26th Nov 2024 13:13
(Alliance News) - Brickability Group PLC on Tuesday reported a decline in pretax profit despite slightly higher revenue, as the new-build housing market in the UK remains soft.
However, the Bridgend, Wales-based construction materials distributor said market fundamentals for housing are strong in the medium-term, amid a structural housing deficit in the UK and the new Labour government's commitment to building 1.5 million new homes this Parliament.
Brickability said pretax profit was GBP7.0 million in the six months that ended September 30, down 56% from GBP16.0 million a year before. Revenue was up 1.9% to GBP330.9 million from GBP324.8 million, but Brickability took a GBP5.9 million impairment loss on financial assets, compared to just GBP414,000 a year before. Depreciation and amortisation charges also increased, as did finance expense.
Adjusted pretax profit was GBP21.9 million, steady on GBP21.8 million a year before, and adjusted earnings before interest, tax, depreciation and amortisation was GBP27.9 million, up 9.2% from GBP25.6 million.
Brickability declared a interim dividend of 1.12 pence per share, up 4.7% from 1.07p a year before, saying this reflected the board's confidence in the company's longer-term outlook.
Trading in the first six months of the financial second half have been in line with expectations, Brickability said.
It is confident of a full-year result in line with market expectations, which it put at adjusted Ebitda of GBP47 million on revenue of GBP630 million. This suggests Ebitda of less than GBP20 million in the second half, down from GBP27.9 million in the first. Profitability will be first-half weighted, due to the phasing of project work in the Contracting division, Brickability said.
On Friday last week, peer Michelmersh Brick Holdings PLC said trading has been "resilient" so far in the fourth quarter of calendar 2024. Michelmersh said revenue, profit and cash will be in line with market expectations.
"Our order intake continues to run ahead of manufacturing capacity as we have focused on growing a well-balanced forward order book with appropriate pricing to support demand," Michelmersh said.
The West Sussex, England-based brick maker will release its results for calendar 2024 on March 25.
Brickability shares were up 8.7% to 60.87 pence on Tuesday afternoon in London. Michelmersh shares were up 0.3% at 105.33p.
By Tom Waite, Alliance News editor
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