We get started here. I’ll just do a quick overview at our business and then I’ll cover most of the details. I think most of you have seen the result came in very consistent to what we’ve had in other quarters. So the year has been a very consisting year for us. Growth rates have been about the same right through the year and our bottom lines were good right through the year. So just I’ll go through Slide number Six here, so like I said 9% and 11% for the quarter and full year. Operating profit was better in the fourth quarter and we’ll talk a little bit about the bottom line improvement we got in the fourth quarter relative to what we’d had in first three quarter. We announced our dividend today. We’ve had higher volumes in selling price across the business. Basically the theme is everything is working well, so that’s price across volume right through all the businesses. We are growing faster in market index. In the U.S. we’d like to be where actually we’re working now on getting it up two or three point from where it’s been in the last eight quarters or so, but we are growing above the market index. Even margin as you can see fell right in the middle of our 20 to 25 range and we’re offsetting capacity. So we started up Carole Park recently, so we’re good on Australian capacity and we’ve got Cleburne and Plant City ready to go in the U.S., so we’re good there as well. These are showing the numbers for the quarter, 41% improvement on EBIT versus the 20% for the year. Obviously the effect on the EBIT margin, operating profit 26% and 12%, so again the quarter and bottom line was stronger…

Good morning. So a summary of the Group results as Louis already talked about earnings were really effected by good volumes, average selling price in both segments, those partially offset by some input cost mainly market related, raw materials, partially offset by some improvements in our plants particularly in the last nine months of the year between than they do in the first quarter. And then we continued to invest in the organization and that both in capability and in growth and that resulted in higher organizational spend in dollar. As a percent of share, it’s actually down a little bit. Net operating cash flow is about 180 million for the full year that was compared to 322. We’ll go through in a little bit, that’s primarily as Louis said the AICF payment we made last July, some working capital year-on-year. So we’ll go through that. We had about 276 million last year in capital expenditures, those basically in line with where we had guided. Throughout the year, almost 180 of that was CapEx related and the remaining balance was maintenance CapEx if you will. We now total - announced dividends of 120 for the second half and 98 for the special for the year. Okay, so for the fourth quarter, we’ll just walk down the pace of the P&L on a reported basis for both fourth quarter and full year and then on adjusted basis. So net sales up 9, you can see gross margins - profit margins. I’ll show you another chart in a minute on those, up about almost 400 basis points, 380 basis point really a combination of volume and scale on the plants, plant performance, average net selling price and then offset by input cost that we talked about. SG&A spend up primarily on labor…

Thanks everyone and thanks very much, Louis and Matt and just a couple of questions. So may just firstly on the margin in Q4. I think in information, you indicated about 2.6 percentage points came from pricing. I am just wondering if you can break that down a little bit for us because obviously there was about 3% price increase that you guys took March 1, how of that is market price increase and how much is mix, because obviously March 1 was only one month in the quarter, so probably wasn’t all that? And then just looking at the 2% to 3% expectation for pricing in FY ‘16, I am wondering if you can sort of overlay something around how you are going in terms of gaining share against PDG?

Okay. As far as the pricing, I mean not a large change in the business over the last couple of year. So we’ve got the improvements in tactical pricing which are basically I think behind us so that is one thing that kind of almost run its course probably pretty close to fully run its course. So then you left with mix and market price. We haven’t taken anything into your product line and then on the exterior product line, we took a small increase March 1st so some of that would be in this result how much I am sure. But I think where you probably going to see going into ‘16 is maybe third of increase be in mix and two thirds be in the market price we took. So if it falls around three, obviously year-over-year segment makes us geographic mixes and all that, but we don’t worry about that too much, they pay even out overtime. As far as market share in LP, if you look at quarter-to-quarter, it’s pretty confusing but if you look at full year, full quarter rolling, we are basically in the same area as far as market share growth or volume growth whatever you want to call. We have different market indexes, but I am not sure whose market index is necessarily higher at this time. We don’t get information on their OEM business which is a shed. So they are working new construction sheds, they work more trend Trim we work more blanks, they work more Trim. So the market indexes are bit different. The reality is we’re coming up with a very similar result when you are even at not over four quarters. How long that continues that way I just can’t predict. The other thing is we can’t…

And what do you think your PDG was in FY ‘15?

I think it came in between 7 and 8 and we’d looking for 8 to 10, 9 to 11 something like that. Now I do need to tell you, usually when before in the quarter I gave you kind of an indication of where we are kind of right now, what are order file. And usually we are either right where we think we should be a little bit ahead. And this time we’re a little bit behind where we think we should be. Now I want you to know I don’t think there is any place for that business to go, so I think it’s kind of a just a market thing as far as our price increase, the spring build, where the dealers think the markets going to come out. So I think our volume comp in the first quarter will be relatively weak, that super weak, I don’t think but relatively weak. I think it won’t be reflective in our bottom line. I think our bottom lines be in really driven now by the fact that the price is very consistent and the cost if come to a lower level on the business. So I think our bottom line doesn’t rely as much on volume as it did six or eight quarters ago, but for the full year, I am looking for it’d nice if we get the 10% PDG, that’s what our aim for. And we set most of programs in the business to accomplish that and we just see if we can do it.

Okay, thank you.

Good morning. Andrew Peros, Credit Suisse. Louis, can you just talk about your volume growth in terms of exteriors and interiors. I think in the past you had a bit of an issue with interior kind of business, so if you could give us some feel for how that’s going, that would be great?

Yeah, now we’ve - we did have a kind of market share problem developing in the interiors business where we are experience decline in market share, probably lasted eight quarter or so. And I hate to admit it but which just probably management attention more than anything. So since we’ve - within those programs, we are back in positive growth with interiors. I am not sure in the market share growth for interiors right now is much as I am sure because I can measure it exactly that were comp and better than last year in interiors. I think we are pretty - coming pretty close to market share growth in interiors. There is not lot upside. I think most of you know on cement, Backer boards in U.S. we’re already over 40 and there is a lot of the participants in the field. So there is not upside like there is on the 35.90 on exterior side, but we are back in positive growth. Now having said that exteriors run a way harder than interior, so most of the use 25% is our estimate of interiors revenue, so if you figure, most of that’s growing - most of the 25s or the 25s growing very solid and the 75 is growing a lot like quicker than the nine. So and that’s how we measure PDG. PDG is an exterior calculation that doesn’t include interiors.

I am Michael Ward from CBA. And I am just - you are selling Cleburne, can you just sort of talk through, I mean you are always pretty sacred about your assets, so I was wondering how you think you are selling into and what you are actually selling?

You know, I wish I could tell you I have no idea. It’s a vacant facility, so…

So, no assets in the shed?

We got it, we got it, yes. So just for some of you that haven’t been following the company for a long time back I think it was in - in fact that was in 2001, we bought two plants from Etex Corporation, they had exited the U.S., we bought their Cleburne facility in Summerville, South Carolina facility. They are taking all these little bit different than ours. We definitely made a mistake in Cleburne we should get it like we did the Temple facility we bought in Waxahachie input our large stuff in and basically stuck which is the infrastructure, you can get raw material power supplies, basic water in that. But we tried to do - we tried to modify their machines to kind of make a more for Hardie products and Hardie throughput type cost or unit cost and we fought it for a long time, we didn’t get there. Okay, in the Summerville facility, we did the same thing and we kind of got there, so their older plan, we didn’t get their renewal plan, we did. Now when we went into the downturn, those two plans were both multiple the long with Fontana just because we going out have more embedded network bringing those three plants out. I think it was around two year ago, we decided Cleburne is worthily investment, so it’s actually been on the market as just industrial plant for that period of time and I am not sure we bought it, but there won’t be any of our equipment on it. Summerville while we start, so that’s kind of our next capacity play in the U.S. Once we started utilizing Plant City, new capacity Cleburne, new capacity and see further enable start Summerville.

And just in terms of Fontana, you both Hardie you sort of mentioned that there were some costs in this period associated with that, when - you expect that to start contributing positively from ‘16 or - and to its full potential in ‘16 or does it take a little bit longer than that?

I think it depends on market demand. The West Coast, the way the market demand setup right now, the West Coast plants are having a compete with Texas plants for certain markets and certain products. And so Texas is super low cost relative to the West Coast plants. So as we get generally more demand, Texas become in again and I mean shipping rate is down and then West Coast brands will come up and that’s when Fontana plays a more important role for it. Just what everyone knows, we always had kind of importers in the Texas. We’ve got it straight now through increase throughputs in Texas and we also have more capacity coming on in the Texas. So Texas is probably over in next two, three years will be an exporter where the last not so much this year but previous years there been an import of product. So it’s more of a full network thing than Fontana thing. So Fontana ready to go, it’s running reliably when we run it and it will run more as we generate more demand overall in the business.

Okay. And just one last question around the CapEx, you mentioned Australian business was around the 100 versus depreciation sort of 70, do you expect it’s remind that elevated level above depreciation or should we expect that will come back over the next couple of years?

Yeah, we had - a year ago we had said that we expected to spend about 250 per annum over three years and we’re still on that track. Last year we spend a little bit more, this year I think we’ll spend somewhere 75 to 100 and then we’ll go back to 200 to 250 number probably in fiscal ‘17. But you know I think maintenance CapEx broadly in line with depreciations probably a fair assumption and maybe a little higher in fiscal ‘16 just with the way the timing of some of the programs works, but and it just depend on where some of the additional capacity project are.

So just a final another capacity, I just - there’s been a bit of a shift, now we think about our capacity. And our plants - our plants are going to continue you get bigger. So some of obviously that’s the money we spend directly on capacity and existing facilities goes to capacity CapEx but a lot of times as you bring more product lines in and you bring any scale of the plants, you get other cost and that doesn’t always fall just directly in capacity. So we do have Greenfield plants for the Northwest and Mid-South but as you can see we may even get through another three years it is recovery just using Brownfield capacity that’s which is superefficient capacity.

Andrew Johnston, CLSA. I have couple of questions. First up on the actual result for 4Q, you indicated that there may be some throughputs that lead the 3Q result, you indicated this in throughput, so how much of that is impacting this result?

Yeah, it’s kind of tough call, so I said your order files kind of weak today relative to what our forecast for would be, but we’re still going to be up on last year. But I’d say maybe there is point two there, a point or two there or maybe not. So do I think we only grew at 7% last quarter, we had a pretty good quarter for our year-end volume, maybe we are on growth at 7 and maybe two is coming out in this quarter. So it’s like that range, one or two, it’s not like - it’s not like our turn of volume where it’s going to - the results going to look really weird quarter-to-quarter, it’s going to be fine.

And just looking at how strong that margin was the U.S. business. It looks like you going to have to start spending a lot of money to try and keep that margin below 25% given 4Qs generally a bit weak, is there suppose first of all, was there something there in that might that margin sort of look so good compared to previous 4Qs? And then second and then the way that - what sort of things you are going to be doing to drive PDG?

Okay, so the EBIT margin, you know like I said, we are fighting the headwind and input cost for a lot of quarters and then it start to kind of settle down in the third quarter and it kind reversed itself in the fourth quarter, so we had lower freight, lower far below energy. Now we don’t micromanage our spending to that degree. So if those things continue to get kind of cheaper, it will show up on our bottom line, we won’t say, key pulp cost are down $100, so let’s go spend that money. So the trick for us is they have the money to spend because we are trying to balance these things. The answer is yes. And then how much of it can you spend well. And that’s probably driven by kind of do you have an issue in the business that’s kind of a three year, five year, seven year and which of those you want to fund and how do you get it going. And then do you have the management to kind of have do that if you done if upfront work to get on the flat of that curve. So we figured out our spending for this year, so my point on EBIT margin would be, we know what we’re going to spend, we know what we’re going to fund in the business. So if input cost is low or plants are really well and keep in mind if we start up any new capacity this year will probably be toward the end of the year. So you could have a very, very good run on unit cost if these input costs are trending the way they or keep trending the way they started say four, five months ago. And if that…

Okay. And finally, just in terms of your price growth versus competing product price growth, now obviously LP is one focusing just on not they reported but just what you were seeing in the market. Are you seeing similar that was price growth to what you think they are putting through?

Yeah, keep in mind we’re very different pricer, so we believe in value pricing with regular small increases. You know LP as a company has a capacity utilization pricer, so I don’t think anyone should take comfort in the fact that they are running their prices up because I think they are running their prices up because their capacity is tight. And I think - so using that down the demand possibly. And then I think when they get to new capacity online it may reverse itself, that’s the behavior in the rest of your business. So I wouldn’t look at our pricing, their pricing I just look at as Hardie pricing the way they price and as it’s balancing out the volume and returns part to trend balance and I’d yes, we are doing well at our pricing I think. I want to come back to Trim, because I didn’t answer all your question on what we’re investing and we have done a lot of work in our Trim line and several invest were working on it in the business out in the market in the last couple of weeks. I still think we have some more work to do there, so that be an area we’re going to put more money into as well.

You were looking an alternative true product, looking at acquiring alternative technology for Trim, where you on that?

Yeah, I mean we have our MCT product in the market now. I think it’s kind of addressing some of the gaps we’ve had in our product line when you build certain types of houses, but I think there is some gaps, not so much when you built that type of house, ,but again Trims has those who view that Trims are very regional business, so we are not talking about Southern Trim, we got a lot of gaps right now there and we are growing the way we want to grow, we did the returns we want. But the northern trend, the difference in the Midwest and Northeast difference to in customer, I am going to say middle of market home, it’s really acquiring more solutions than we’ve provided thus far. I think our basic capability is - and Trim as a producer has improved significantly but I think our capability more from a market side. The builder is not seeing enough opportunities where our Trim is the obvious answer form, so we still have to take a look at every ten buildings, we may be obviously to answer on two or three, but we got to get to an obvious answer on six or seven and then we can worry about the other three later.

That two to three at Trim is for the Northeast that we’re talking about?

Yeah, just generally north and that would be ahead of actually our - we do it, it’s different segment to segment, so a new construction that be ahead of our rate in new construction. Our referring models a bit higher and multifamily is higher as well.

Thanks very much.

Thanks very much. Simon Thackray from Citi. Most of the stuff I wanted to ask has been covered, but acceptation of the channels low just in terms of the national builders more proportion of volume they represent, what’s happened particularly in terms of ColorPlus penetration where you had a higher rate of penetration when number of the national builders and that seems to at least any dead leaf have been cut back. So can you just talk about channel strategy national builders’ volume and or we should be expecting in ‘16?

Yeah, so, I just you change of the terminology a little bit. When we think it’s channel, we are thinking of distributors and dealers, okay. And most of you know that we kind of did a channel reset through four years ago when we started to working on pricing. There are a lot of things with the channel that had to address as far our pricing issues. I think that’s gone really well, I think we’re yet into be a company and probably as you go around the market, you probably also hear that Hardie is now kind of like you supposed to be in a channel, we are not kind as you know pushing as far as which way we want something go versus you know. So anyway I think we’ve done a good job in the channel. I think we’re not in the top tier of companies as far as high operating channel but we are kind of in at least in the middle now which we want before. So that’s gone well. Now we look at big builders as a segment at channel, so big builders would buy through a dealer base which we kind of buy through one stepper which is one type of dealer or the buy through what we can volume lumber yards which is now a type of dealer. So as far as big builders, we’ve always done well around. Now I say always when you think at 20 years, there is probably a six or eight period when we are making a lot of change in our products that made the product more expensive that maybe the most price conscious buyers in the market going to support and by the way the big builders are normally falling that at most conscious buyers…

And just in terms of mix between products into that segment, ColorPlus versus Prime Board versus Trim, so …

Oh, yeah, okay, ColorPlus, sorry. Yeah, we made a mistake. When we launched color in the South, we went to big builders to get base demand, get enough supply, so basically you’re scale. In the South, the value proposition for builders with color just isn’t strong enough. So we are kind of forcing the product into the market. With some of the builders we get it for three or four years to hoping that we go through that kind of learning curve between the two organizations to get there. But we just never did, the takeoffs weren’t efficient enough. The inventory in market just never was right for the service position they require because the production builders, obviously they can’t be held up by unavailability of a color, something like that. So I think maybe a year-and-a-half, two years ago, we just stepped back and said, hey, you know what, the value proposition of color does exist in Southern markets, but it’s not what you’re most price conscious, highest production builders. Now that will just differ a little bit regionally, like there’s some volume builders using it in the Carolinas. But we have a fiber cement standard market like Texas, like Atlanta. We’ve just de-emphasized those programs and the builders have been happy to step back from Color and go back to Prime. So we maintain their business, but we don’t maintain a color. Okay, it looks like - any questions on the phone would be the next…

Alright, we’ll now begin the question-and-answer session through the phone. [Operator Instructions] Our first question comes from the line of Jason Steed with JP Morgan. Please go ahead.

Hi, good morning, Lou. Morning, Matt. Just had a couple of questions. Going to Texas for a second, I guess some of the indications are that perhaps the downturn that you alluded to and that was just a conservative planning estimate of 20% in South Texas probably hasn’t come to pass, which is good. I was just wondering if you might be able to give a bit more color around some of the key markets. It sounds like Dallas and San Antonio are still pretty strong, Houston weak. What are your exposures and I guess what are you seeing and do you think about revising that kind of worst-case scenario?

Yeah. I don’t know if there is much motivation internally to revise it, because we have those markets covered with product. What we’re really guarding against there is anticipating more volume than we’re going to get and then not efficiently using our Texas capacity. So similar to the Fontana question earlier, we have Texas plants pointed outside of Texas now with some of the volume. And obviously there’s a fair amount of volume that if the market was off 20% in, say, South Texas, a fair amount of volume that would go elsewhere. It doesn’t have to go elsewhere because the West Coast plants specifically can react quick enough that if South Texas stays good, that the West Coast plants are just pretty small board and cover more to markets out west. So my guess, if you ask me my guess now because we have been - the guys have been following this kind of week to week and we’re looking like flat to slightly down to South Texas an opportunity. So my guess is that 20% although it was prudent planning, it’ll never come into play. So we won’t be - we won’t - I don’t think we’ll be dealing with the market situation where South Texas is off 20%. I think we’d start to see that - a we were to really see that in some of the data points we have now and we’re not seeing that.

Okay, okay. Excellent. And then just moving on to cement pricing. It does sound as though the one sort of input cost that is going up, quite meaningfully is cement. But is it - the fact that pulp, silica and energy are going down enough to offset that for you? Is that?

All right. Yeah, cement is important. I mean it’s fiber cement, but it really can’t overwhelm our numbers. The input cost, it can really make a difference as pulp and then energy is kind of right behind that. Silica not so much, it was working against us. I think it may work for us if things stay the same in the oil industry. And, of course, freight is a big component. So right now we like where we’re at. We have pulp coming down, we have cement going up, but only slightly. And, of course, I mean cement is a very predictable commodity pricing. So if housing starts continue to increase in, say, the next five years, you’re going to see cement prices increase the next five years. There’s no disconnect between utilization and pricing in cement. As the utilization goes up, the price will go up. So we like where we’re - we live in, in a little bit of a nice window here on input cost. So if we stay in that window like I said, you’ll see a bit more money to the bottom line.

Okay, got you. Thanks. And just one last one, I guess, for Matt. Matt, you talked about the mesothelioma claims and you want to see that KPMG has been pushed out again. I’d recall and correct me if I’m wrong that you have said in the past this would probably be a point whereby we’d get some certainty on whether or not the sort of peak in claims needed to be pushed out, but it appears that’s still too early to tell. Is that a change?

No, there’s no change. Keep in mind on the peak year, the peak year is a modeled year of a combination of exposure, the peak exposure year which I think in the actuarial study is in the late ‘60s, early ‘70s and the latency period. And then in the report the actuarial sensitivity says that there’ll be normal variation around that peak year. And up to and including this March report, the latest report, KPMG has not moved the peak year. So while certainly the trend in claims has increased adversely, if you will, they’ve continued to increase since the peak year. That’s still within the normal variation that would have been provided within that peak year assumption per the actuarial model. So obviously, we’re continuing to watch it and KPMG is continuing to watch it and there was discussion as the report was built for the year. But there’s been no discussion around moving the peak year.

Okay. And then does it have to do with the fact that national claim percentage rate is lower, all to do with that or is it just a separate point and that’s too early to tell?

Yeah, I think it’s too early to tell. I offered the national claims in part out of some explanation why AICF’s trends on claims continues to move in one direction and the national tends to stay flat. You could certainly imply from that that AICF is bearing a disproportionate burden of those claims. But those are separate points.

Yeah. Okay. Thanks, Matt. Thanks, Lou.

Okay. Is that it on the phone?

Our next question comes from the line of Matthew McNee from Goldman Sachs. Please go ahead.

Thanks, guys. Louis, I’m just going to ask this question a little bit different, because I know you already said for your margin you expect to be in the range. But if you look at fourth quarter next year for fiscal 2016, you’re obviously yet to get the full benefit of the price increase you may announced or implemented on March 1. Pulp has fallen a bit further since the end of the quarter. Other things actually flat. Is there any reason you would say that fourth quarter 2016 margin not to be at least as good as what you just reported in the fourth quarter 2015?

Well, I mean you got a lot of assumptions around input costs there. So pulp’s come off. I can’t -

Given what we see today.

Yeah, but given what we see today and what we’re going to see in 12 months, I think I already kind of covered it, Matt. Our forecasts show us being in the top of the range, okay? And then if things are more favorable than our forecast obviously to pull us over the range, we’re not going to try and manage ourselves down end of the range obviously, we’ve decided what we’re going to spend. We’ve got our forecast for input cost, we’ve got our forecast for volume, we’ve got our forecast for throughputs in the plant and how we’re going to source the material. And it all comes up to top of the range. So it can go over the range if we have favorable inputs costs relative to our plan. Or I guess if everything doesn’t work out like we think, our volume is a little short or our plans don’t run quite as well, our sourcing isn’t as seamless as we move more board back to the West Coast. So my guidance is we think we’ll be in the top of the range, but there is some variance around that, things that could happen. Yes, to answer your question directly, I could see a scenario where we don’t hit 24/5 in fourth quarter next year. But I don’t think - yeah, we’re not operating quarter to quarter.

Just moving to the volume, so you were saying you’re hoping to get PDG growth this year up to sort of 10%. And I think your housing starts forecast is same anywhere from sort of 10% to 20% growth in housing starts and R&R of about sort of 3% or 4%. So if you assume the exterior products is about 50-50, you’re getting - you’re hitting the low end of those ranges, you’re still going to get about sort of circa 7% or 8% underlying market growth. Now I know your interiors, let’s assume they don’t grow. So if you look at - you got your exterior products, 10% Prime and demand growth probably ended up being something in the mid-teens for total exterior product growth. Is that sort of the right sort of numbers that you guys are thinking about?

No, your arithmetics, they are definitely a bit different than ours. I think we had in our presentation here, 11% to 12% on housing, which seems to be pretty much where the forecasters are at now. We’re definitely not planning that. We’re planning the market up about 7% on new construction. So if you take your 7% and you multiply that by 0.4, that’s 2.8%. And then, say, R&R is at 4% and that’s times 0.6, so that’s 2.4%. So we think our market index is more likely to be 5% next year. So it doesn’t change the question that much because 10% on top 5% for the exterior part of our business is hard, okay? So that’s an acceleration that we don’t think has started yet. So hitting that 10% PDG next year is hard, but that’s definitely what we’re gearing ourselves to do. So less management time on capacity because we set up less management time on bottom line efficiency, because we think we have things working the way they should and more management time on growth and 10s is the battle cry. Now I don’t want you to think I’m guaranteeing you 10%, I just want to tell you that’s what we’re after.

Yeah.

And we get a little bit of growth out of the backer segment, and yeah, but like you say, it would pull down to 15% you’re looking for an exterior when you pull it down.

Yeah. No worries, thanks.

Yeah.

Our next question comes from the line of James Rutledge from Morgan Stanley. Please go ahead.

Thank you. Good morning. Sorry, Lou, to labor the point, but just firstly a question around - your comments around Phase II against bill pay, just wondering if those costs relating to Phase II were basically fully embedded in fourth quarter of 2015 or do they ramp up into 2016?

No, they’ll ramp up. I mean I think you’re into hopefully a three-year period of ramping up costs. So we’ve done a good job to control our increased spend and we’ll try and do that in the future. Like I said, the test in the business is, you start spending money, start spending money, but you got to step back and say, am I spending it well? I think so far we’re spending it well. But we’re actually having trouble getting a few things in place just from a management capability on so many initiatives. So the spending is also lagging of where ideally we’d like to be spending right now. I think we’ll catch up on that a little bit, but you will see probably not the where it shocks you, but you’ll see a steady increase in spend on the market programs. Now when you take it as a percentage of SG&A, maybe it doesn’t jump out if we get the volume growth to offset it, maybe it doesn’t spend out. But as far as dollars spent, it will definitely be ramping up, continue to ramp up.

And in terms of a significant, if I compare to what we’ve spent in the fourth quarter?

Yeah, I don’t know. I don’t know maybe Matt has a better feel. I mean maybe it’s too much information, I don’t know. Yeah, I mean we try to give you the points to be looking for as far as what kind of years Hardie going to have. We’ve been really consistent on our results and the reason is because even though the business - I mean even though the market demand is slower than everyone anticipated, it’s still been very steady increases. So we’re consistently moving quarter to quarter with a little better market opportunity. We’ve been moving quarter to quarter with our volume performance above our market index. And then a nice thing is we’ve been moving quarter to quarter and really building more efficiency in our business model. So everything’s going well and like I said, I repeat myself, we’ve put a fair amount of management time into capacity and fair amount of management time into bottom line efficiency. I’m really quite proud of what’s been accomplished on both those fronts. Okay? But if we don’t move off of that stuff now and move back on the top line, I think we’re missing an opportunity. So that’s what we’re trying to do internally and that’s kind of what I’m telling you. Now I guess I’m going - we’re going after that 10% PDG and we’re not there on May whatever it is today. Okay? So we’re already six weeks into the year and we’re more like what we did PDG last year and what we want to be on PDG. So that 10% is a hard number and that’s something to keep and I can’t. And I think rightfully so, to some degree, you guys are linking us in LP as far as, well, this 10% happen and our view is, hey, we got to make the 10% happen and we’ll see what else is happening as vinyl declining faster than we think and that’s - and LP is getting their share and that’s why we’re getting our 10er, we’re getting our 10% because there’s been some deceleration in LP’s model or whatever it is. But our focus is on us and what business can be converted, whether it be vinyl or wood based.

Sure, understood. Thanks. Question around the dividend, the ordinary dividend went back with far extent on that to $0.27. Just wondering the reason behind it.

Yeah. I think - so the way we do the ordinary dividend is it’s the adjusted NOPAT minus the asbestos adjustments. So last year when the asbestos liability increased, that had a positive effect on the adjusted NOPAT that we use for calculating the ordinary dividend of about $100 million or so. And then this year obviously with the liability not increasing, you don’t get that same effect. So if you were to use that formula, I think it’s 290 to 291, which was the adjusted number minus about $33 million of asbestos adjustments if you take the first half and second half ordinary and divide that out, it’s probably in the range of 50% to 70%. So that’s why you kind of see on a per cent basis - a per share basis year-on-year the amount go down.

Okay, great. Thanks.

Okay, I think that’s it.

Our next question -

Oh, wait, one more question I believe.

All right. Next question comes from David Leitch with UBS. Please go ahead.

Last and probably least, and congratulations Lou on a great result and as usual very helpful explanations, which I’ve always found very informative. But just getting into the questions, just briefly, I wondered just in the costs, besides the raw material cost coming down, non-controllable if you like, is there anything else that helped the cost in the current quarter?

Yeah, the plants, I think, Matt covered it in his comments a little bit. I’ll put in a little more context so you can understand. So we’ve always been high throughput manufacturers in fiber cement. But about two years ago, we just felt like we are really starting to flatten out on our improvement curve in manufacturing. And this was both in Australia and in the US. So we started to work on, hey, what does the next phase of manufacturing improvements look like for Hardie? Is it pre- Autoclave or is it post-Autoclave? Is it lines to produce specialty products versus [indiscernible] and we started to do some of that work. And well, number one, the work wasn’t leading us to obvious answer. We found our opportunities, but we weren’t able to put in that game plan quick enough for the organization to understand kind of here’s how we’re going to do it. And I think we actually started to lose some day-to-day momentum as the organization tried to figure out what the shift look like. We’re putting parts in place. It was working in some places, not other places. Australia took a little bit different approach. I mean philosophically heading in the same direction, but executing it differently. So we had kind of a frustrating about three or four quarters of manufacturing where we weren’t getting any improvements. And then just about second quarter this year started to kick in, the momentum has been building since then. So we’re running much higher throughputs than in some of our plants, which is great from a unit cost perspective, because you get more of that extra product at raw material plus energy cost rather than a full conversion cost. And it’s great for capacity planning. So right now and there’s just momentum building, it’s not - no signs of it starting to flatten out or reverse the trend kind of regress back to the main. There’s no sign of that happening. So we think we kind of made it through and we got some upside in manufacturing. And it kind of goes back to, I think it was Matt’s question. Could you see yourself being above 25 or why aren’t you going to be above 25? And I’ll be honest with you. If manufacturing momentum continues through this year, it would have a material effect on our bottom line. So we’re getting some really significant gains in manufacturing. And so in addition to the input cost, in the fourth quarter you’re starting to see those manufacturing gains kind of drag the bottom line to a greater degree than you’re getting, say, four quarters ago.

That’s very helpful and I had one final quick question I had. Just on the PDG, if you had to break up how much of that was coming from R&R and how much from New, how would you - what would you say about that?

I’d say in the South, it’s coming more from New and in the North, it’s coming more for R&R. And we got to kind of - that we got to kind of fix that in the North. We got to get our new construction, Northeast running at a higher rate. Midwest, Midwest growth rates were very good last year. So probably a bit ahead there. But the Northeast, Mid-Atlantic, which is a big market, we can do better in new construction and Sean Gadd and his team have been working on that and pretty confident we’ll start to moving in that direction. In the South, we’ve been doing well, because in a lot of the Southern markets, we’re the big player if it’s not a stucco market. In the South we’ve been doing well, kind of making sure we manage our share right and then finding the other opportunities, whether it be smaller markets or trim opportunities. So the South PDG has been pretty strong actually.

Thanks very much indeed. Cheers.

Lou, we got one more question and -

Okay.

Our next question comes from Tim Binsted with The Australian Financial Review. Please go ahead.

Good morning guys. Just a couple from me quickly. Thanks, Louis. Firstly, I mean do you think it’s fair that you guys paid a special dividend better relying on the New South Wales government to top up a shortfall in asbestos funding?

Well, yeah, so our dividends and the way we declare the dividends aren’t related to the commitment we have to the AICF and making our payment each year per the AP of up to 35%. So we always prioritize making that payment. And then we start to allocate our capital staring with what’s left over. And we would allocate capital based on organic growth first, followed by the ordinary, followed by special returns after that. And the special dividend was in line with that strategy for fiscal 2015.

Sure. But I mean you guys wouldn’t come to table and the New South Wales Treasurer came out and said that, hey, we’d have to extend and change the getting paid in instalments. I mean why can you - why are you happy with that situation?

We were pleased that the AICF and the State of New South Wales were able to come to a favorable agreement for all parties.

Okay. And secondly on tax issues, there’s been a lot of coverage of [indiscernible] not paying what’s viewed as their fair share of tax in Australia and Hardie has been under fire on that in the past. So are you at all in discussions with the tax office and are you worried that there might be changes to the way you’re paying tax in this country.

No, we’re not under any discussions.

And you’re not concerned that there might be changes, Matt?

Yeah, I’m not sure that - I think it’s a very dynamic tax environment at the moment and so we’re certainly mindful of watching how tax legislation and tax laws in all jurisdictions move and we’ll continue to monitor those.

All right. Thank you.

And our final question comes from the line of Greg Brown with The Australian. Please go ahead.

Hi, Louis. Just wondering, in the budget there’ s been a couple of recent measures to curb foreign investment in housing. Of course, they are introducing [ph] lot of construction such as [indiscernible] fees at a federal level and then in Victoria there’s been additional stamp duties paid. Do you think this will have much of an impact on housing construction?

Yeah, certainly I’m not - I wouldn’t be an expert in the kind of demand of housing in the Australian market. It’s obviously been a very healthy market. Ourselves and other building materials companies have been working hard to supply the materials and are benefitting from that. But I think there’s a lot of people that understand demand for housing in Australia better than I would.

Okay, sure. Given that there’s so much of a push for high-rise apartments, is that going to be a market that you’re going to focus on penetrating?

Yeah, that’s a good question. I kind of covered that a little bit earlier I think. We’re not positioned in medium density or high-rise construction as well as we are in detached housing or renovations. So, yes, our Australian management team over the next, say, three to seven years I think will be looking for opportunities to participate in those segments to a greater degree than we do.

Okay. Could there be an opportunity to corporate activity do you think to get into those segments or do you think there’s opportunity for further penetration in the Australian market through corporate activity?

Yeah, I mean we have a strong bias toward organic growth. I’m not saying we wouldn’t do an acquisition in Australia to open up an opportunity, but if you look at our history we normally strongly prefer investing in organic growth, so that would be identifying the opportunities, developing a solution and then bringing it to market.

Okay, sure. And just one last question, given that you’re not very confident on US market - US housing and you are on Australia. And if that’s going to [indiscernible] further resources and put a bit more of a focus on making the most of the construction boom in Australia.

Yeah. No, we kind of run through business cycles. So we think our job is to manage our position through a business cycle rather than go overweight, underweight. So we think we’re fully resourced in Australia for the opportunity here and the same in the other countries we’re participating.

Okay. Okay, thanks so much. Appreciate it.

All right. Thank you. All right. Appreciate everyone’s attention. Thanks.