Brickability (BRCK) defied industry trends and a downcast outlook on the UK housing market to secure a 20 per cent turnover boost in its debut half-year results. The construction materials supplier, which raised £57m in its August listing on Aim, experienced growth across its three segments: bricks, heating plumbing and joinery, and roofing.
The month of August saw the UK’s sharpest decline in new construction work since April 2009, according to IHS Markit’s activity index. Brickability chairman John Richards commented that a slowdown in London and the south-east had been reflected in the group’s dispatches of its products. Outside of this region, however, in areas including the Midlands and the north-west, dispatches “remain very, very robust”, he contended. Brickability’s geographic spread widened over the period with four acquisitions, with which it bolstered its flooring and brick distribution capabilities.
The IPO enabled Brickability to bring its net bank debt down from £19.8m at 31 March to £1.9m. Its operating cash flow, however, dropped to £2.2m against £8.8m, owing to a change in the timing of payments to major suppliers and an increase in net current assets from the four acquisitions, which together accounted for a working capital outflow of around £7.2m. Mr Richards anticipates a return to previous operating cash-flow levels.
House broker Cenkos forecasts March 2020 pre-tax profits of £17.5m and earnings per share of 6.2p, rising to £20.9m and 7.4p in FY2021.
| BRICKABILITY (BRCK) | ||||
| ORD PRICE: | 63.5p | MARKET VALUE: | £146m | |
| TOUCH: | 62-65p | 12-MONTH HIGH: | 69p | LOW: 62p |
| DIVIDEND YIELD: | nil | PE RATIO: | na | |
| NET ASSET VALUE: | 34p* | NET DEBT: | 9%** | |
| Half-year to 30 Sep | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2018† | 81.7 | 5.1 | 1761 | nil |
| 2019 | 97.9 | 6.8 | 13.3 | 0.8678 |
| % change | +20 | +33 | -99 | - |
| Ex-div: | 5 Dec | |||
| Payment: | 20 Dec | |||
| *Includes intangible assets of £75m, or 32p a share **Excludes lease liabilities of £2.9m †Pre-IPO | ||||
