CSR has delivered a solid increase in profits and dividends as construction demand stays strong

CSR says activity in the apartment market is improving and it has made a strong start to the year after delivering a solid profit result.

CSR managing director Julie Coates.

Building products company CSR has posted a 17 per cent increase in full year profit and says it has made a strong start to the year, with the pipeline of detached housing projects under way nationally sitting 50 per cent higher than historic averages.

The company on Wednesday reported an underlying net profit of $225m, up 17 per cent on the previous year’s performance, on trading revenue of $2.6bn.

The statutory net profit came in at $219m, down from the previous year’s $271m which included the recognition of an $86m benefit in carry forward tax losses.

CSR’s building products division delivered pre-tax earnings of $273m, up 20 per cent, which the company said reflected “good end market execution, (and) disciplined price and cost management’’.

The property division made $72m, up from $42m and the aluminium division posted $8m in earnings, down from $40m, impacted by increased raw materials costs including coke and pitch.

Managing director Julie Coates said the company had performed well.

“In building products our teams delivered another great result by ensuring we optimised our factory operations and distribution channels to deliver for our customers, ensured pricing discipline across the business and continued to focus on cost management,’’ Ms Coates said.

“All of the building products businesses increased revenue with good execution into end

markets and strong performances from Gyprock and Bradford as well as Hebel, which is continuing to increase market share with its faster build times and large installer base.

“The investments we have made in reorganising the business, improving our supply chain and focusing on customer solutions have served the business well and supported the capture of earnings in a dynamic market environment.

“Incremental investments in manufacturing are improving the productivity and variability of our cost base as well as our sustainability performance.’’

On the outlook, the company told the ASX that it had made a strong start to its financial year, which starts in April, with the pipeline of detached housing projects sitting at 110,000 starts nationally, 50 per cent higher than historic averages.

It did warn however that build times could continue to be extended due to ongoing supply chain constraints and labour availability.

“Activity in the apartment market is improving as more projects have commenced this year, while non-residential activity remains strong, supported by a large pipeline of approvals,’’ CSR said.

“Incremental investments in manufacturing performance, plant consolidation, supply chain and

customer solutions have improved manufacturing productivity, the variability of the cost base and responsiveness to customer demand.

“CSR’s strategy is focused on providing a platform for growth and resilience to deliver improved performance through the cycle.’’

CSR said the volatility of raw materials costs made forecasting in its aluminium business difficult, however its best estimate at this stage was for a full year loss of $5m-$15m.

“Aluminium is expected to return to profit in (the following year) and increasing in the following years due to higher hedged pricing, based on current cost assumptions,’’ the company said.

Ms Coates was paid $3.13m in the year to the end of March, up from $3.1m.

CSR will pay a fully franked final dividend of 20c per share, up from 18c per share for the previous corresponding period, with the dividend to be paid on July 3.

CSR shares were 2.5 per cent lower at $5.33 on Wednesday morning.