The Boral Limited (ASX: BLD) share price will be on watch this morning following the release of an update ahead of the building and construction materials company's annual general meeting.
What did Boral announce?
As well as providing investors with a reminder of its performance in FY 2019, management updated the market on trading so far in FY 2020.
In respect to the former, Boral faced challenging trading conditions in FY 2019 due to a combination of factors. These include a sharp drop in housing starts and lower value road works.
In response to this, Boral reduced its costs, resized activities, and sought new opportunities to grow revenues. This led to the company delivering a 4% increase in revenue to $5.8 billion and a 2% increase in EBITDA.
Will FY 2020 be better?
As expected, the tough trading conditions have continued in the first quarter of FY 2020.
CEO Mike Kane said: "We have seen volume pressures in several businesses and in addition to the improvement initiatives already underway, we have considerably increased efforts to reduce costs and improve earnings through more extensive business improvement initiatives, which will benefit results in the second half."
Boral Australia saw lower earnings in the first quarter of trading and a $10 million earnings impact from disruptions at Peppertree and Berrima.
Across the pond, first quarter earnings from Boral North America were slightly lower than the prior year. However, early signs of the US housing market improving are yet to flow through, but should benefit its second half results. The USG Boral business is also underperforming, with first quarter earnings slightly lower than last year.
As a result, the company has reaffirmed the FY 2020 guidance provided in August. It continues to expect NPAT (before significant items) to be around 5% to 15% lower in FY 2020. This guidance reflects lower earnings and higher depreciation charges.
Boral isn't the only company holding its annual general meeting today. Both Estia Health Ltd (ASX: EHE) and Corporate Travel Management Ltd (ASX: CTD) are holding their respective meetings and are likely to provide trading updates.
