CSR wary on outlook after $326m loss

CSR Ltd (ASX:CSR) has emerged from its worst financial performance on record unwilling to provide shareholders with guidance on its prospects in the next year because of the uncertain economic climate.

The company yesterday reported a thumping $326.5 million loss in the year to March 31 after restructuring costs, asset writedowns and the impact of the slowdown on its key building products operations. The loss represents a huge turnaround on a previous profit of $177.4 million.

CSR managing director Jerry Maycock said it was one of the worst results he had ever delivered, and passed on the bad news to shareholders by slashing full- year dividend by 50 per cent to 7.5c per share, down from 15c. The company plunged into the red after significant items blew out to $460.5 million, which included a one-time charge for asset writedowns, restructuring costs and product liability losses.

Is this as bad as its going to get ? My thought is that it will get better for this company with the new budget Infrastructure spending. There may also be a rush to build homes in the next few months with the rush to ensure people take up the first bome buyers grant.

Good Luck

CSR rumour causes price surge

CSR Limited (ASX:CSR) shares continued to rise yesterday despite management denials of takeover talk. The company told the sharemarket it had no knowledge of a rumoured $A4.30-per-share offer. Nevertheless the shares jumped six per cent to their highest level since May 2006. The widely differing nature of CSR's main businesses - sugar, building materials and aluminium - in a time of intense private-equity activity has convinced many in the market that the company is an extremely likely takeover target by various players.

CSR Limited is a good company that is diverse enough to sit through the troughs in each sector of its operations. The only thing I don't like about it is that none of the operations seem to match up in anyway and therefore I wonder at managements effectiveness of essentially running three different businesses.

Speulators are again clutching at straws here as management has no idea about this takeover talk. Still this could get people thinking and it may lead to a takeover by a rival company or a private equity firm who may piece meal it and sell it off to other businesses at a later date.

Good Luck investing.