as $4.25 - so: caution is still the order.
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I trade daily, but I am not a licensed adviser. Whether you find my ideas reasonable or not: The only person responsible for your actions is YOU.
I follow two rules: (1) There are no sacred truths. All assumptions must be critically examined. Arguments from authority are worthless. (2) Whatever is inconsistent with observed facts must be discarded or revised. We must understand the Market as it is and not confuse how it is with how we wish it to be. (inspired by Carl Sagan)
 
arty
post Posted: Jul 10 2009, 08:21 PM
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May still be early days yet, but BLD popped up on one of my Early Warning scans:

Volume is still declining; that's always a worry and needs compensation in other aspects of the chart.
One such positive signal would be the - still rather tentative short-term - Bullish MACD Divergence.
Note also how the recent 3-week falling trendline was broken today for the first time.

Obviously, nothing to rush into recklessly, but shall keep an eye on it.
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I trade daily, but I am not a licensed adviser. Whether you find my ideas reasonable or not: The only person responsible for your actions is YOU.
I follow two rules: (1) There are no sacred truths. All assumptions must be critically examined. Arguments from authority are worthless. (2) Whatever is inconsistent with observed facts must be discarded or revised. We must understand the Market as it is and not confuse how it is with how we wish it to be. (inspired by Carl Sagan)
 
 


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