James Hardie shares jump after indicating $25m in annual savings
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More news: Shares of James Hardie rose after the company announced that it would shut its US manufacturing facilities within the next 60 days, a move expected to generate annualised cost savings of around $25 million from the first quarter of FY27.
Shares rose 1.80% to $35.62 per share at 12:36pm AEDT.
RBC Capital analyst Matthew McKellar noted a neutral initial reaction in James Hardie's shares but expected a slightly positive response over time, supported by the re-affirmed guidance and the cost savings benefits from facility closures. He set the price target to $33 per share.
James Hardie to shut US plants, eyes $25m in annual savings
The news: Building product manufacturer James Hardie has taken steps to optimise its manufacturing footprint by shutting down its facilities in Fontana, California, Summerville and South Carolina within the next 60 days.
The Fontana site's innovation and research & development functions will remain in operation.
The context: James Hardie expects the site closures to generate annualised cost savings of approximately $25 million from the first quarter of fiscal year 2027. The company said the savings will be driven by reduced fixed costs and improved utilisation across its remaining manufacturing networks.
James Hardie expects to incur one-time pre-tax charges of approximately $40 million to $44 million, consisting of employee severance, and benefits, transition- related costs, facility exit costs and other non-cash charges, to be recognised in the fourth-quarter of FY26.
The company reaffirmed its third-quarter and full year FY26 guidance in conjunction with its second-quarter earnings results.
What they said: "Following a comprehensive review of our manufacturing network, we have decided to transfer more production volume to our modern, advanced plants. These actions will further improve our cost structure, increase productivity, and reinforce the Hardie Operation System," James Hardie CEO Aaron Erter said.
"Our focus remains on driving sustainable growth and value creation over the long term."
The source: ASX
