CSR share price rockets higher on profit and dividend boost

The CSR Limited (ASX: CSR) share price is soaring in early trade on Friday, up 4.8% at the time of writing having opened 8% higher.

Shares in the S&P/ASX 200 Index (ASX: XJO) building products producer closed yesterday trading for $4.53 and are currently trading for $4.75 apiece.

This comes following the release of the company’s half-year results for the six months ending 30 September.

Here are the highlights.

CSR share price takes off on 27% profit lift

ASX 200 investors are bidding up the CSR share price after the company reported a 27% year-on-year increase in net profit after tax (NPAT) of $110 million before significant items for the six-month period.

Trading revenue increased 14% from the prior corresponding half-year to $1.3 billion.

And earnings before interest and tax (EBIT) before significant items came in at $171 million, an increase of 29%. EBIT in the company’s building products and property segments were both higher year on year, while EBIT in its aluminium segment was slightly lower, impacted by higher raw material and input costs.

The CSR share price is also likely getting a boost from the company’s declaration of an interim dividend of 16.5 cents per share, fully franked. That’s up 22% from the interim dividend paid in the prior corresponding period.

CSR also reported it’s now purchased $22 million in shares in its $100 million on-market share buyback, announced on 30 June.

What did management say?

Commenting on the half-year results that look to be giving the CSR share price a boost today, CEO Julie Coates lauded the business’s strong performance in an inflationary environment.

Coates added:

Cost, supply chain and labour pressures are supporting adoption of CSR systems like Hebel lightweight aerated autoclaved concrete as faster build times and reduced labour requirements are becoming increasingly valuable to builders. Our upgraded Hebel manufacturing facility has significant capacity to deliver into this growing demand.

Investing in our property assets and our market leading development capability is a core part of our strategy. Future earnings will be supported by the independent valuation of CSR’s Property assets with development potential, which has increased in value on an “as is” basis to $1.5 billion.

What’s next?

For some insight as to where the CSR share price could be heading over the full year, the company said it “has entered the second half with good momentum”.

It pointed to strong demand for building products and underlined its ability to manage the current inflationary period across its product categories.

Without offering a specific guidance range, CSR stated it “expects to deliver a strong group result for YEM23”.

CSR share price snapshot

Despite today’s boost, the CSR share price remains down 21% for the calendar year. That compares to a year-to-date loss of 10% posted by the ASX 200.

The post CSR share price rockets higher on profit and dividend boost appeared first on The Motley Fool Australia.

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Motley Fool contributor Bernd Struben has no position in any of the stocks mentioned. 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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