East coast housing boom props up CSR profit

A robust property market has helped the building products group to post a solid lift in underlying first-half profit.

Rob Sindel, chairman and chief executive of CSR.

Building products group CSR has reported a 12 per cent rise in underlying first-half profit aided by strength in the east coast housing market.

The positive six-month showing has enabled the group (CSR) to deliver full-year guidance at the top end of analyst expectations.

For the six months to September 30, CSR booked a 48 per cent rise in net profit to $114.5 million, with last year’s number hampered by transaction costs to complete its bricks joint venture with Boral.

Underlying earnings, which strip out significant items, climbed 12 per cent to $103.1m.

The rise came on revenues of $1.24 billion, an 8 per cent lift, and ahead of market expectations for a reading of $1.18bn.

CSR’s core building products unit declared record half-year pre-tax earnings of $114.6m, up 29 per cent on last year.

“The overall strength in the residential construction market across the east coast has supported the growth in building products’ earnings and margins,” CSR managing director Rob Sindel said.

The group noted hints of a slowdown in the apartment market after a stunning boom across Melbourne, Sydney and Brisbane over the past few years, but said it was prepared for a shift in the cycle.

“While detached housing construction remains robust, high-rise apartment approvals are showing signs of slowing across Australia,” Mr Sindel said.

“CSR is now more resilient to these changes in the building cycle as a result of our strategy over the past few years to strengthen our core businesses and invest in new market segments.”

For the full year the company is projecting net earnings at the “top end” of the current analysts’ range of $154m-$184m.

CSR also detailed an unfranked 13c per share interim dividend, up 13 per cent on last year.