CSR (CSR) underwent a major transformation last year as the chip company exited from the handset market – where it had been outflanked by competition – and honed its focus on core products where it held an advantage. It also returned $285m (£188m) to shareholders. Encouragingly, the business finished the busy year trading well, a trend that has continued into the new financial year.
In the fourth quarter, CSR reported a 7 per cent year-on-year revenue increase from core growth products and a rise in gross margin from 55.8 per cent to 59.2 per cent. Core sales accounted for 62.4 per cent of the total in the fourth quarter and prospects look encouraging for its auto and voice & music businesses. Platform sales now account for 58 per cent of group revenues, up a couple of percentage points in a year – a promising trend since this segment of the business is capable of generating higher margins and returns because of their complexity compared with individual components. Legislation regarding in-car phone use in China resulted in a boost for WiFi sales in CSR's legacy products division and better-than-expected sales overall from this part of the business.
Cash generation continues to be very strong and management has announced a $50m (£33m) share buy-back programme. Broker Numis expects 2013 underlying pre-tax profits of $94.8m and EPS of 43.3¢ (from $72.5m and 27.3¢ in 2012).
| CSR (CSR) | ||||
|---|---|---|---|---|
| ORD PRICE: | 420p | MARKET VALUE: | £696m | |
| TOUCH: | 419-420p | 12-MONTH HIGH: | 440p | LOW: 194p |
| DIVIDEND YIELD: | 1.9% | PE RATIO: | 25 | |
| NET ASSET VALUE: | 419c* | NET CASH: | $332m | |
| Year to 31 Dec | Turnover ($bn) | Pre-tax profit ($m) | Earnings per share (c) | Dividend per share (c) |
|---|---|---|---|---|
| 2008 | 0.70 | -6.5 | -5.0 | nil |
| 2009 | 0.60 | -14.2 | -7.0 | nil |
| 2010 | 0.80 | -5.7 | 9.0 | 6.5 |
| 2011 | 0.85 | -51.5 | 19.0 | 10.3 |
| 2012 | 1.03 | 102.0 | 26.0 | 11.8 |
| % change | +21 | +37 | +15 | |
Ex-div: 8 May Payment: 31 May *Includes intangible assets of $303m, or 182¢ per share £1:$1.52 | ||||
