CSR defies building dip

Profit doubles for half year after Viridian sell-off

CSR has more than doubled its first-half profit to $68.8 million despite weakness across the construction market, as the company benefited from the absence of impairment charges against its former Viridian Glass business.

Softness in the residential construction market sapped CSR’s core building products unit for the six months to September 30, where earnings slipped 18 per cent to $95.9 million.

Total revenue from continuing operations fell 4.0 per cent to $1.15 billion, in what was managing director Julie Coates’ first result announcement since taking over from Rob Sindel last month.

Nonetheless, CSR’s profit was up from $26.8 million a year ago, when the troubled Viridian business weighed on the balance sheet and decimated the company’s share price thanks to $76 million in impairments.

Viridian was sold to Crescent Capital Partners for $155 million in January.

“The business has performed solidly in light of challenging market conditions in the residential construction sector,” Ms Coates (pictured) said yesterday.

“While in the short term we are focused on managing the business prudently, we remain committed to continuing to diversify our earnings across both residential and commercial construction.”

The board cut its interim dividend from a fully franked 13 cents to a partially franked 10 cents per share, but will also pay a partially franked special dividend of 4.0 cents per share.

Shares in the company slipped by 0.85 per cent to $4.105 early yesterday, but are still 46 per cent higher in 2019.

Ms Coates said seasonality would likely weaken the company’s second half, although she expects a building product boost from people cashing in on low interest rates, increased credit availability and generally improving house prices.

The company said its FY20 profit, before significant items, is expected to be between $107 million and $133 million, at the low to medium end of the range flagged by Bloomberg.

CSR also confirmed yesterday the sale of the second tranche of surplus land at Horsley Park, NSW, for about $140 million.

The sale of the 20ha site is expected to generate property earnings of about $90 million.