Adelaide Brighton forecasts lower annual profit

The building materials supplier expects a drop in annual profit, after half-year earnings sank 6.7pc.

Adelaide Brighton CEO Martin Brydon: still bullish despite profit outlook.

Building materials supplier Adelaide Brighton said its annual net profit is likely to fall as it doesn’t expect to make as much from property deals this year, but management offered an otherwise bullish outlook with price rises looming for several key products.

Adelaide Brighton (ABC) said it expects net profit for the year through December of between $190 million and $200 million. At the top end of the range that would represent a 3.8 per cent decline on the $207.9 million reported for the 2015 financial year.

The company said it expected property transactions to contribute $7 million to its annual net profit this year, down from nearly $35 million in 2015.

“We look forward to a solid finish to the year and to maintaining our practice of enhancing shareholder returns through improving business profitability and active capital management as we continue to realise the benefits of our long term growth strategy,” chief executive Martin Brydon said.

Adelaide Brighton today reported a half-year net profit of $77.1 million, down 6.7 per cent on a year ago. After stripping out the impact of property transactions, the company’s earnings were 7.8 per cent higher than a year earlier.

The company said it would pay an interim dividend of 8.5 cents to shareholders plus a special dividend of 4 cents a share.

Mr Brydon said annual sales volumes of cement and clinker were likely to be below 2015 levels, but volumes of prefixed concrete, aggregates and concrete products should be significantly higher than a year earlier.

Also, the company expected higher prices of several products in the second half of its financial year, citing strong demand and industry utilisation in several key markets.

Dow Jones