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CSR takes a belated squint through the looking glass

Post Time:Jan 12,2009Classify:Industry NewsView:118

Since Jerry Maycock became the boss of CSR just over 20 months ago, the beleaguered sugar, aluminum and building materials conglomerate is understood to have received a number of serious restructuring proposals - including a few put forward by one of its larger shareholders, Sir Ron Brierley's Guinness Peat Group.

CSR will release its full-year results on May 13 and, barring a big turnaround in its glass business, the company will find it challenging to meet its revised guidance of flat earnings of $386 million for 2009. The reason is simple: its businesses are being hit by the global financial crisis. But the division that most investors will critically examine is glass. Looking at it another way, when Maycock took the top job on April 1, 2007, CSR had 876 million shares on issue, $450 million in debt and was doing share buybacks at $3.40 a share. Instead of doing a break-up of the company when it had the chance, Maycock and the board embarked on an acquisition strategy funded by debt. CSR's glass acquisitions - the $690 million purchase of Pilkington Glass in June 2007, followed three months later with the $175 million purchase of Don Mathieson & Staff Glass - have been a massive disappointment from an earnings perspective, according to a Jan. 13 report in The Australian.

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