CST Half Year Results. Commentary.

Well, the results for the HY have come in at the low end of the "guidance" that various pundits had estimated from the comments made at the AGM. We all knew that the financial results for this HY were not going to demonstrate the stellar growth that CST has shown in the past. Not that it stopped many of us (me included) from hoping for something a little better.


We all know the reasons behind this.

• The strength of the $A.
• The ongoing impact of the GFC.
• The diversion of resources to the H1N1 (swine flu) epidemic.
• The delayed release of QFT In-tube in Japan.

Whilst the Japan launch has now happened we are advised that we are still at the mercy of the other issues for the second half. Regardless, the Company does expect ongoing growth. 

I am sure that we would all have liked a slightly larger dividend.  I presume that the reason for a dividend of only 1.5c ff is that the company is exercising its previously stated desire to maintain full franking of dividends.

Having stated the above, there is little in the actual figures that need comment.

Expenses all seem in order with Revenue. While Revenue rose 26% cf pcp, EBIT rose 28% and Expenses rose 22%. 

Inventories are up slightly but not so much that it raises any concerns. Possibly that was simply a requirement of the the Japan launch that was imminent as at 31st December.

Gross Margin of 61% is in line with previous accounts.