Boral (BLD) announced to the market this morning a significant cut to its full year profit guidance, with Q1 2012 NPAT (net profit after tax) down to$22 million, due to “a number of variables” – namely weak housing activity in QLD and NSW, but as with Stockland’s (SGP) recent warning, the impact of heavy weather in recent months also taking its toll.
This is a weighty downgrade, as forecast full year net profit was supposed to be in the $150-$175 million range, now cut back to $128 -153 million.
The question is can a lift in the heavy weather lift the company’s performance? It seems very unlikely, with new housing construction still at anemic levels, as shown by the Unconventional Economist recently – with warning signs in Victoria:
And hoping for an uptick in non-residential, non-mining construction would be just that – hope, with enormous amounts of demand brought forward by stimulus, it will require either the same amount of fiscal (off the table) or monetary (possible, but not quickly or in large amounts) to do so:
Shares in Boral have opened down over 3%, with the share price down 60% from its peak in 2006. Seems to resemble the chart above no?