Building blocks in place

Building products suppliers CSR (ASX: CSR) and Boral (ASX: BLD) both made strong announcements this week. On Wednesday, CSR reported a 32% jump in underlying interim profit to $92.4 million, its seventh consecutive year of earnings growth. Boral management at its AGM said continuing growth in building approvals had allowed it to raise prices and improve margins, lifting profits 13% in the six months to September. CSR shares closed up 15% for the week. On Wednesday, Boral announced it is on track to achieve a strong FY2016 result. The company expects revenue growth will continue due to strong demand for construction materials in New South Wales and south-east Queensland. The company has experienced lower demand from roads, engineering and major infrastructure projects so far in FY2016, but has responded by reducing costs and divesting surplus property assets. Boral shares closed up 4% for the week. We do not own Boral in the investment portfolio.