This morning shares of Brickworks Limited (ASX: BKW) traded slightly higher following the release of its half year financial report.
In the six months to 31 January 2015, Brickworks' statutory net profit after tax fell 25% to $42.2 million on revenues of $349.6 million, up 7.4% on the prior corresponding period.
However excluding non-cash impairments of $16.8 million – which reflected a delay and the risk of achieving operational efficiencies – the company's normalised profit was 17.6% higher, at $62.8 million.
Another pleasing takeaway from today's report was the declaration of a 15 cents per share interim dividend, fully franked, representing a 7.1% increase in the payout year-over-year. The dividend will be payable on 5 May 2015.
Chairman Robert Millner said, "A feature of the result was the increase in earnings across all three of our businesses – Building Products, Land and Development and Investments – which again demonstrates the strength of our diversified corporate structure."
Indeed, each of the three businesses grew strongly during the half with earnings before interest, taxes and significant items climbing 35.9%, 7.2% and 27%, respectively.
Managing Director, Lindsay Partridge, says surging demand for new land and housing is being burdened by a lack of adequate supply.
"The current upturn in housing activity shows no sign of easing, with Austral Bricks orders at record levels and many customers continuing to report that order banks extend for up to a year. The booming demand is resulting in the industry now being restrained by issues such as trade shortages and inadequate supply of titled land in some states," Mr Partridge said.
He said the Building Products Group is positioning itself for the expected ongoing demand, which will likely translate into, "significantly improved earnings in the second half of the financial year, compared to the prior corresponding period."
Looking ahead, Brickworks' management said Land and Development earnings for the 2015 financial year are expected to be in line with the prior year, subject to the value and timing of property transactions, whilst also forecasting an increase in full year earnings from the Investments division.
