CSR share price lifts as company constructs 20% more profit

CSR builds a full-year result to be proud of.

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Key points

  • The CSR share price is trading 2% higher today amid the release of its full-year results
  • Profits surged compared to the previous year on the back of high demand for building products and improved aluminium prices
  • A fully-franked dividend of 18 cents per share has been declared

The CSR Limited (ASX: CSR) share price is climbing higher this morning following the company’s full-year results.

At the time of writing, shares in the building products manufacturer are 2.02% in the green, swapping hands for $5.81 apiece.

CSR share price strengthens amid exceptional earnings

  • Trading revenue up 9% year on year to $2.3 billion
  • Net profit after tax (NPAT) increased by 20% to $193 million
  • Earnings per share (EPS) of 39.7 cents
  • Final fully franked dividend of 18 cents per share declared
  • Building products earnings before interest and tax (EBIT) up 24% to $228.2 million
  • Finished the year with $178 million in net cash

What else happened during the year?

The March ending full year was a solid 12-month stint for the Australian building products maker. Notably, this result marks the second consecutive year of increases in the company’s NPAT result.

According to the report, CSR benefitted from strong demand across its building products division. In fact, thanks to the elevated market activity, the company achieved a record $228 million in earnings from the business segment.

In addition, operations at the company’s aluminium business were in full swing during the year. Improved pricing conditions resulted in a 70% boost to the segment’s earnings, hitting $40 million over the 12-month period.

When accounting for significant items, such as property sales, CSR’s statutory net profits dialled up to $271 million. This represents a staggering increase of 86% compared to the previous year. The stellar earnings figure is being met with optimism towards the CSR share price.

What did management say?

CSR managing director and CEO Julie Coates commented on the robust result:

All of CSR’s businesses have performed very well during the year. In Building Products, our team worked hard to support the demand in residential housing with strong operational execution. The organisational change we have made streamlining the business over the last 18 months along with the initiatives aligned to our supply chain strategy have supported our ability to deliver for CSR’s customers against a challenging backdrop.

Furthermore, Coates noted that the company will continue to work towards improving productivity and optimising operations. The positive comments are reflective of the CSR share price today.

What’s next?

Looking ahead, sustained demand for detached housing projects is anticipated for the company. Meanwhile, apartment and non-residential markets are also expected to improve after a slow patch in recent years.

Turning to the property division, CSR is forecasting EBIT of ~$52 million for the 2023 full year. This reflects the next round of proceeds from Horsley Park in New South Wales, and the sale of a site in Warner in Queensland.

Lastly, the company informed shareholders that it is expecting EBIT of somewhere between $33 million and $49 million for its aluminium segment for the year ending March 2023.

CSR share price snapshot

While the CSR share price is in the red compared to where it was a year ago, it is outperforming the broader materials sector.

Shares in the building products company are down 1.4% over the 12-month timeframe. Whereas, the materials sector is 8.2% worse off.

The company is currently trading a price-to-earnings (P/E) ratio of 11.3 times.

Motley Fool contributor Mitchell Lawler has positions in CSR Limited. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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