Capral (ASX:CAA) CEO & Managing Director Tony Dragicevich talks about the market for aluminium products and solutions, its national footprint, 26% market share, FY20 results and outlook.Thank you, Clive. Well, welcome everyone. This afternoon we're going to speak and talk to you about Capral.
As Clive alluded to, Capral is the largest supplier of aluminium extrusion and sheet products into the Australia market. And we've been operating here for over 80 years. Our core business is the manufacturer and distribution of aluminium extrusions produced in what we are now six manufacturing plants, and distributed through 18 distribution centers throughout Australia. Aluminium is strong, but also lightweight, and it's the preferred material used in lightweight construction applications. Our key market is residential and commercial construction where we supply our customers who are fabricators of windows and doors, fencing systems, facades, and other building systems. We also supply to a wide range of industrial sectors including truck and boat building. Sales revenue exceeds $430 million. We have an estimated market share of 26% and currently employ over 900 people with 825 permanent employees. So that's just a general overview of the business.
So moving on to the next slide. I just want to talk about our results for the 2020 year. We run a calendar financial year, so these results are for the 12 months end of December, 2020. It was a tale of two halves. So the volumes overall are 8% to 61,000 ton. All of that volume increase came through in the second half of the year with the first half being significantly impacted by COVID restrictions, albeit we were able to pretty well operate and continue to operate our plants through that period. The trading EBITDA finished quite strongly in the year at $19.7 million, up from $11 million in the previous year and a very strong second half due to higher sales demand, particular gaining share from imports. There are three reasons for that import market share gain. Number one is the effectiveness of anti-dumping measures that we've had in place for the couple of years. The second reason was the disruption to import supply chains, post COVID, and we were able to take advantage of that. And thirdly, there's been a growing Australian made sentiment in relation to Australian products in the last six months. We have a very strong balance sheet with net cash of close to $50 million at the end of December. Normalised earnings per share at $0.66 and we paid a final fully franked dividend of $0.45 per share.
I want to talk a little bit about Bremer Park and a significant milestone event for Capral. Three years ago, Capral encountered some headwinds. Volumes had fallen as a result of growing imports and a slowing housing market, and this had a major impact on our Bremer Park site, which is our largest site within Capral. As a consequence, we embarked on a major restructure of the Bremer plant in the second half of 2019. This involved the closure and removal of unprofitable operations, the sublet of part of the site and investment in automation of the packing lines at Bremer Park. This resulted in the removal of $8 million of cost from the business and represents a significant turnaround point for Capral with Bremer now contributing profitably and solidly profitable. In February this year, Capral acquired the G James extrusion plant at Smithfield in Sydney. This acquisition is strategically important with New South Wales being our largest market. The plant is in excellent operating condition and was acquired for less than 30% of its replacement value. We were very pleased with acquisition and we see Smithfield as being a positive contributor for us in the years ahead.
So we can move to the next slide, please. This slide just gives you a representation of our business. So 84% of Capral's total volume is extrusion, the vast majority of which we manufacture in our own plants and 60% of our sales are made up of imported roll product, which effectively is sheet and plate, aluminium sheet and plate. The channels to market, as you can see from the middle graph there, 56% of our total sales in Capral is extruded aluminium directly from our manufacturing plants to our large customers. Around 44% of our total volume goes through our own distribution centers. As you can see there, 28% of that is extruded aluminium and the balance being 16% of sheet and plate, what we call roll product. Our exposure to the various industries in which we play, certainly we see the residential and commercial construction markets representing 55% of our total volume. And that's by far and away our largest individual segments, and with the major products going into windows and doors into those sectors. Around 45% of our volume goes into a wide variety of industrial markets, the largest which are marine and transport, but there's also a very, very wide variety of industrial applications.
Okay, so we move to the next slide. As I said earlier, one of the key markets for us is residential construction and this slide represents housing starts over the past 10 years. Capral's products primarily end up in the green parts of the graph, which is detached housing and low-rise multi-res. High rise apartments are largely the domain of fully imported windows. So aluminium extrusions that we supply locally, don't end up in a significant amount of those high-rise apartments. So when we look at this graph, we're mainly focused on the green parts of it. As you can see in 2020, certainly the first half was required, obviously with COVID restrictions, but bounced back strongly in the second half of 2020 on the back of very low interest rates, home builder stimulus and state government first home owner incentives. The outlook for 2021 is very strong, particularly in detached housing, which is a core segment for Capral.
So moving to the next slide. Just some examples of where Capral's products end up, particularly our extrusion products. And then we have here three examples of commercial buildings where our products have ended up and also a private residence, just to give you some idea of where we end up, okay.
Moving to the next slide. Talking about the industrial sector which represents around 45% of our total volume, you can see there a slide of Capral sales over the past eight or nine years, and with good growth in 2020, despite the impacts of COVID in the first half of the year. So just talking about those key sectors for us, marine was actually slower last year, due to timing of boat builds and we lost some export market share to the Austal businesses in the Philippines and Vietnam, where they start to import raw product directly from China rather than us getting into Australia and we send it back up there, but very low margin business. But still, there was a little bit of share loss there. Transport market is the other big sector for us. A quiet year in 2020 impacted by COVID restrictions, but we're starting to see a strong lift in the first part of 2021. The manufacturing and general fabrication industries have bounced back out of COVID very strongly and partly due to the import replacement volumes that we've enjoyed in the second half of 2020, and continue to do in 2021. Solar is a new market for us. This is traditional solar rail sits under solar panels. We're talking about the rail that solar panels sit on, in both commercial buildings and residential buildings, which has been the domain of imported aluminium extrusion for a number of years. As a result of anti-dumping measures that were put in place about eighteen months ago, we started to grow local share in the sector and it's become a very strong earner for us. And we see that trajectory continuing into the next year.
Moving to the next slide. We've just got a few examples of where our industrial products end up. An off-shore patrol vessel there, top left hand corner, a very large commercial ferry with about a thousand ton of aluminum destined for Europe, built in the Austal shipyards in Western Australia. A piece of architecture there in South Perth. And I trailer unit, so all the aluminium siding, which is aluminum sheet, but all the structure of that vehicle is aluminium extrusion, which we produce at our plants around Australia.
Moving the next slide, we talk about the outlook for 2021. So first of all, we see the housing starts growing by 17%. I think the latest stats may be even stronger than that, which came out a couple of days ago, will certainly underpin our volumes for the year ahead. The commercial construction and industrial sectors are forecast that rebound strongly post COVID. We will be focusing at Capral and also at growing our own aluminium distribution business. As you can see from one of the earlier slides around 44% of what we produce goes through our own distribution business. And this is at a higher margin segment for us. And we've got a big focus on continuing to grow and expand that.
The Smithfield plant, we've spoken about that acquisition very important to us, and it'll be strategically important for us in the years ahead. Last week we upgraded our 2021 trading EBITDA forecast from around $22.6 million up to now $25 to $27 million on the trading EBITDA basis. That is roughly around about an excess of 25% increase on where we finished 2020. So we're forecasting a strong earnings growth in the year ahead. And certainly the year has started off that way. On that basis, we will be in a position to continue to pay fully franked dividends for some time. Certainly, the Capral board sees that this is our key, one of the key drivers, or one of the key underpinning things for Capral is our ability to continue to pay dividends, and solid dividend during going into the future. So that's it, we saw that 2020 was a year disrupted by COVID. We were one of those industries that was fortunate enough to be able to trade through or operate through that period despite the fact we saw a significant decline in order intake in April and May last year, which was significant, but the market has bounced back quite strongly as a result of government stimulus packages and import supply chain disruption, which we expect, which we're still experiencing now.
The impact of the growth in the housing market we're only just starting to see that flow through onto extrusion demand in the first quarter of this year, and we expect that will continue right through this year and well into 2022. So that's a summary of Capral. We're very pleased to have come through what was an extremely difficult period in 2020 with COVID restrictions placed both on us personally, but as a business, and it's really very pleasing to see the business come out of that and in a very strong shape. So thank you for listening and thank you for your continued support. Here we have some contact details.
