- Shares in building materials supplier CSR (CSR) have spiked on the ASX today after the company revealed a rise in full-year profits in its latest annual report
- The company grew statutory net profit after tax by 17 per cent to $146 million for the 12 months to the end of March 2021 compared to $125.3 million last year
- This comes despite a slight four per cent decline in revenue, which came in at just over $2.1 billion for the full year
- While the revenue slip was driven by a slowdown in residential construction and soft aluminium prices, earnings still increased
- With efficient cost management and improved margins, CSR’s earnings before tax grew 10 per cent to $237.9 million
- In light of this, CSR will be paying a 14.5-cent final dividend for the year — taking its total annual dividend to 23 cents fully franked, not including a 9.5-cent special dividend from earlier in the year
- The company said it expects earnings from its aluminium business to improve in the 2022 financial year thanks to an increased forward hedge position
- CSR shares closed 4.23 per cent higher this afternoon at $6.16 per share
Shares in building materials supplier CSR (CSR) have spiked on the ASX today after the company revealed a rise in full-year profits in its latest annual report.
The company, which is behind brands like Gyprock plasterboard and Bradford insulation, grew statutory net profit after tax by 17 per cent to $146 million for the 12 months to the end of March 2021 compared to $125.3 million last year.
On an underlying basis, meaning when not considering major one-off costs, CSR’s net profit after tax was $160.5 million for the financial year.
The profit bump comes despite a slight drop in revenue, which came in four per cent lower than the 2020 financial year at just over $2.1 billion.
CSR said the revenue decrease was driven by a slowdown in residential construction and soft aluminium prices.
Nevertheless, with efficient cost management and improved margins, CSR grew earnings before interest and tax (EBIT) by 10 per cent to $237.9 million for the full year. Earnings were primarily driven by CSR’s building products business, which accounted for $184.3 million — or around 77 per cent — of total earnings.
However, earnings from CSR’s aluminium division fell by 61 per cent over the full year — from $59.6 million over the 2020 financial year to $23.4 million over the 2021 financial year.
CSR Managing Director and CEO Julie Coates said the company performed “very well” over the year, reflecting the breadth of its business and the strength of its construction segments and markets.
“We increased our earnings with a strong focus on cost control and operational efficiency which leveraged trading outcomes as residential building activity improved during the second half of the year,” Julie said.
She added that the strong full-year result came even as the company reorganised and restructured its building products business segment.
“We are now well-positioned to deliver our strategy across more complete customer solutions, optimising our supply chain and leveraging core capabilities across all products and markets,” she said.
“This will further diversify our business, enabling us to maximise market opportunities and drive future growth.”
Bolstered dividend
As a result of the increased earnings and profits, CSR has announced a 14.5-cent final dividend for the financial year, fully franked.
This takes the company’s total dividend for the year to 23 cents fully franked, not including a 9.5-cent special dividend declared after the company settled the sale of a major property at Horsley Park in New South Wales.
This is a stark increase to the 10-cent, half-franked total dividend over CSR’s 2020 financial year, although this was largely due to uncertainty from the early days of the COVID-19 pandemic.
CSR said it had a net cash position of $251 million at the end of March.
What’s next?
Looking ahead, CSR said it has strengthened its aluminium forward hedge position to lock in some future returns regardless of how turbulent the price of the metal might be.
As such, the company is expecting EBIT for its aluminium division to be between $32 million and $40 million for the 2022 financial year.
CSR shares closed 4.23 per cent higher this afternoon at $6.16 per share. The company has a $3 billion market cap.