Building products supplier Boral is on track to achieve its full year earnings guidance, with first quarter growth likely to continue.
Chief executive Mike Kane said prices are stronger for its construction materials and cement business in New South Wales and southeast Queensland but steady elsewhere.
"Based on the first quarter results, we are seeing an improvement in year-on-year results. The business is performing consistent with our expectations this year," he told shareholders at Boral's annual general meeting on Thursday.
In August, the company reported a near 50 per cent rise in full year net profit to $257 million, but had delivered a flat outlook for earnings in 2015/16.
The group's building products division improved its performance during the September quarter, with residential activity at strong levels.
Boral was able to effect price increases in the building products unit, as well as in the construction materials business, particularly in NSW and southeast Queensland.
It is also getting price increases in the US and Asian markets.
"Price is playing a role in our performance, as well as cost management. On average, we think prices will move up, but we will have more clarity on that as we get through the half year," Mr Kane said.
The company experienced lower demand from roads, engineering and major infrastructure projects this year, but has responded by taking costs out, and pushing through a number of surplus property sales.
Boral expects to benefit from a restructuring of its main construction materials and cement business, which contributes 60 per cent of the group's revenue.
It is focusing on growing margins and developing major project capability in the division.
The company expects a multi-year recovery in the segment later this financial year, led by major road projects.
On Wednesday, rival building products maker CSR, with whom Boral operates a brickmaking joint venture, had posted strong half year earnings and an upbeat outlook on demand, helped by a continuing housing construction boom.
Earlier, Boral's retiring chairman Bob Every told shareholders the company had a strong cash position but denied market talk of acquisition plans.
"We have a balance sheet where we can consider acquisitions over the medium term, but we don't have any significant acquisition in front of us," he said.
Boral shares closed 1.09 per cent lower at $5.45, in a weak market.
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