Brickworks flags subdued demand after Q1 revenue drop
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The news: Brickworks has warned of subdued demand persisting for the next 12 months after a drop in first quarter revenue in both the Australian and North America markets.
The numbers: The construction materials supplier said sales revenue for the quarter ended October was down 5% in Australia, although EBITDA margins were relatively stable. In North America, sales revenue slumped 12% in the period, resulting in a decline in margins.
Brickworks shares are up 3.4% to $27.50 in early trading on the ASX.
The context: Brickworks said it is undertaking temporary plant closures in North America, and attributed the weak first quarter performance to subdued building activity in both markets, which it expects to persist for the next 12 months.
However, the company remains in a position to deliver strong results when market conditions improve, following restructuring, portfolio rationalisation and plant investments, new chief executive Mark Ellenor told shareholders in remarks ahead of the company's annual general meeting.
It is forecasting significant rental growth from its property trusts over coming years, and also expects outperformance from its stake in investment house Soul Patts.
The source: ASX announcement
