JHX -6.18%: Hit today on weaker guidance for FY26, following an inline FY25 financial result.
- FY25 Adjusted net operating profit $644 million, down-9% y/y, inline with consensus
- FY25 Adjusted Ebit $863.2 million, -8.2% y/y, largely inline with expectations for $866.8 million
They met expectations for FY25 on better performance on costs and lower stock based compensation, which makes it a lower quality ‘meet’, while the guidance for FY26 was also the issue, as was the Q4 momentum which was softer than expected. For FY26 they see Adj Ebitda growth of low single digits which was ~7% below expectations (mkt looking for 12%).
While the macro backdrop has clearly created some headwinds for JHX, this was fairly well known, with softer FY26 guidance not a total surprise. That said, the trends are weaker than we hoped with the company saying; “We are prudently planning for market volumes to contract in FY26, including a fourth consecutive year of declines in large-ticket repair and remodel activity.”
In terms of the Azek acquisition, while unpopular, they’re pushing ahead with it, and in time, this will drive better growth at the group level, however, we can’t help but think the acquisition is as attempt to take the focus away from their core business, which seems to be more challenged.
MM remains long JHX for now
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