Brickworks (ASX: BKW) has come out swinging with a solid half-year result, reporting a statutory net profit after tax (NPAT) of $21 million, a 141% increase on the prior year. More impressively, underlying NPAT surged 308% to $76 million, showing strong momentum despite market challenges.
And for the 11th consecutive year, Brickworks has rewarded shareholders with a dividend hike—bumping it up to 25 cents per share (fully franked).
Earnings Snapshot
- Total revenue: $516 million (down 6%)
- Underlying EBITDA: $148 million (vs. a $40 million loss last year)
- Market value of listed investments: $3.26 billion as of Jan 31, 2025
- Property EBITDA: $38 million (up 121%)
The standout turnaround was in property, bouncing back from last year’s valuation losses, while investments continued to provide stability.
Building Products: Mixed Fortunes in Australia and the U.S.
In Australia, EBITDA was down 4% to $50 million, as softer volumes in Victoria and NSW offset price increases and cost efficiencies. CEO Mark Ellenor acknowledged the challenges but pointed to operational improvements and product innovation, including thin brick cladding for high-rise buildings, as key areas of focus.
North America, however, was a different story. A 13% drop in sales revenue led to an EBITDA loss of $3 million, with market softness, project delays, and supply disruptions biting hard. Ellenor remains confident that the recent plant rationalisation program will set the business up for stronger earnings when market conditions improve.
Property Powerhouse: Strong Rental Growth and New Developments
Property was a clear winner, with EBITDA surging 121% to $38 million. Even stripping out last year’s revaluations, the underlying figure dipped 32%, reflecting a shift from development profits to rental income. The Oakdale West Estate reached completion, while construction at Oakdale East is now underway, including a 57,400m² Amazon facility set to deliver profits in the next financial year.
Investments: A Reliable Safety Net
Brickworks’ 25.65% stake in Soul Pattinson (ASX: SOL) continues to be a major earnings driver, with dividends received up 8% to $52 million. While the market value of its listed investments fell 4% to $3.26 billion, it remains a key pillar of financial strength.
Outlook: Optimism with a Side of Caution
While building materials demand is expected to remain subdued in 2025, the long-term outlook is bright, with residential construction poised for a rebound from 2026. Ellenor sees government action on housing approvals as crucial to unlocking growth.
In North America, mortgage rates and affordability remain headwinds, but a forecast uptick in building activity from 2026 should provide relief. Meanwhile, Brickworks’ industrial property assets are in high demand, and its Soul Pattinson stake remains a rock-solid earnings contributor.
Final Take: Solid Execution in Tough Conditions
Brickworks is proving its resilience with strong earnings growth, an 11th straight dividend increase, and a clear strategy for navigating industry headwinds. With a stable investment portfolio, a booming property arm, and a streamlined North American division, it’s well-positioned for the next phase of growth.
