Global plan stirs growth at James Hardie with a reporting twist

The building supplies group raised full-year guidance after potentially releasing results early in overseas markets.

James Hardie’s results issued to the ASX showed that sales for the nine months to December 31 rose 3 per cent to $US1.933bn ($2.88bn) as net profit for the period lifted 3 per cent to $US235.2m. Picture: Supplied

Buildings supplies company James Hardie blamed an unexplained “clerical error” for putting it in the embarrassing position of releasing its latest financial results early, due to fears the financial details of its performance over the third-quarter and nine months to December had leaked into the market.

However, there was some good news as the building supplies group raised its full-year guidance.

Shares in James Hardie were placed in a trading halt on Tuesday, with the company stating it was a result of a “clerical error” which had potentially led to the release of its earnings materials in overseas markets.

“While we do not believe that any public dissemination of this information has occurred at this time, we have requested this halt in an abundance of caution.”

James Hardie vice president of investor and media, Jason Miele, declined to detail to The Australian the nature of the “clerical error” and how it might have seen the company’s financial results put out early. James Hardie is expected to make further statements on this issue on Wednesday.

Meanwhile, James Hardie’s results issued to the ASX showed that sales for the nine months to December 31 rose 3 per cent to $US1.933bn ($2.88bn) as net profit for the period lifted 3 per cent to $US235.2m.

Group adjusted net operating profit for the third quarter, at $US77.4m, was up by 17 per cent, with third-quarter sales rising by 5 per cent to $US616.7m.

Among its key divisions, North America fibre cement volumes increased by 11 per cent for the quarter and 7 per cent for the nine months, while Asia Pacific fibre cement volumes were down 4 per cent for the quarter and down 2 per cent for the nine months. For its European building products division quarterly volumes slid 2 per cent.

James Hardie chief executive Jack Truong said he was very pleased with the third-quarter performance that delivered adjusted net operating profit (NOPAT) and group adjusted EBIT growth of a respective 17 per cent and 18 per cent.

“This was the third consecutive quarter of strong financial results as our teams continue to execute our global strategic plan. The continued profitable growth momentum has led us to again raise our full-year adjusted NOPAT guidance range, to between $US350m and $US370m.”

He said the company’s North America fibre cement segment stood out in delivering exceptional performance in the third quarter.

“North America exteriors volume grew 13 per cent as our commercial transformation continues to gain traction with our customers and end-users. Additionally, our interiors business continued to improve and delivered volume growth of 3 per cent. Our lean transformation is trending ahead of plan. We have now implemented Hardie Manufacturing Operating System in all 10 plants in North America.”

The Australian business continued to perform well, Dr Truong added, and delivered profitable growth in a contracting market.

“Globally, our teams are executing our strategic plan, resulting in strong financial results in each of the last three quarters. We continue to invest in the long-term growth of our company with a focus on delivering more value to our customers through increased demand creation, consistent product quality, on-time delivery, and customer-driven innovations.”