My Company Boral LTD

I originally created a page for my company, but somewhere, somehow at some point in time, I think I accidentally deleted it….

I didn’t realise until I received a comment back from another student asking if I had written anything for step 3.

So, here is take 2 on my company, Boral LTD.

Having just completed ACCT 11059, I felt a sense of deja vu when commencing this assignment. Clicking on the spreadsheet to find out what my company was for this subject I felt hopeful and exciting. I was dreaming for an interesting company. Last semester, I had a German company that manufactured fuel pumps, which was a bit dry. Naturally, I was disheartened when I found out that I had been assigned the company Boral.

My first thought was that it sounded familiar, but I didn’t know why. I went to their website straight away to check them out. I was further disheartened to find it was a manufacturing company. I recognised their logo, but couldn’t explicitly state why. I’m sure throughout my life I had seen somewhere and some point in time.

I took the time to create a page on my blog about my company hoping to get some feedback.

About a week later, I received an email from another student hoping to give me feedback, and they were asking if I had done any work on step 3. While I hadn’t formally written a word document at that point, I had written a post on my blog. I went to my blog to check it out, and to my horror, all the information I had written about my company had vanished. The page which I had thought was a link to my company information, linked to my blog, which had my step 4 and step 5 posts, but no information about my company. I have struggled to make my blog and maintain/edit/post to it. And, it seemed I had, at some point, deleted my information on my company without even realising.

So, lets’ start again.

Boral is an international building products and construction materials group. Their website states they have three divisions: Boral Australia, which is a material business; USG Boral, a plasterboard joint venture in Asia, Australia and the Middle East; and Boral North America, which is a building product and fly ash business.

My questions after reading this were – what materials in Australia do they do business in, what does plasterboard joint venture mean and what on earth is fly ash?

To answer my questions:

  • In Australia, Boral supplies concrete, quarry products, asphalt, cement, roof tiles, timber and masonry to building infrastructure, residential construction and commercial companies.
  • Plasterboard joint venture is a joint venture between the company USG and Boral who together supply plasterboard (dah).
  • Fly ash is a coal combustion by-product in power stations. Fly ash is added to concrete to improve its overall quality and performance.

There you go. Unfortunately I still feel bored. Time for a video:

One thought I do have is that, this company has probably been around a while and will continue to stay due to the materials it supplies as personally, I consider them to be quiet essential to the building industry.

Boral employs more than 26,000 employees and contractors and its operations span over 826 buildings and construction material operating and distribution sites globally.

Their annual report highlights multiple business goals which are:

  • Driving safety outcomes towards the world’s best practice based on zero harm today;
  • Investing in people to enable them to deliver the best;
  • Minimising their environmental footprint and building resilience to climate-related impacts;
  • Delivering superior performing, innovative and sustainable products and solutions for customers; and
  • Operating ethically and making a positive contribution to local communities.

I think to myself that these goals sound pretty impressive. Boral cares about people and they care about the planet.

Digging deeper into their website, I found that Boral has been around since the 1940s. It’s main business at this time was manufacturing bitumen from imported crude oil. Quickly they realised that they would not be able to make a profit on this due to the fact they relied on imported oil and did not own any oil refineries.

Boral appears to have an extensive history of chopping and changing between a particular product of focus.

Eventually they moved away from oil, purchasing quarries and developed into the manufacturing company they are today.

For 2019, they report a $440 million profit, but advised this was down by 7% from the previous year. Although, revenue was up by 4%.

The majority of their revenue comes from the Australian side of their business, with north America second and USG third.

Projections for 2020 for Boral Australia are that they expect to have another net profit drop between 5-15%. This is anticipated due to the slowing down of residential construction and there is not enough infrastructure projects to offset this decline. This projection is the same for USG Boral.

Boral North America is expected to deliver earning growth.

However, as a result of the recent economic changes due to the current spread of the Coronavirus and the implementation of social distancing, my guess is that these predictions will change. I would not be surprised if profits fell further and the expected earnings growth from Boral North America will no longer be achievable.

Total liabilities for 2019 was less when compared to 2018 and 2017. Total equity and assets were stable and cash reserve was higher in 2019 when compared to 2018.

My impression of Boral LTD is that it is a solid company that has had a solid performance in the past, though reporting a noted and expected decline in profits in the future, which is not a surprise given the current state of the economy and the overwhelming threat of a recession that has been looming for some time.

Their share price held strong through the period of 2018 but has taken a steady decline in the last 18 months. In particular, the value of their share price has declined by approximately 30 percent in the past 3 months. As a result, they are currently reporting a 10% dividend yield which is quite strong with a dividend history of dating back a number of years that shows an increasing dividend over time. The exception is their 2020 dividend, which has been reduced. This is the first reduction of their dividend, which may signify tough times are ahead.

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