James Hardie Industries Plc (JHX)



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General Information
Company Name: James Hardie Industries Plc
Stock Code: JHX
Website: www.jameshardie.com
GICS Sub-Industry: Construction Materials
Market Cap ($M): 5,579
Equiv. Shares (M): 445

Current Price Data+
Current Price Open High Low Last Close Volume Price Movement
 $ 12.420 $ 12.400 $ 12.490 $ 12.260 $ 12.540 2,690,120 $ -0.120  -0.957 %

Current Broker Consensus Recommendation more
Recommendation: Buy (1.6667)
Recommendation Date: 12th Sep 2014
Brokers Surveyed: 3

Company Overview

Business Description:
James Hardie Industries Plc (JHX) is involved in the residential and commercial building industries. JHX's flagship product is fiber cement, with applications in external siding, internal walls, ceilings, floors, soffits and fences. Its products and services include exterior products, Colorplus Technology, interior products and weather barrier. The principal markets are the US, Australia, New Zealand, the Philippines, Canada, and Europe - UK and France.

Strategy Analysis:
JHX is focused on aggressively growing primary demand for products in the targeted market segments; growing overall market position while defending existing market segments; offering superior comparative value to that of competitors; and continually introducing differentiated products to improve product mix and increase margins. The company aims to maintain its competitive advantage through continual investment in research and development and the introduction of higher priced and higher margin differentiated products. A zero landfill target to limit waste in the production process assists overall margin management. Excess free cash flow is returned to shareholders. James Hardie Industries reported NPAT down 35% to US$83.5m for the half-year ended 30 September 2012. Revenues from ordinary activities were US$674.1m, up 4% from the same period last year. EBIT excluding asbestos and ASIC expenses decreased 10% to US$103.6m. EBIT including asbestos and ASIC expenses decreased from US$161.1m to US$105.3m. Diluted EPS was 19.0 US cents compared to 29.2 US cents last year. Net operating cash flow was US$7.8m compared to US$37.1m last year. The interim dividend declared was US 5.0 cents compared with US 4.0 cents last year. The company noted the range of analysts' forecasts for net operating profit excluding asbestos for the year ending 31 March 2013 is between US$147.0m and US$178.0m.


Financial Summary
Year to Mar NPAT EPS EPS chg (%) PER DPS Yield (%) Franking (%)
2016  F 269.8 62.0 17.0 20.2 36.7 2.9 0.0
2015  F 233.3 53.0 14.7 23.7 31.1 2.5 0.0
2014  A 205.5 46.2 44.6 24.1 41.7 3.7 0.0
Source: Morningstar analyst estimates.

Peer Comparison
EPS Growth (%) P/E (%) Dividend Yield (%)
Company Mkt Cap 2014 A 2015 F 2016 F 2014 A 2015 F 2016 F 2014 A 2015 F 2016 F
Adelaide Brighton (ABC) $2,255 M -0.0250 0.0419 0.0820 15.0427 14.4381 13.3434 5.54 4.72 5.11
Boral (BLD) $4,109 M 0.0862 0.7520 0.3207 32.3077 18.4405 13.9628 2.86 3.90 4.28
CSR (CSR) $1,786 M 1.1430 0.6318 0.1473 24.8067 15.2024 13.2508 2.83 4.36 5.42
Fletcher Building (FBU) $5,565 M 0.0652 0.3571 0.1207 18.9817 13.9869 12.4807 4.13 4.67 5.01
James Hardie (JHX) $5,690 M 0.7887 1.1698 0.3049 52.4610 24.1777 18.5282 7.46 2.66 3.76

Market Comparison
Earnings P/E Ratio P/B Ratio P/E Growth P/S Ratio
JHX -- 33.4 -25.9 0.49 3.43
Market 0.99 15.9 1.29 1.76 1.56
Sector 0.80 12.1 0.71 1.04 5.36

Directors
Name Position Start Date
Mr Louis Gries Chief Executive Officer 22 October 2004
Mr Russell Chenu Executive Director 15 August 2014
Mr Michael N Hammes Non-Executive Chairman 07 February 2007
Ms Alison Littley Non-Executive Director 27 February 2012
Professor Brian D.O Anderson Non-Executive Director (other) 14 December 2006
Mr James R Osborne Non-Executive Director (other) 13 March 2009
Mr David D Harrison Non-Executive Director (other) 19 May 2008
Mr Rudy M J Van Der Meer Non-Executive Director (other) 07 February 2007

Management
Name Position
Russell Chenu Chief Financial Officer
Natasha Mercer Company Secretary
Mark Fisher Executive General Manager
Joe Blasko General Counsel
Sean O'Sullivan Vice President - Investor & Media Relations

Substantial Shareholders
Holding Name
27,010,612 (6.12%) Capital Group Companies Inc
31,301,628 (7.09%) Baillie Gifford & Co
22,196,091 (5.03%) BlackRock Group
34,442,731 (7.80%) Commonwealth Bank of Australia
33,594,049 (7.61%) Lazard Asset Management Pacific Co
28,198,184 (6.38%) National Australia Bank Limited Group
24,136,828 (5.47%) Schroder Investment Management Australia Limited
38,801,469 (8.79%) FMR LLC and FIL (formerly FMR Corp and FIL)

Calendar of Events
Date Event
26 June 2015 Report (Annual)
21 May 2015 Report (Prelim)
13 November 2014 Report (Interim)
© 2011 Morningstar, Inc. All rights reserved. The data and content contained herein are not guaranteed to be accurate, complete or timely. Neither Morningstar, nor its affiliates nor their content providers will have any liability for use or distribution of any of this information. To the extent that any of the content above constitutes advice, it is general advice that has been prepared by Morningstar Australasia Pty Ltd ABN: 95 090 665 544, AFSL: 240892 (a subsidiary of Morningstar, Inc.), without reference to your objectives, financial situation or needs. Before acting on any advice, you should consider the appropriateness of the advice and we recommend you obtain financial, legal and taxation advice before making any financial investment decision. If applicable investors should obtain the relevant product disclosure statement and consider it before making any decision to invest. Some material is copyright and published under licence from ASX Operations Pty Limited ACN 004 523 782 ("ASXO"). DISCLOSURE: Employees may have an interest in the securities discussed in this report. Please refer to our Financial Services Guide (FSG) for more information at www.morningstar.com.au/fsg.asp.

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