Brickworks share price edges higher on $746 million profit result

The building products manufacturing giant has just published its earnings card for FY22.

| More on:
A man stands in a building site featuring brick walls with building equipment in the background.

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Key points

  • The Brickworks share price is up in early trade after the company released its FY22 results 
  • Brickworks saw considerable growth in its property operating segment while building material earnings grew in both Australia and the US
  • However, the company said the future holds "an increasingly uncertain outlook"

The Brickworks Limited (ASX: BKW) share price is forging into the green in morning trade amid the company reporting its full-year results for FY22.

Shares of Australia's largest building products manufacturer currently trade for $21.76 apiece, up 0.32%, after dropping as low as $21.05 shortly after market open.

Let's go over the report's highlights.

What did Brickworks report?

Brickwork's standout operating segment for the year was property. Namely, its industrial property portfolio around Sydney and Brisbane. Total earnings for the segment increased 155% yoy to $644 million.

The company stated its portfolio benefited from a "strong uplift in valuation in response to the burgeoning demand for prime logistics and warehousing space. In addition, strong development activity contributed to the Property result."

Meanwhile, Brickwork's earnings for building products also grew in Australia and the United States. This was said to be helped by the company's investment in Washington H. Soul Pattinson and Co. Ltd (ASX: SOL).

Revenue for building products in Australia grew 7% to $694 million, and EBITDA grew 110% to $205 million.

Over the same period, revenue for North American building products grew considerably more, recording a 97% gain to $399 million while EBITDA grew 84% to $48 million.

Brickwork's fully franked dividend of 41 cents per share has a record date of 2 November and an expiry date of 1 November. The expected payment date is 23 November.

What else happened in FY22?

The company's joint venture trust value surged in FY22 to $1.54 billion, up from $631 million in FY21.

As well, Brickworks launched an additional joint venture property trust with Goodman Group (ASX: GMG) comprising 15 manufacturing facilities. The total value of the trust stands at $416 million.

Brickworks also notes that despite its considerable investments over the years, its leverage remains low, with a net debt-to-equity ratio of 15%.

What did management say?

Brickworks managing director Lindsay Partridge commented on the growth of its Industrial JV trust:

A highlight for the year was the completion of the state-of-the-art Amazon distribution centre, the first facility at Oakdale West, in Sydney. This followed many years of planning and investment in site preparation and infrastructure at this Estate. With further facilities now close to completion, Oakdale West is well on the way to becoming one of the most prestigious industrial property precincts in the southern hemisphere. Other Estates at Oakdale South (Sydney) and Rochedale (Brisbane) have now been fully built out, following the completion of final developments at these precincts during the second half.

What's next?

Partridge described the future as having "an increasingly uncertain outlook". Some factors at play were stated to be rising interest rates and threats of a recession.

He also gave the following commentary on what the future could look like:

There is a significant development pipeline within the Industrial JV Trust, and the continued development of Oakdale West will drive asset growth over the coming years. The anticipated sale of the balance of Oakdale East into the Trust in FY23 will support continued growth over the medium term. We continue to explore property opportunities in North America, and have recently executed a non-binding Heads of Agreement with Goodman, to investigate the development of the Mid-Atlantic site in Pennsylvania. From FY23, Property will also include earnings generated by the Brickworks Manufacturing Trust.

Brickworks share price snapshot

The Brickworks share price is down almost 12% year to date.

Meanwhile, the S&P/ASX 200 Index (ASX: XJO) is around 11% lower over the same period.

The company's current market capitalisation is $3.28 billion.

Motley Fool contributor Matthew Farley has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has positions in and has recommended Brickworks and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia has positions in and has recommended Brickworks and Washington H. Soul Pattinson and Company Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on Earnings Results

A woman looks up at a plane flying in the sky with arms outstretched as the Flight Centre share price surges
Earnings Results

Web Travel share price rockets 13% on market leading full-year growth

Investors are sending Web Travel shares soaring today. Here’s why.

Read more »

Happy shopper at a clothes shop.
Earnings Results

Why did Myer shares just rocket 9%?

Investors are piling into Myer shares on Friday. But why?

Read more »

A woman looks up at a plane flying in the sky with arms outstretched as the Flight Centre share price surges
Earnings Results

Up 78% since April, why is the Webjet share price taking off again today?

Webjet shares have soared 78% since 4 April and are lifting off again today. But why?

Read more »

a woman holds her hands to her temples as she sits in front of a computer screen with a concerned look on her face.
Industrials Shares

Guess which ASX 200 stock is crashing 24% on results day

Investors were not impressed with this result. But why?

Read more »

A man in full American NFL playing kit crouches over with his arms across his chest in a defensive stance against a dark background.
Technology Shares

ASX 300 tech stock charges 7% higher to record high on stellar results

This tech stock delivered another impressive result this morning.

Read more »

a group of people sit around a computer in an office environment.
Earnings Results

Guess which ASX 200 tech stock is rocketing 12% on record results

Another half, another record result from this high-quality company.

Read more »

A young man sitting at an outside table uses a card to pay for his online shopping.
Consumer Staples & Discretionary Shares

Why is the Kogan share price crashing 12%?

Profits are down at this ecommerce company during the second half.

Read more »

Frustrated stock trader screaming while looking at mobile phone, symbolising a falling share price.
Resources Shares

Guess which ASX 200 mining stock is sinking 7% following its quarterly update

Let's see how this miner performed during the third quarter.

Read more »