Brickworks Limited Surges on Full-Year Results

Highlights:

• Revenue and Profit Decline: Brickworks Limited (ASX: BKW) reported an 8% decrease in total revenue to $1,089 million, with underlying EBITDA down 80% to $157 million, primarily due to negative property revaluations.
• Dividend Growth: Despite financial challenges, the company increased its fully franked full-year dividend by 3% to 67 cents per share, reflecting resilience in shareholder returns.
• Positive Market Reaction: Brickworks shares surged 7% at the time of writing, driven by the company’s ability to outperform revenue expectations and maintain dividend growth amidst a challenging year.

Building Products Giant Posts Strong Dividend Growth Despite Challenging Year

At the time of writing, shares of Brickworks Limited (ASX: BKW) are up 7%, trading at $28.47 following the release of its full-year results. Despite facing several challenges, including revenue and profit declines, the company’s strong dividend performance has helped drive the stock higher.

Key Financial Highlights for FY24

For the fiscal year ending 31 July, Brickworks reported total revenue of $1,089 million, representing an 8% decline compared to the previous year. The company's underlying EBITDA plummeted by 80% to $157 million, largely due to negative property revaluations and sales. Additionally, Brickworks' underlying net profit after tax fell by 88% to $61 million, while the statutory loss after tax amounted to $119 million. The statutory loss was largely driven by a non-cash impairment of $135 million linked to Austral Masonry and Brickworks North America.

Despite these financial setbacks, Brickworks managed to raise its fully franked full-year dividend by 3% to 67 cents per share. This included a 2% increase in the final dividend, bringing it to 43 cents per share.

Management’s Outlook and Commentary

Mark Ellenor, CEO of Brickworks, acknowledged the difficult year but remained optimistic about the future. He highlighted that significant rental income growth is expected from the company’s property trusts in the coming years, driven by demand for prime industrial facilities in the e-commerce and digital sectors.

While Building Products divisions in both Australia and North America face subdued market conditions, the company plans to navigate this through temporary plant closures and inventory control during FY25. Ellenor emphasized that once market conditions improve, Brickworks is well-positioned to deliver strong returns due to its recent plant investments and restructuring initiatives.

Market Response

The market has responded positively to the results, with investors encouraged by the company's ability to maintain dividend growth. Brickworks’ stock surge reflects optimism around its long-term prospects, especially within its property segment.

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