Lower dollar to lift CSR bottom line
The big decline in the value of the Australian dollar will be positive for CSR after a year with elements of "the good, the bad and the ugly", its chairman has told shareholders.
"We've seen a significant correction in the value of the Australian dollar recently ... and that's a positive for CSR," Jeremy Sutcliffe told Thursday's annual meeting.
He said one of the lows for the year was the $196 million write-down against the value of the Viridian glass unit, the "bad" was the lack of any pick-up in construction sector activity, and the "good" was the improvement in shareholder return marked by a share price rise and the fact that its building materials arm outperformed competitors.
CSR shares closed up 2¢ at $2.29, extending a rally from a mid-June low of $1.95.
Over the past month or so some analysts have upgraded their recommendation for CSR, but the share price remains hamstrung by the price of aluminium, given the group's direct exposure to production of the metal.
Managing director Rob Sindel said the group expected to see 147,000 housing starts nationwide in the year to March 2014, with growth of up to 8 per cent expected in Western Australia and NSW.
Leading indicators are pointing to a recovery in housing construction, with rising building and finance approvals.
The group had "significant leverage to any upturn in the construction market activity and the aluminium price", Mr Sindel said.
Analysts said a revival in housing starts, the prospects of a turnaround at Viridian and growth at the Hebel building products unit might provide some upside to earnings in the near term.
Citi, however, maintained a "sell" recommendation on the stock.