A rebound in housing starts and a restructure of its loss making glass business has helped building products manufacturer CSR more than double its underlying profit in the year to March.
Releasing its preliminary final results on Wednesday, the company said net profit after tax before significant items for the year ended 31 March 2014 rose by 143 percent from an abnormally low base of $32 million to $72 million.
Leading the way was the flagship building products division, whereby a rebound in housing construction starts underpinned higher levels of demand for materials such as plasterboard, tiles, bricks and pavers and boosted earnings before interest, tax, depreciation and amortisation (EBITDA) by 20 percent to $92.6 million.
Savage cost cutting in the company’s loss making Viridian glass business, meanwhile, saw losses in that segment cut from $38.8 million to $14.9 million whilst aluminium earnings ($51.9 million) edged up 3 percent on the back of higher prices and the company’s property business made $17.9 million after having only broken even in the previous year.
Announcing the result, company Managing Director Rob Sindel said along with the Viridian restructuring efforts, last month’s acquisition of walling solutions provider AFS Products Group would provide greater exposure to commercial and multi-residential markets whilst significant cost savings would be generated from its proposal to combine its brick manufacturing facilities with Boral.
“All of these initiatives, together with ongoing work across our network to lower energy use, invest in product development and reduce manufacturing costs, ensure we are well positioned to take advantage of the construction market’s expected growth over the next few years,” Sindel said.
Asked about the prospect of any takeovers, Sindel would not rule this out but told reporters any possible action would be geared toward apartment construction.
"There is nothing imminent at the moment, but our objective is to get higher exposure to multi-residential and also addressing the issues of speed and ease of construction," he is quoted on saying on Australian Associated Press.
The company declared a dividend payout of ten cents per share.