CSR Builds To Property Segment Momentum

Australia | Nov 09 2021

Detached housing momentum has spurred strong results for CSR in the first half of FY21, and analysts note continuing growth in Property looks to sustain results.

-CSR’s Building Products segment drove strong first half results
-Strength in the detached housing market contributed to Building Products results
-Property segment expected to deliver continued growth after strong guidance upgrades

By Danielle Austin

Continuing momentum in the detached housing market has driven strong results from CSR’s Building Products segments, as reflected in the company’s first half results. Before-tax-earnings from the segment were up 25% on the previous period, beating consensus forecasts by 6%. Compared to the previous period segment revenue was up 3% and the earnings-before-tax margin increased to 14.7% from 12.1%.

Analysts from Citi felt results were a mixed bag and noted declines during the period in both high density and commercial construction were a slight drag on results, but the strong demand in the detached housing market more than offset any negative contributions. Looking ahead, Citi expects the impact of fewer trading days to be evident in the Building Products segment’s second half results and expects pricing to be relatively flat.

Credit Suisse also suggested a slight first half skew will appear in Building Products’ full-year results. The broker noted the Property segment continues to report strong results, as well as the company upgraded segment before-tax-earnings guidance for FY22 to $34m, a huge beat on an expected consensus $26m. The broker also highlighted the company is guiding to around $50m in earnings for the segment from FY23-25, with additional uncontracted potential upside.

Similarly, Macquarie noted while the Building Products segment reported an exceptional outcome for the first half, it is continuing realisations in the Property segment that is building CSR’s earnings profile. Commenting on CSR’s guidance for the Property segment, the broker noted while the FY22 outlook is marginally stronger than expected, the FY23 outlook is markedly stronger than expected.


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