How are CSR (ASX:CSR) shares reacting to its AU$100M buyback plan?

3 min read | June 30, 2022 11:43 AM AEST | By Ashish

How are CSR (ASX:CSR) shares reacting to its AU$100M buyback plan? — Image source: © Sarawutnirothon |Megapixl.com

Highlights

CSR has announced a share buyback of up to AU$100 million.

The building products company plans to invest in its long-term growth strategy and improve shareholder returns.

CSR has also reaffirmed its outlook for the year ending 31 March 2023.

CSR Ltd (ASX:CSR) on Thursday announced a share buyback of up to AU$100 million as the company plans to invest in its long-term growth strategy and improve shareholder returns. The ASX-listed building products company’s on-market share buyback would be in addition to its existing dividend policy, said CSR in its latest ASX filing.

The company said that share buyback’s timing and the number of shares to be purchased would depend on its share price, capital requirements and cash flow generation. “This is consistent with CSR’s recent history of proactive capital management,” CSR noted.

What did CSR’s management say?

CSR Chair John Gillam said that the company’s robust balance sheet was powering its continued investment in its Building Products business.

“We are also progressing major property development projects that will deliver short and long-term earnings, alongside the hedged Aluminium position. This highlights CSR’s strength and prospects for the coming years,” he added.

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Commenting on the development, CSR CEO and Managing Director Julie Coates said that the company’s buyback plans are expected to boost capacity, and growth by improving performance.

“Given our robust balance sheet and strong operational performance, CSR is able to invest in growth while also increasing returns to our shareholders via implementing an on-market share buyback,” Coates added.

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Outlook

The company also reaffirmed its financial outlook for the year ending 31 March 2023. For the year ended 31 March 2022, the company reported a net profit of AU$271 million, an 86% rise on the prior corresponding period (pcp). CSR posted a 9% on-year jump in trading revenue to AU$2.3 billion. The board of CSR also declared a final fully franked dividend of 18 cents per security. The company had ended the year with AU$178 million in net cash.

CSR’s share price snapshot

Following this update, shares of CSR were trading at AU$4.14, up 0.49% at 10:24 AM (AEST). The share price has fallen over 28% in the past year. The stock is down nearly 32% on a year-to-date (YTD) basis. The share price has dipped over 11% in the past month. The 52-week high and low of the CSR stock stand at AU$6.40 and AU$3.93, respectively.

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