CSR - CSR Limited

[noirua]

Holding up well are CSR after the news a few weeks ago that the Pioneer Mill, Cane crushing juice clarifier vessel, was commissioned 5 weeks ahead of schedule.

 

[noirua]

CSR managed to increase profits in the first half by 12% but an asbestos provision of AU$48 million proved to be another setback.
Stronger results from the sugar division was encouraging, the Aluminium division did a tad better than flat. However, the building division has seen setbacks.
A dividend of 6 cents shows the company has little prospect to improve the position.
The tanking Aussie is helping and this year should be reasonable in the economic circumstances.
Shares are on a 7.1% yield at a PE of 14.2. The earnings yield was only 7%.

 

[ozambersand]

First the ASX gave a "braking" ticket (well what is the opposite of a speeding ticket? ) as the price dropped suddenly.

So CSR has gone into a trading until Tuesday 18th.

What's the goss. Has anyone got any decent speculations?

Share offer to raise cash and reduce debt?

Take over (who would be likely to?)

 

[ozambersand]

OK Found answer.

According to today's Financial Review there will be a $300+ million dollar rights issue "at a steep discount to current price".

Hope it's a discount on closing price not the price of a few weeks ago, lol.

I can see lots more of these coming in future and wonder whether shareholders available funds will eventually dry up for those companies not jumping on the bandwagon now.

Personally, I hate them as you are virtually forced to get them if you don't want your stake in them to be diluted and overpriced.

Still, better than the company being taken over at a price well below what you paid for them.

 

[DionM]

Interesting. I was hovering over the buy button recently - thinking about buying more to average down. I have been selectively increasing my holdings over the last fe months.

I'm not a huge fan of SPPs either, but for me (as a small investor) it's a nice way to buy more without paying brokerage.

 

[noirua]

CSR is starting to look stronger now, from very low levels. A lot of faith from investors and Institutions has put them back on track, of sorts.

 

[nth brisbanite]

CSR is starting to look stronger now, from very low levels.

I hope you are right as I've got quite a few CSR shares. What information have you got to back up this statement?

 

[Garpal Gumnut]

Interesting. I was hovering over the buy button recently - thinking about buying more to average down. I have been selectively increasing my holdings over the last fe months.

I'm not a huge fan of SPPs either, but for me (as a small investor) it's a nice way to buy more without paying brokerage.

CSR is starting to look stronger now, from very low levels. A lot of faith from investors and Institutions has put them back on track, of sorts.

I hope you are right as I've got quite a few CSR shares. What information have you got to back up this statement?

Living in the north, CSR is never far from my radar of stocks to buy.

I'm looking at it, it is near $1.30 which is a long term support resistance line.

Then again its been down to 60-70c in the late nineties , and if this is not the bottom then thats where its heading again.

Its in a hell of a down trend at present.

But like you guys I've been looking at it.

gg

 

[noirua]

CSR closed at $1.62, about 22 cents above the recent placing and well down on the $4 or so in 2006. Seem to have lost their way after Rinker Group broke away.
Rinker went on to $23 and were bought out at around $18.00 by Cemex. This shows the order of the poor management decisions at CSR and the asbestos factor coming home to roost.

 

[ozambersand]

It's possibly worth noting here that Cemex was trading on the New York stock exchange around the $30 plus mark for most of the time until May 2008 where after reaching $32 it declined steadily to $17.15 in September 2008 and then had a massive dive (like most of the world's stock) to about $7 in November. yesterday it was trading at $9.25. So $30 to $9.25 = 70% decline.
In contrast, around the time Rinker was split off, CSR shares were trading around the $3.50 mark. They are currently trading at $1.625 a 53% drop.
So one might argue that in comparison they have been holding up better.
Considering that the ASX has dropped about 50% past its peak, CSR seems pretty average to me.
A lot of commentators are suggesting it split further and hive off aluminium and the building section or the sugar section. I think its diversity can be a strength.
I would like to see it go further along the route of buying up good energy effecient building companies and specialise that section in those areas.
It's probably not the best time to do that yet and now like everyone else they are probably just hoping to survive the downtrend. However, if they are still there when the dust settles that's where I would like to see them headed.

 

[tigerboi]

Re: CSR-Adelaide the best division

Adelaide is certainly doing their best to keep this recession at bay,what recession?ive been flat out since february running a stack of CSR gyprock & lots of beer from fosters & tooheys in sydney into your west end brewery.

the rest of the states are dead with sydney & melbourne having some drivers waiting up to 4 days to load out,brisbane last time up there in march was a ghost town with most drivers trying very hard to not go there as the freight volumes have dropped 50% plus.

most interstate companies are running their trailers empty from brisbane.

I will be watching CSR closer now that ive been doing heaps of their work...tb

 

[noirua]

CSR to Unlock Value With $1 Billion Sugar Spin-off: http://www.theaustralian.news.com.au/story/0,,25652217-643,00.html?from=boardroom+radio_rss

 

[noirua]

CSR to Unlock Value With $1 Billion Sugar Spin-off: http://www.theaustralian.news.com.au/story/0,,25652217-643,00.html?from=boardroom+radio_rss

Even more interesting as Aluminium along with Copper wire and pipe are amongst the largest buy-ins of commodities by China. Could give CSR a further lift.

 

[noirua]

CSR are recovering on the increased enthusiasm for the Sugar-spin-off (about AU$1 billion) and Chinese buying of Aluminium and copper. Looking a more encouraging stock on these factors that has driven the stock upwards, slowly but steadily.

 

[So_Cynical]

CSR are recovering on the increased enthusiasm for the Sugar-spin-off (about AU$1 billion) and Chinese buying of Aluminium and copper. Looking a more encouraging stock on these factors that has driven the stock upwards, slowly but steadily.

Well there's certainly something other than the dividend yield driving the share price up
if the new divi holds...buying at the current SP will deliver a yield of less than 2%

Surely it cant last...the CSR rally that is. :dunno:

 

[noirua]

Well there's certainly something other than the dividend yield driving the share price up
if the new divi holds...buying at the current SP will deliver a yield of less than 2%

Surely it cant last...the CSR rally that is. :dunno:

CSR shareholders may be hoping for a one for one share distribution of the sugar side of the business (similar to Rinker spin-off) or a capital distribution, or a combination of both.

Hi So_Cynical et al, 225 million new shares issued does leave the dividend situation looking sparse, as you infer. 2008 dividend was 15c a share (held for many years) and the interim for 2009 a miserable 1.5c.
At least, if they sell off just 25% of the sugar operation it may inject between $200 - $250 million into the company. Much needed to get the company off in the right direction.

 

[kenny]

Interesting article in the Australian today discussing how GMG should be rather miffed at the recent demerger discussions. I wonder if they will bring something to the Board again?

Cheers,

Kenny

 

[orixz]

CSR in trading halt ahead of capital raising

Building materials, glass and sugar firm CSR is on a trading halt. It's hoping to raise $375 million by selling shares so it can pay off debt, as it gets ready to spin off its sugar business. The company posted a net loss of 156 million dollars for the first half of the financial year.

An opinion piece in the Australian that I read today is largely negative about the capital raising in general - since I can't post links you can read about it on google

Having a few shares in CSR myself, I was wondering what the opinions of the more seasoned investors on this board are with the regards to motivations behind the capital raising and how it could affect the proposed demerger?

 

[So_Cynical]

I was wondering what the opinions of the more seasoned investors on this board are with the regards to motivations behind the capital raising and how it could affect the proposed demerger?

CSR have been very up front about the capital raising, its to pay down some debt and cash up the two CSR's for the demerger.

 

[noirua]

Looks as if it's sugar on the one hand and a housing/Aluminium venture on the other. When cashed up they will both look fairly attractive. Not that I'm interested in putting cash in until they've been split.
If markets continue to trend lower there could be an opportunity in 2010 to pile in - watching and waiting at the moment.