Shares of Brickworks Limited (ASX: BKW) will be in focus today after the leading building products manufacturer reported its half-year results to the market.
In the six-month period ended 31 January 2016, Brickworks reported a 3% increase in revenue to $360 million and an underlying net profit of $75 million, up 19.4% on the prior corresponding period.
The company's Building Products business, which manufactures vitrified clay, concrete and timber products, reported a 25% increase in earnings together with solid revenue growth.
Commenting on the performance of the Building Products business, Brickworks Managing Director, Lindsay Partridge, said, "Our products are becoming increasingly popular in key market segments."
"The strength of our traditional and proven product portfolio has been re-enforced in recent times by a number of costly and high profile failures of other unaccredited building products."
The company's property portfolio returned a solid earnings result of $45 million.
Mr Partridge acknowledged the recent growth in the major property markets of Sydney and Melbourne and said growth in sales from the Building Products business will be limited by external constraints. "As a result, the industry has now effectively reached capacity in these markets due to bottlenecks caused by trade and product shortages, although Brickworks substantially continues to meet all supply commitments," he said.
Pleasingly, the company's board resolved to declare an interim dividend of 16 cents per share fully franked, up from 15 cents per share last year.
Looking ahead, Mr Partridge said the business remains in good stead. "The short term outlook for Building Products is very positive. With a long pipeline of work and price rises successfully implemented in our major markets, we expect the earnings uplift recorded in the first half to be maintained over the full financial year."
