The declining value of Australian properties seems to have hit the CSR Limited (ASX: CSR) profit which was reported earlier today.
CSR is one of the leading building products businesses in Australia and New Zealand. Gyprock plasterboard, Bradford insulation, PGH bricks and pavers, Monier rooftiles and AFS load bearing for concrete walls are some of the brands offered by CSR. The company is also a joint venture participant in theTomago aluminium smelter, located near Newcastle, NSW. CSR also generates additional earnings from its ‘Property’ division which focuses on maximising financial returns by developing surplus former manufacturing sites and industrial land for sale.
Here’s What CSR Reported
CSR reported that trading revenue from continuing operations increased by 4% to $2.32 billion in its FY19.
However, there wasn’t much joy to be had looking at each division’s EBIT (click here to learn what EBIT means). Building Products EBIT fell 4% to $206.5 million, Property EBIT dropped 19% to $38.8 million and Aluminium EBIT declined 54% to $36.6 million.
The one bright spot was that ‘Corporate, Provisions and Restructuring Costs’ improved by 20% to a negative $16.9 million. Overall, group EBIT from continuing operations declined 17% to $265 million.
Net profit after tax (NPAT) fell 14% to $181.7 million. Statutory net profit declined 59% to $78 million, which included an after-tax loss of $60.9 million relating to the Viridian Glass business which was sold on 31 January 2019.
CSR did try to point to a few positive factors including $14 million which has been invested in innovation and new building systems to deliver long term growth.
CSR Managing Director Rob Sindel said: “The Building Products business performed well this year, despite the residential construction market slowing during the last few months. This reflects our increased exposure to the non-residential market where CSR has been positioning its investments in both innovative product solutions and growth-linked capex.”
Is The CSR Share Price A Buy?
It doesn’t look terrible for CSR, but it’s not great, particularly with the dividend being cut slightly from last year. The CSR share price dropped 2% today, I’d rather invest in one of the proven ASX shares in the free report below.
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