Business Description:
CSR Limited (CSR) is an Australian manufacturing group. The company manufactures and supplies building products in Australia and New Zealand. The group also has an interest in aluminium smelting, and property through advancing industrial land through development processes.

Strategy Analysis:
CSR operates a moderately diversified portfolio. Business strategies are aimed at maximising any advantages of diversification. The sale of Sucrogen should improve management focus. CSR is involved in industries which are cyclical, unrelated and somewhat capital intensive. Market positions in Building products provides some pricing power but success is reliant on management and competitive cost structures. The company is focused on meeting community expectations and operating in a sustainable way. Priorities include: driving efficiency and productivity across all businesses, carefully managing capital and investing in organic growth and acquisitions that leverage strengths. The Building Products strategy looks to position the business in order to maximise the benefits from the inevitable housing cycle upswing. CSR reported NPAT of $34.9m for the half-year ended 30 September 2011 compared to $63.0m in the same period last year (the prior corresponding year included the Sucrogen and Asian insulation businesses sold on 22 December 2010). Revenues from ordinary activities were $937.0m, down 4% from the same period last year. Basic and Diluted EPS was 6.9 cents compared to 6.1 cents last year. Net operating cash flow was $29.7m compared to $50.6m last year. The interim dividend declared was 6.0 cents compared with 9.0 cents last year. Looking ahead, the group noted the current analysts' consensus range for NPAT (pre-significant items) is $82m to $100m for the year ending 31 March 2012 with a median of $87m. Assuming no further significant deterioration in construction volumes or in A$ aluminium prices, the group expects that NPAT for continuing operations (pre-significant items) will be at the lower end of this range.