By Rhiannon Hoyle
SYDNEY--James Hardie Industries PLC (JHX.AU), one of the biggest makers of cladding for U.S. homes, raised its midyear dividend payout as it signaled increasing confidence in a housing recovery underway in the world's biggest economy.
The Australian-listed company reported a net profit of US$194.1 million for the six months through September, up from US$83.5 million a year earlier. The company said sales rose by 13% to US$764.2 million.
James Hardie, a major supplier of building materials from cladding to flooring, said it would pay investors a dividend of 8 U.S. cents a share, up from a 5-cent midyear payout last financial year. It also announced an increase in annual dividend payouts to 50-70% of net operating profit from this full fiscal year on, up from 30-50% currently.
The U.S. housing market has accelerated for much of the past year to become a key engine of growth for the economy, although there are signs rising mortgage rates and home prices are starting to pinch some buyers.
James Hardie said in a stock exchange filing Thursday it plans to increase spending in the U.S., betting the housing market rebound will continue.
"In anticipation of a continued recovery in the U.S. housing market, and further market penetration, we are investing in expanded production capacity," said Chief Executive Louis Gries. The board has signed off on plans to spend US$100 million increasing capacity at its Plant City site in Florida and Cleburne facilities in Texas, along with a refit of its Fontana fiber cement plant in California which is expected to reopen early next year.
James Hardie also reported better sales in its Australian and New Zealand divisions, where record- low interest rates are strengthening the housing markets.
The company forecast full-year earnings of US$180 million to US$195 million, up from US$140.8 million a year earlier. Those figures exclude payments to people made sick by asbestos products, asset writedowns, tax adjustments and other expenses, it said.
Write to Rhiannon Hoyle at firstname.lastname@example.org
Subscribe to WSJ: http://online.wsj.com?mod=djnwires