Construction Housing Boom at Least Two More Years: CSR

By
Wednesday, November 5th, 2014
liked this article
Embed
Lovegrove Solicitors – 300 x 250
advertisement
residential construction
FavoriteLoadingsave article

Building products maker CSR expects the housing boom to run at least another two years.

CSR on Wednesday reported a 48 per cent lift in its first-half net profit to $68.4 million, with earnings from its building products division rising 22 per cent on the back of increased construction activity.

CSR chief financial officer Greg Barnes said the pipeline of activity for residential construction looked good and would drive demand for building products.

“I think the market and demand for our products has at least another couple of years to run,” Mr Barnes told AAP.

“I think analysts had it coming on faster and running off quicker than I think it will happen in reality.

“So long as people are employed and confident about their jobs and house prices, they will continue to want to build.”

Mr Barnes said he was unconcerned about the possibility of tighter regulation of banks aimed at cooling investment in the property sector.

He said the banks had put tighter demands on housing loans after the global financial crisis anyway, and a relative shortage in supply of housing, high immigration and a relatively high birth rate underpinned demand for housing.

Tighter regulation over lending may even be beneficial in the long term because it would make the housing industry more sustainable and less prone to shock.

CSR is confident of boosting its underlying profit as the housing boom lifts demand for its products.

The group expects its full year net profit, before significant items, will rise to the upper end of analysts’ forecasts of between $111 million and $134 million.

CSR’s full year net profit result, excluding significant items, for 2013/14 was $72 million.

CSR’s glass-making business, Viridian, returned to the black in the first half with $500,000 in underlying earnings compared to a $10.6 million loss for the same period a year ago.

Mr Barnes said a restructure of the Viridian business was largely complete and it was now set for slow and steady growth.

In the next four to five years, Viridian could generate earnings above $20 million, after losing $40 million just two years ago.

Mr Barnes said Viridian was aiming to lift its service levels and product offer, particularly in the commercial building sector which demanded heavyweight, higher value glass.

Viridian would also promote sales of more energy-efficient glass in the residential sector.

Earnings from CSR’s aluminium business also rose, by 71 per cent, amid higher prices and improved smelter performance.

CSR’s property division tripled its earnings in the first half, to $20.4 million, and the company expects even stronger growth in the second half.

By Trevor Chappell
Embed
FavoriteLoadingsave article

Comments

 characters available
*Please refer to our comment policy before submitting
Discussions