Yum went investors as they sighted the full year results from building products giant CSR, with a higher profit and what would be a welcome final dividend for the year to March.
CSR shares jumped 9% at the open to a day’s high of $6.48 and the highest the shares have been since May 2008.
They eased a touch on a day when the wider market was weaker but still closed up nearly 4.2% at $6.16. That was the highest close since May 2008 as well.
Shareholders liked the reinstated final dividend and the nice rise in full year earnings for the 12 months to the end of March.
The Sydney-based company told the ASX that full year earnings rose 17% to $146 million thanks to the building boom sparked by low interest rates, the homeBuilder support package and a continuing close attention to costs.
Shareholders will receive a 14.5 cents a share final dividend on July 2, as well as a 9.5 cent special dividend from the settlement of the property sale at Horsley Park in southwest Sydney.
That takes the company’s full-year dividend comes to 23 cents, up from 10 cents last year when the COVID-19 pandemic forced the company to omit a final dividend a year ago to preserve cash.
Revenue for the year slipped 4% to $2.12 billion, reflecting the pandemic driven first-half slowdown in residential construction and lower aluminium prices
CEO Julie Coates said the company’s strong focus on cost control and operational efficiency added to the impact of a stronger second half.
“(This) leveraged trading outcomes as residential building activity improved during the second half of the year,” Ms Coates said in the statement to the ASX.
“The pleasing result was achieved while making important changes to reorganise the building products business. We are now well-positioned to deliver our strategy across more complete customer solutions, optimising our supply chain and leveraging core capabilities across all products and markets.”
CSR said it sees further benefit from its strong position in the detached housing market, which will continue to be supported by the flow through of HomeBuilder project commencements into 2022.
The federal government extended HomeBuilder in Tuesday’s federal budget
HomeBuilder officially on March 31 but the budget revealed more than $800 million worth of measures targeting home ownership and first-home buyers and of that $774.8 million over two years will go towards extending the HomeBuilder grant so that applicants can start their construction over an 18-month period and not the previous deadline of six months.
That will make life easier for CSR, Boral and others in the sector.
It has probably started occurring to some investors that CSR is the last big building products company in the country that is local and independent.
Fletcher building is NZ-based, Boral is under the control now of Kerry Stokes and his family companies, big cement rivals to Boral are mostly foreign or family owned or regional (such as Wagner in southern Queensland), while Adbri (the old Adelaide and Brighton) is family controlled as well.
James Hardie is the largest but it is now a global giant with a market value of more than $19 billion.
For that reason the CSR share price should remain well-priced for a while as investors wait to see the fallout, if any from the current action in Boral, where the Stokes interests have launched a faux takeover bid merely to lift its stake to around 30% and no more.
It is highly unlikely that a counter offer might emerge for Boral, but the Stokes bid has highlighted CSR on its lonesome.
