The Brickworks Limited (ASX: BKW) share price will be on watch on Tuesday following the release of its annual general meeting presentation which included a trading update.
How is Brickworks performing in FY 2020?
According to the release, Brickworks has had a mixed start to the new financial year.
During the first quarter the company's Building Products Australia segment has seen its sales and earnings fall compared to the prior corresponding period. However, management notes that its order intake is progressively strengthening. Furthermore, builders are reporting increasing home sales.
Nevertheless, for the first half, the Building Products Australia segment is expected to be the low point. This is due to high energy costs, low building activity, and particularly difficult conditions in Western Australia.
Pleasingly, the Property segment continues to perform strongly. Management advised that this is due to the completion of new developments and possible capitalisation rate compression. Furthermore, for the full year, additional land sale profit is anticipated from the sale of 10 hectares at Oakdale East in the second half.
The Building Products North America segment is performing well. Management revealed that market conditions are supportive for steady growth. In addition to this, the company advised that its acquisitions are performing in line with expectations. Both Sioux City and Redland Brick acquisitions are providing efficiency benefits.
Outlook.
Brickworks' managing director, Lindsay Partridge, appears confident on the company's outlook.
He said: "Our North American acquisitions have come at an opportune time and will provide a new and significant earnings contribution as the building industry in Australia moves through the current downturn. Another strong year is expected for Property, and Washington H. Soul Pattinson and Co. Ltd (ASX: SOL) is expected to deliver a stable and growing stream of earnings and dividends over the long term."
Brickworks isn't the only company holding its annual general meeting today. The shares of job listings giant SEEK Limited (ASX: SEK) will be on watch when it releases its own presentation later this morning.
