Brickworks Limited (ASX:BKW) released its half year report to the ASX on Thursday. The materials company reported a net profit of $42.2, down 25 per cent from the $56.3m recorded a year earlier. Revenue rose from $325.62m to $349.62m, a 7.4 per cent increase. Brickworks will increase its fully-franked interim dividend by 7.1 per cent to 15c per share. The company said that continued growth in sale volumes and cost reductions would put the company in a position to deliver “significantly improved earnings in the second half of the final year.” Chairman Robert Millner said that all three divisions of the company – building products, land and development, and investments – had stronger earnings.
Brickworks has cited potential issues within the land and bricklaying industries. Brickworks chief executive Lindsay Partridge has said there is delay of up to a year for new houses in some markets due to a lack of land releases and tradespeople. “This is rapidly pushing up prices and reducing the average lot size.” These delays are causing backlogs in the housing boom. “Despite surging demand, Sydney still has the lowest number of lots being released for housing development of all major capitals,” Mr. Partridge said. Earlier in the month, rival CSR said they would attempt to remedy the situation by speeding up the release of new land in Sydney.
BKW was up 30c, or 2.21 per cent, at $13.86 per share at close on Thursday. Although shares of Brickworks are down over 2 per cent in the last 12 months, it has been performing better this year, rising over 14 per cent so far this year.