Boral sings Wagners tune

BUILDING materials supplier Boral has increased its reach to the Queensland resource sector with a $173 million concrete and quarries acquisition, as part of its long-term turnaround plan to focus on its core businesses.

The acquisition from Wagners Group, the largest privately owned construction materials group in Queensland, includes 19 concrete plants and five quarries in the Darling Downs region and in south-east and north Queensland.

The deal eliminates a cost-cutting competitor and increases Boral's market share in the state, which is booming through increased investment in its coal seam gas and LNG industries. Boral said the acquisition would be earnings accretive by next year.

''It ticks a number of boxes,'' said Boral chief executive Mark Selway. ''It gives us a great position in that growth corridor in the south-east of Queensland.''

But analysts yesterday expressed concern over the price.

''Strategically, it could be justified in some ways, but we just think it looks expensive,'' said Deutsche Bank analyst Emily Behncke.

The purchase is the latest in a string of deals under Mr Selway since he began the company's turnaround strategy last July. Proceeds from the sale of non-core, underperforming assets such as the Girotto and Gocrete precast panels businesses, and its formwork and scaffolding business, have been reinvested in core operations.

The Wagners purchase also increases Boral's exposure to the state's flood rebuilding efforts, with up to $4 billion expected to be spent on rebuilding damaged roads alone.

But Mr Selway said he was worried over ''some real softening'' in residential housing markets, particularly in Western Australia and South Australia.

''I think it's a reflection that consumer confidence isn't quite where it needs to be,'' he said. ''So we're very fortunate that we've got some large infrastructure projects going on and we've got the rebuild in Queensland, and all that is supporting the expectation for the full year.''

Boral is forecasting a full-year net profit of between $160 million and $175 million.

Boral shares gained 4? to $5.09.