Boral is another stock I keep my eye on. Since I made my basic fundamental analysis of BLD’s last full year financial report, on 7 February the company released their interim results for FY2007. The facts are as follows:
Results for half year ended 31 December 2006
- Revenue up 6% to $2.5 billion
- Profit down 15% to $147 million
- Interim dividend 17 cents (same as this time last year)
- Balance sheet: Working capital of $618.7mil versus total debt of $1,636.3mil ($17.1mil decrease in total debt)
Reasons given by the management
- Building products in Australia facing difficult housing market conditions
- US housing market sharp downturn
PROS AND CONS
+++ Long established business, major player in its industry
+++ Good balance sheet for company of its size
— This CYCLICAL stock is now facing downturn in their industry
— Decrease in the available cash not entirely offset by decrease in the long term debt
— Issuing new shares and hence decreasing the value of existing ones
— Takeover speculations are pushing the stock to new highs despite the lower earnings and tough times ahead
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