Boral Steps Closer To Its Future Slimmed Down and Refocused State With The Fly Ash Up For Sale

Boral has confirmed its future state as an Australia-focused construction materials player once again, having announced its fly ash business is now on the market. With the sale of the North American building products division announced in late fiscal 2021, the strategic slimming down of the group is nearing completion. We continue to be in favour of the significant slimming down and refocus that is underway, with Boral to retain and focus on its core, that is advantageous to the Australian construction materials franchise. Full-year fiscal 2021 operating income of AUD 421.00 million, inclusive of the final contribution profits from the USG Boral joint venture, which was divested in March 2021 and excluding one-time profits from property, tracked our expectations for the no-moat stock. While the top line was hampered by coronavirus disruptions to construction, EBIT from continuing operations rose as Boral delivered against its AUD 125.00 million cost-out target for the Boral Australia business. We make no change to our AUD 7.40 per-share fair value estimate. Shares in the no-moat stock trade at a 12% discount to our unchanged valuation.