Building products supplier James Hardie will buy back up to $US100 million of its shares over the next 12 months.
James Hardie is also expecting to see moderate growth in the US housing market and growth in Australian sales in fiscal 2017, after a 16 per cent drop in annual year net profit in 2015/16 to $US244 million ($A338 million).
The result for the year to March 31 was weighed down by an increase in interest rate costs of about $US55 million, and higher interest expenses.
The strengthening US dollar had an unfavourable impact on net sales of about four per cent.
But James Hardie’s operating businesses performed well, with higher sales volumes of fibre cement in North America.
The Asia-Pacific – excluding the Australian Pipes business that was sold in the first quarter of fiscal 2016 – generated higher volumes and benefited from increased prices.
In adjusted terms, James Hardie’s full year operating profit was up 10 per cent at $US242.9 million.
“Overall, I think we finished a good year,” chief executive Louis Gries said.
Increased sales in North America were primarily driven by growth in the renovation and new construction markets.
In the US, single family housing starts were 17 per higher for the year.
James Hardie said asbestos related claims received in the year were 13 per cent lower at 577 – below actuarial estimates of 658.
The average claim settlement was $A248,000.
Looking ahead, earnings from the group’s fibre cement operations in North America and Europe are expected to grow, and margins are to remain at the high end of a target range of 20 to 25 per cent.
Sales in Australia are expected to trend ahead of the average growth in the renovation and single detached housing markets in the eastern states.
STRONGER BUILDING ACTIVITY LIFTS JAMES HARDIE’S SALES
- Net profit down 16pct to $US244.4m
- Net sales up 4pct to $US1.73b
- Final dividend up two US cents to 29 US cents