CSL Posts 19% Net Profit Boost

By Glenn Dyer | More Articles by Glenn Dyer

CSL was another major company whose shares were sold down yesterday, despite the group reporting a very solid full year profit and a higher dividend.

Like Goodman Fielder and the Commonwealth Bank which both produced good results yesterday, but saw their shares sold off, CSL was also a victim of that age old market dictum – buy on the rumour, sell on the result.

All these companies have enjoyed strong stockmarket performances in the past year – especially CSL.

So it seems rather clear that investors took the opportunity to exit the shares and take easy profits.

Not even suggestions from CSL of a 10% rise in earnings for the coming year could keep some shareholders interested, nor did mention of a possible new share buyback.

So the shares dropped more than $2.50 to $65.33, before closing at $65.70, down $2.01 or 2.7% on the day.

CSL YTD – CSL shares down despite higher profit, dividend and possible new buyback

CSL lifted net after tax profit 18.8% to $US1.216 billion for the year to June 30 on a 7% rise in group sales for the year to $US5 billion, the company said yesterday.

The 2013 result, which was slightly ahead of company guidance on a constant currency basis, compared with a $US1.02 billion profit a year ago.

The blood products and vaccine supplier declared an unfranked final dividend of 52 USc (57c A) a share to be paid on October 4, up from 49 USc in 2011-12. The total is $US1.02, or $A1.12, up 18% for the year.

"Looking into 2014 we see trading conditions being tempered again by ongoing economic pressures," said new CSL chief executive Paul Perreault.

"The company’s core products of immunoglobulin and albumin have performed very well and we have strengthened our margins through a change in sales mix and a relentless pursuit of efficiency," Mr Perreault said.

The company posted a constant-currency profit rise of 21% – its guidance for the year was a 20% rise.

However, Mr Perreault said profits had been boosted by the approval of a new life-saving blood supplement in the US.

He said the company was anticipating profit growth of around 10% this year as, despite the recent performance, trading conditions continued to be challenging as governments worldwide closely scrutinised their health care budgets.

"We do see products continuing growth based on current uses and expanded uses in develop and emerging markets," he said. "We see solid demand for these products globally."

The company said yesterday it could look at another buyback in the coming year, which would be the seventh since 2005.

The current buyback is 97% complete. CSL had more than $US760 million in cash at June 30.

Glenn Dyer

About Glenn Dyer

Glenn Dyer has been a finance journalist and TV producer for more than 40 years. He has worked at Maxwell Newton Publications, Queensland Newspapers, AAP, The Australian Financial Review, The Nine Network and Crikey.

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