Building products and property group, Brickworks Ltd has confirmed it is expecting better than anticipated earnings for the 2015-16 financial year, thanks to buoyant building activity coupled with a higher than expected contribution from its property development arm.
“The building products group is on track to deliver a significantly improved result for the full year,” CEO Lindsay Partridge said in a trading update issued to the ASX yesterday.
He said strong east coast demand for building products means, “momentum within the building industry continues unabated.”
The company’s building products group is centred on bricks and tiles in Sydney and other parts of the east coast, as well as the Perth area.
Additionally it is looking at a stronger 2016-17 by, bringing forward some planned developments which will give earnings a further lift.
“The level of activity in western Sydney continues to drive demand at our Oakdale Estates and increase earnings from the property trust,” Mr Partridge said yesterday.
Earnings before interest and tax "from the property group in the current year is now forecast to be slightly higher than the prior year.
With the property trust arm, Brickworks highlighted additional pre-commitments at the Oakdale Central development south west of Sydney, with plans now progressing for a new warehouse development there which is to be completed early next year.
Later in 2017 it expects to generate around $90 million in income from the sale of property at Oakdale South, located nearby, the company said in the trading update.
The company’s shares rose 1% to $14.89 after being as high as $15.25. The update ended a recent slide which has seen the shares fall from a recent peak of $15.48 on May 26 to %14.62 on Wednedsay – a drop of 5.6%.
