Boral to return $3bn to shareholders after US exit

Building products group Boral will return $3 billion in ‘surplus capital’ to shareholders marking the end of a sales spree of key business forced on it by a disastrous foray into the North American market.

CEO Zlatko Todorcevski, who replaced Mike Kane in the top job following its US troubles, characterised the return as a focus on disciplined capital management.

However it is as much an admission that Boral is not the company to best use the cash freed up by the sale of its North American building products business, 50 per cent owned Meridian Brick business and its Australian building products businesses.

Todorcevski said: “In the 12 months following the sale of USG Boral and culminating with the announced sale of Boral’s North American fly ash business, we have completed an extensive portfolio realignment, unlocking significant value for shareholders.

“Our reshaped portfolio allows us to focus on strengthening the performance of our core Australian construction materials business.”

In December Boral entered into agreement to sell its US fly ash businesses and in October Boral also agreed to sell its half share in USG Boral for $1.43 billion.

USG Boral was the company’s venture with Germany-based Gebr Knauf KG, which includes the important plasterboard businesses in Australia, New Zealand, Asia and the Middle East.

Boral purchased US business Headwaters in 2017, but by 2019 serious financial irregularities had been found inside its North American windows business.

The irregularities relate to inventory levels, raw materials and labour costs.

With US profits ‘inflated by design rather than a processing error’, according to media reports at the time, this called into question the financial controls inside the company.

Picture: Boral

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