BRISTILE Limited shareholders who have held the faith were finally rewarded for their patience with a one-year TSR performance of 101 per cent for the year to June 30 2001.For some it has been a while coming. Bristile Limited was floated by parent company, Futuris Limited, in October 1997 via the offer of 88.2 million shares at $1.70, having been formed from the assets of a number of Perth clay brick and paving manufacturers and the Bristile clay roof tile operations.On listing, Bristile shares were subsequently re-rated by the market and, ultimately, did not trade above their issue price until the first half of 2001.Clay brick manufacture is a capital-intensive industry with demand linked primarily to the housing cycle. While there are limited opportunities for exports, market growth is limited by long-term market factors.Within WA competition in the brick and paving market is provided by Midland Brick, part of the Boral Limited group. Bristile is the only manufacturer of clay roofing tiles in WA.Bristile Limited has made two major acquisitions since listing. The company acquired 40 per cent of Wesfi, a manufacturer of timber products. This ultimately was sold to Amatek Holdings Limited. In December 1999 Bristile Limited acquired a series of assets from Pioneer International Limited. Through the Nubrik and Hallett Brick brands, Bristile now has strong market positions in Victoria, Tasmania and South Australia.The $150 million acquisition was funded via a $70 million rights issue and placement with the remainder debt funded. Debt levels have subsequently been reduced through cash flow and further capital management led Bristile to undertake an on-market share buy-back program, repurchasing some $13 million of stock.Bristile directors David Gillam and Paul Depiazzi have a substantial interest in the company, having acquired around eight million shares from CIBC World Markets, one of the underwriters to the rights issue. The Bristile share register was further strengthened with Brickworks Limited acquiring 19.6 per cent share-holding from Futuris Limited in August this year.The full extent of the Nubrik and Hallet Brick acquisitions was seen in the half-yearly report for the six months to December 31 2000.Sales increased from $65 million to $115 million and operating profit after income tax rose from $8.8 million to $17.1 million. Bristile Limited is now the second largest clay brick and paver manufacturer in Australia and is well placed to benefit from the upturn in the building industry and any potential rationalisation of the industry.
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