CSR spree is music to the ears of the City
SHARES in wireless technology firm CSR, which makes chips for use in the Beats headphones loved by Premier League footballers, soared yesterday after it pledged a stock buyback of up to $50m (£31.5m), raised its dividend and said it would cut costs quickly.
CSR shares closed up 20.77 per cent at 275p last night, making it one of the highest risers on the FTSE 250 index, despite posting a fourth quarter loss.
Analysts and investors were cheered as CSR said it had boosted its gross margin in the fourth quarter as its focus on platforms such as audio starts to pay off.
It halted the development of technology for digital television and silicon tuners in December to focus on higher-margin areas such as its chips. These feature in the Beats by Dr Dre headphones, which are worn by footballers including Arsenal legend Thierry Henry, Everton goalkeeper Tim Howard and singer Lady Gaga.
CSR also said it would raise its final dividend to 7.1 cents per share from 6.5 to give a total payout for the year of 10.3, having stacked up $278m in cash or cash equivalents by the end of 2011.
It also said it would deliver $130m of annual cost savings by the end of the second quarter.
The changes provided a diversion from CSR’s fourth quarter underlying operating loss of $4.9m after tax, compared to a $12.5m profit a year ago, reflecting restructuring costs and the integration of Zoran, the imaging technology group it bought last year.
Chief executive Joep van Beurden said: “Customers are still cautious but the situation today, against quarter three and quarter four, is a touch better… Underlying demand has stabilised.”
Revenue for the quarter rose 32 per cent to $244m, towards the top of forecasts, while its gross margin improved to 51 per cent from 48.7 per cent.