Building products group, CSR has dropped its final dividend, and its chief executive and other senior leaders have forfeited their short term bonuses to preserve cash in the business.
The coronavirus pandemic had minimal impact on CSR’s full-year result (only becoming a problem in the last six weeks of the year), and the company has seen a minimal impact on its trading from COVID-19 in the first six or so weeks of the new financial year, the ASX was told on Tuesday.
The company reported a full-year net profit from continuing operations of $134.8 million, which was well down on last year’s $181.7 million.
Naturally news of cost cuts and dropped dividend was seen as good, prudent moves by investors, so the shares leap 11% in early trading and then eased a little to end the day up 10% at $3.72.
The company’s building products division generated revenue of $1.6 billion, which was down 6 percent on last year. CSR said this reflected the continued weakness in Australian residential construction, down on average by 21%.
But CSR has cut the hours of casuals and reduced overtime at some of its operations in anticipation of a downturn in the Australian construction market this year. It has also halted some manufacturing lines.
Revenue from continuing operations for the year to March 31 eased 5% to $2.21 billion. That reflected the cooling in constriction, especially in dwellings such as apartment blocks and the like, as well as housing.
On top of not paying a final dividend – last year it paid a final of 13 cents a share and it also paid an interim of 14 cents a share for the year to March 31 – the company has stopped its share back to preserve liquidity.
CSR said $69 million shares had been purchased out of the $100 million share buyback program.
CSR said building products revenue since April 1 was down just 3.0% compared with a year ago but expected COVID-19 would cause a broader slowdown in demand this year.
“However the timing and extent is uncertain,” it said.
The company’s sites in Australia have been open during the pandemic and its New Zealand operations resumed in late April.
CSR CEO Julie Coates said the company was pleased with the performance of its building products division, where revenue dropped 6.0 percent despite residential building activity falling 21 percent.
“The increased diversification of our business across product and market sectors positioned us well against this backdrop,” Ms. Coates said.
