CSR delivers a surge in profit amid strong demand for housing

BUILDING products supplier CSR has defied headwinds buffeting the property sector to deliver an 85 per cent surge in annual net profit.

The company announced on Wednesday that it had generated a statutory net profit of $270.6m in the 12 months to March 31, up from the $146.1m earned in the same period a year earlier.

Based on the continued strength of the detached housing sector, it also provided a rosy forecast for the year ahead for its products, which include PGH bricks, Monier roofing, Gyprock plasterboard and Bradford insulation.

“All of CSR’S businesses have performed very well during the year. In building products, our team worked hard to support the demand in residential housing with strong operational execution,” chief executive and managing director Julie Coates said.

“We will continue to implement our strategy this year with increased investment at key sites to further improve productivity and optimise operations, as well as enhancing workplace safety and sustainability.’’

CSR noted that its result, based on a 9 per cent lift in revenue to $2.31bn, included significant items relating to the recognition of $86m in carry forward capital tax losses.

Setting aside those significant items, the company saw its net profit spike by 20 per cent to $193m.

Earnings before interest and tax from CSR’S building products division rose 24 per cent to a record $228m.

The company said the figures reflected “strong detached housing activity driving higher volumes, improved factory performance and operational execution and continued cost discipline’’.

EBIT from the aluminium division surged 74 per cent to $40m as a result of higher aluminium pricing, although that was partly offset by increased production costs.

By contrast, EBIT in the property division fell 13 per cent, from $54m to $47m, as a result of the sale of 4.6ha of land at Badgerys Creek and the next stage of a housing development at Horsley Park, both in Sydney’s west.

Shares in CSR rose 0.7 per cent to $5.73 on Wednesday.

CSR declared a fully franked final dividend of 18c a share, bringing the full-year payout to 31.5c. That was at the top end of CSR’S policy of returning 60-80 per cent of net profit after tax, excluding significant items.