16 Jan 2013

Shares rise as Boral cuts 700 jobs

1:02 pm on 16 January 2013

Shares in building products maker Boral rose on Wednesday to their highest level in 18 months after the company announced 700 job cuts as part of a company-wide restructure.

Boral will make 700 redundancies from all levels of its business - from executive level down to its manufacturing businesses - a move it expects to save $90 million a year.

New chief executive Mike Kane said it was time "to make some tough decisions" to increase the company's competitiveness in challenging times.

"This is a great company, with a great history and great potential," he said in a statement on Wednesday.

"However, over time, it has become burdened with excessive overhead costs. While this may be less obvious during the good times, it becomes critically exposed when times are tough."

AAP reports Boral shares were up 22 cents, or 5.05 per cent, at $A4.58 at 10.13am AEDT - their highest level since June 2011.

Of the 700 redundancies, AAP reports 200 have already occurred and the remainder are expected to be completed by March.

Other recent moves to outsource production take Boral's total job cuts in the 2012/13 financial year to 1000.

Boral expects redundancies to cost it $A60 million in the 2012/13 financial year.

The company makes building products for homes such as bricks, roof tiles and doors, as well as materials for larger construction projects, such as concrete and stone.

It is under financial pressure due to a prolonged slump in housing construction and delays to major construction projects.

Boral's earnings in its Australian operations in the 2011/12 financial year were down 29 per cent from the previous year.

AAP reports Mr Kane began a 100-day review of Boral soon after his appointment in September 2012. Several senior executives have already been removed.