A more confident outlook about the housing and apartment constriction sector saw a major change in policy from CSR yesterday.
Shares in CSR bounced nearly 6% yesterday after the building products group revealed that it will resume paying dividends to shareholders.
The decision to pay an interim for 2020-21 after omitting the final for 2019-20 came despite a 15% fall in its first-half profit to $58.7 million.
The company said on Monday that shareholders would receive 12.5 cents a share of fully franked dividends for the half, including a 4.5 cents per share special dividend. (8 cents a share interim).
That was still half a cent a share less than the 13 cents a share interim paid for 2019-20.
Despite that CSR shares closed up 5.6% at $4.66.
CSR blamed what it said was an “uncertain economic environment” for the decision to omit the final for the year to September 30.
That has obviously become a little more certain judging by the comments yesterday and the resumption of dividend payouts.
CSR a 6% drop in first-half revenue to $1.075 billion, a little better than market forecasts around $1.05 billion.
Group earnings before interest and tax fell 17% to $94.4 million, from the $113.1 million reached in the first half of 2019-20. That followed a steady result in building products and a slide in returns from its aluminium business.
“While it has been a challenging half on many fronts, we are very pleased with the performance of building products. The increasing diversification of our business across segments and markets, coupled with strong cost control and operational efficiency enabled us to maintain our building products EBIT (earnings before interest and tax) in a contracting market,” said CEO Julie Coates said in Monday’s statement.
“We have reorganised the business to drive stronger customer solutions focus, started our supply chain transformation, and continued to optimise our footprint. We are building CSR into a more diversified, streamlined business to increase resilience as well as growth potential,” she said.
It should have been happy at the best building approvals in 19 months in September, according to the Australian Bureau of Statistics (See separate story).
Despite the decision on dividends, the outlook remains mixed.
Revenue for the first four weeks of the second-half in the building products segment fell 6% and CSR noted that the longer-term of the environment is uncertain given the continuing impact of COVID-19.
In property, the company will see delivery of the first tranche of the Horsley Park stage 2 project. It is anticipated that this will provide $53 million in earnings for in the current second half, which will see a sharp jump in group earnings all other things being equal.
