Brickability defies housing industry gloom with surging annual profits
Brickability defies the gloom of the housing sector as the building materials supplier reveals huge profits
- The building materials supplier revealed that its pre-tax profit was up 87.5%
- Alan Simpson steps down as CEO of Brickability after seven years
- Rising mortgage rates have severely damaged the UK housing sector
Brickability has shrugged off a slowing housing market driven by rising interest rates and economic uncertainty to deliver strong annual earnings growth.
The building materials supplier revealed that pre-tax profit was up 87.5 per cent to £34.5m for the year ended March, amid strong performances across all four major business divisions.
Sales rose 30.9 per cent to £681.1 million, mainly due to contributions from recent acquisitions and the company’s bricks and building materials division.
Good result: Brickability revealed pre-tax profit rose 87.5 per cent to £34.5m for the year ended March amid impressive performance across all four major business divisions
Brickability said the segment had contained supply problems from UK and European manufacturers and declining demand for bricks in the second half of the period.
After experiencing a significant boom as Covid-related restrictions were eased, the housing sector has gradually weakened over the past 18 months due to rising mortgage rates and consumer pressure.
Companies including Barratt Developments, MJ Gleeson and Bellway have all reported falling sales, particularly among first-time buyers.
While Brickability acknowledged the problems in the construction industry, outgoing CEO Alan Simpson said ‘underlying long-term demand for UK housing remains robust, as does demand for quality materials for the construction industry in general’.
He added, “The [Brickability] the board of directors remains convinced that the group is well placed to continue to realize its strategic objectives and the underlying organic growth of the company.’
Simpson retires after seven years as CEO and more than three decades at the building materials distributor.
He initially became one of the company’s directors in 1996 before rising to the role of CEO in 2016 following the management buyout of Peter Milton, the founder of Brickability.
During his tenure, Simpson oversaw the company’s listing in the junior AIM market, the move of its Bridgend Welsh headquarters to Bracknell, and spearheaded a strategy to broaden the company’s revenue streams through of acquisitions.
In May 2018, the group entered the roofing sector through the acquisition of Crest Brick Slate & Tile and Crest Roofing and introduced heating, plumbing, joinery and specialist windows and doors to its offering.
And in the past fiscal year, it acquired three more companies: ET Clay, Heritage Clay Tile, and Modular Clay Products, the latter of which aims to expand its reach in the specification industry.
Simpson’s replacement as CEO is Frank Hanna, the current joint boss of Michelmersh Brick Holdings, a clay products specialist that produces more than 125 million bricks and pavers annually.
Brickability Group Shares were 4.2 percent higher at 57.5 pence early Monday morning, though they’ve shrunk by about a quarter over the past 12 months.