Shares down and dividend scrapped at Adelaide Brighton

One of the largest suppliers of concrete and cement products in the country has announced a second profit downgrade in three months and scrapped its interim dividend leading to its share price to fall.

If you’re scratching your head, you’re not alone.

Amidst an infrastructure boom and a recovering mining sector it seems counter-intuitive that the materials sector would be facing economic headwinds, but here we are. According to its December 2018 investor presentation, the company has a revenue split of; 32% Engineering Construction, 32% Residential, 22% Non-Residential and 14% Mining Operations. The downturn in residential construction is well documented but it seems unlikely that this alone would offset the companies other sector exposure. Perhaps what we are actually seeing is a real impact from the numerous project delays well documented in the infrastructure build – from Sydney Light Rail to Melbourne Metro and the Westgate Alternative, the company would certainly have expected these to be demanding significant product by now.

***Please note that this is an option piece and does not, and is not intended to represent, financial advice in any way.

Read more at yahoo here.

Read more at the AFR here.

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