Building products supplier, Crane Group has confirmed guidance and reported a sharp fall in net profit for 2010 financial year, but says it expects a better result in the current year.

Profit before significant items was $36.835 million, down 34.7% and came after interim earnings fell 46% to $18 million.

Including one-off items, Crane told the ASX that net profit was $31.897 million for the year, down 26.8% from 2009.

The company declared a final dividend for 22c, down from 28c fully franked the year before.

That made a total for the year of 40c a share, down from the 63c a share in 2009 after interim payout was slashed 46% to 18c a share from 35c paid for the first half of the 2009 financial year.

Despite the lower dividend and profit, investors accepted the company's line that better times are coming and boosted the shares 41c, or a solid 4.9% to $8.79 yesterday. That was in a market up1%.

"Whilst it is too early in the new financial year to forecast performance definitively, at this stage Crane Group expects that net profit after tax, before significant items for FY11 will be higher than that recorded in FY10," the company said in commentary with yesterday's report to the Exchange.

"The extent to which earnings may be higher next year will depend in large part upon improvements in demand for pipeline products in the resources and civil construction sectors.

"Based on the expectation of improved conditions across a number of market segments, the profit performance of all three business units is expected to improve in the year ahead.

"All of the Group's business units have strong market positions, experienced management and clear strategic direction," Crane said.

The company said economic conditions had stabilised in both Australia and New Zealand as the fiscal 2010 progressed.

"Most forward indicators suggest that moderate growth is expected in Australia in FY11, with good growth expected in housing, mining and manufacturing.

"We are expecting no further market contraction in New Zealand in FY11."

Revenue for the 12 months ended 30 June 2010 was $1,863 million, down 12% on 2009.

Segment earnings of $70.4 million were 32% lower than last financial year, with lower earnings in Pipelines were partially offset by higher earnings in Trade Distribution and Industrial Products.

Total EBIT for the group was down 26% and equity accounted earnings were down 64% compared with last financial year.

"A significant item expense of $4.9 million after tax was incurred during the year relating primarily to the accounting impact of tax changes recently enacted in New Zealand and business restructuring initiatives in that country," the company said.

Net debt at 30 June 2010 was $154 million, down $62 million since June 2009.

That fall in net debt came from a combination of lower interest and tax payments and the strong cash flow from most of the company's businesses.

Net financing costs for the year were $19.5 million, down 35% on last year.

"Gearing of 19.0% (measured as net debt to net debt plus equity) is well below Crane Group's target range of 30% to 40%, providing capacity to finance future growth of the business," directors said.

That fall in debt and gearing has led to some analysts speculating that Crane could be looking for acquisitions.