Brickworks to review its WA position

Brickworks has reported a record profit jump in the past six months, but the company describes its Western Australian operations as “loss-making.”

The brick maker, which runs Austral Bricks and Bristile Roofing, made $581 million net profit after tax in the six months to January 31 2022, a 720 per cent jump on the prior corresponding period.

Brickworks’ sale of its Washington H Soul Pattinson shares when the investment house merged with Milton accounted for $251 million of its half yearly profit.

The company’s underlying earnings before tax, earnings and depreciation were $488 million, up 200 per cent, and its earnings before interest and tax were $450 million, up 254 per cent.

Shareholders will receive a dividend of 22 cents a share, up one per cent on the prior corresponding period.

Brickworks managing director Lindsay Partridge said Austral Bricks’ earnings and revenue in Sydney, Melbourne and Queensland was strong, while WA lagged.

“Although sales have improved significantly in Western Australia, operations in this State remain loss-making and continue to be a drag on overall performance,” Mr Partridge said.

“The current situation is unsustainable, and we will be forced to review our position in this market, unless sales margins improve substantially during the remainder of the current upturn.”

He added that the company had been “impacted by issues such as a shortage of roof tilers across the east coast and a lack of available transport in Perth”.

“These supply chain issues have been exacerbated by pandemic-related construction restrictions and absenteeism, resulting in on-site construction timetables extending significantly,” he said.

In 2018, Brickworks undertook a restructure in WA, including closing six factories and upgrading its plant in Cardup.

Brickworks competitor in WA is BGC Australia, which in 2020 merged its Brikmakers operations with the recently-purchased Midland Brick operation.

BGC is the state's largest brickmaker. 

Brickworks’ share price was up 4.96 per cent to 22.87 cents at the time of writing.