CSR Limited (ASX: CSR) has announced a mixed HY20 result to investors today.
CSR is a construction materials business with various brands like Gyprock and Bradford. Its construction business is split across three different divisions: interior systems, masonry & insulation and construction systems.
HY21 report
CSR reported that its trading revenue fell by 6% to $1.075 billion.
EBITDA (click here to learn what EBITDA means) dropped by 12% to $143.1 million and group EBIT fell by 17% to $94.4 million.
There was a bit of a mixed performance within its divisions. Building product EBIT actually rose a small amount to $96.3 million, but aluminium EBIT fell significantly by 76% to $6.2 million. The property division generated EBIT of $1.7 million whilst corporate expenses at the EBIT level were $9.8 million.
Underlying net profit dropped 7% to $66.4 million and statutory profit dropped 15% to $58.7 million.
Despite a broader market slowdown, the company managed to remain resilient from its diversified base. Indeed, CSR’s largest business Gyprock delivered increased earnings. But Bradford and PGH Bricks were lower as they have significant exposure to the detached housing market which was down 9% in the period.
Dividend
CSR’s board declared an interim dividend of 8.5 cents per share and a special dividend of 4 cents per share, reflecting that it didn’t pay a final dividend last financial year.
Summary thoughts
It’s not shooting the lights out like e-commerce shares, but it has proven resilient despite the Australian recession.
Building product revenue is down 6% in the first four weeks of FY21. But the first tranche of the Horsley Park stage 2 is on track to deliver earnings of $53 million in the second half of FY21.
But I wouldn’t want to buy shares, for starters I’d pick Brickworks Limited (ASX: BKW) shares which I wrote about here.
