The Chairman performed effectively at yesterdays general meeting where some testing questions were asked. His responses were concise, clear and relevant.
The allocation of returns to shareholders is about right. As the chairman indicated, by discharging much of the debt, the impediment of financing charges on bottom-line profits is removed. This may provide good insulation (forgive the pun) for the company against any future interest rate rises or sudden deteriorations in macro conditions .
Subject to earnings results, I would still like to see a generous ( 9 to 12 cents) fully franked ordinary final dividend paid to shareholders. I believe such a dividend is affordable and appropriate in these circumstances.
Management must now focus on improving efficiencies and margins within the existing operation.
CSR has a solid platform for growth. It would not surprise me to see some small bolt-on acquisitions occur within the upcoming year as opportunities arise.
However, if this executive team is to gain credibility, it must turnaround the Viridian operation and get it generating positive and acceptable returns. In my view, this will be a key factor in achieving earnings growth for the company.
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