22/03/2018 - 11:13

Brickworks lifts WA results

22/03/2018 - 11:13

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Building materials company Brickworks said today its Western Australian division has returned to profit following a major restructuring, one month after competitor Boral said it recorded a break-even result in WA.

Lindsay Partridge expects further earnings improvements.

Building materials company Brickworks said today its Western Australian division has returned to profit following a major restructuring, one month after competitor Boral said it recorded a break-even result in WA.

Brickworks has undertaken an extensive restructure in its WA business aimed at lowering costs, with the closure of six factories over the past year.

Chief executive Lindsay Partridge said today the WA arm produced positive underlying earnings (EBITDA) in the six months to January, despite a further decline in demand and sales, and the company is expecting further improvements following the commissioning of its upgraded Cardup plant.

Boral’s local division, Bricks WA recently delivered a break-even earnings result for the half-year to December, with a 15 per cent decline in revenue more than offseting cost-reduction measures from restructuring.  

Mr Partridge said detached housing approvals in WA are at their lowest level in more than 15 years.

This decline, combined with the entry of BGC Australia subsidiary Brikmakers into the market, has seriously damaged the performance of the listed companies.

The result for Brickworks' building products division included $3.1 million in after-tax costs, including the commissioning of upgraded plants in WA and Queensland, and restructuring activities within Austral and Auswest Timbers in WA.

Earnings for Auswest were down 5 per cent to $24 million, with Mr Partridge saying WA had recorded improved results while interstate operations deteriorated.

Upgrade activities continued in the half-year period, with the installation of a large log line at Greenbushes.

Brickworks purchased masonry manufacturing business Urbanstone last November for $13.5 million and said the integration of the new business into Austral Masonry had progressed well.

Its Bristile Roofing business reported a drop in sales and earnings in WA for the period.  

Mr Partridge suggsted trading conditions in WA would improve.

“Conditions in WA remain difficult, although they appear to have bottomed, and restructuring initiatives undertaken last year has resulted in improved performance that is expected to continue in the second half,” he said.

Across all its operations, Brickworks posted a 4 per cent increase in underlying profit to $115.6 million, while statutory net profit was down 6.8 per cent to $97 million, compared to last year.

The company’s building products revenue was up 7 per cent at $396.2 million while the company also increased its interim dividend slightly to 18 cents.

 

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