James Hardie shares have climbed after the building products maker reported a strong jump in half year operating profit.
Investors bought into the company despite no changes to its full year profit guidance, and a cautious approach to the US housing recovery.
Underlying operating profit in the six months to September 30 jumped seven per cent to $US115.5 million ($A124.97 million), compared with the same period in 2013.
James Hardie shares gained 52 cents, or 4.3 per cent, to $12.52.
IG markets strategist Evan Lucas said strong sales of fibre cement in the US and Europe underpinned the profit growth.
“A really strong number,” he said.
“It’s a very positive step in the right direction for them.”
James Hardie maintained full year profit guidance of between $US205 million and $US235 million.
Chief executive Louis Gries said he was cautiously optimistic about the US housing market, where the company derives much of its earnings.
“Housing is not recovering at the anticipated rate,” he said.
“We believe that housing is going to continue to increase rather than go into a downturn.”
Australian sales are expected to improve, as demand for detached housing grows.
But Mr Gries said James Hardie wasn’t as well placed to capitalise on rising apartment building activity.
“It doesn’t play as well to our strengths as we’d like,” he said.
JAMES HARDIE CEMENTS EARNINGS GROWTH
- Half year net profit of $US156.1m, down 20 pct from $US194.1m in 2013/14
- Operating profit of $US115.5m, up 7 pct from $US108.3m
- Net sales of $US857.2m, up 12 pct from $764.2m
- Interim dividend of 8 cents per share, unchanged