Insights

Brickworks (ASX:BKW) share price jumps 8% on record property earnings

The company is having a bumper day on Wednesday, surging to new, all-time highs.
The post Brickworks (ASX:BKW) share price jumps 8% on record property earnings appeared first on The Motley Fool Australia. –

The Brickworks Limited (ASX: BKW) share price has pushed into record territory this morning after the company released a trading update for FY21.

At the time of writing, the building products company’s shares are up 8.14% to $22.73, topping their previous record high of $21.54 reached on 7 May.

What’s driving the Brickworks share price?

The Brickworks share price is on the move this morning after the company announced a $100 million revaluation profit within its Joint Venture Industrial Property Trust.

Management commented on the industrial property scene in Sydney, saying:

Since the end of the first half, there has been a number of significant industrial property transactions in western Sydney. The pricing of these transactions has reinforced the strong investor appetite for prime industrial property assets.

Given the number of sales and the steep movement in transaction pricing, an independent valuation of our Property Trust assets has been completed, and this process has resulted in further compression of capitalisation rates across our portfolio. As such, a revaluation profit of around $100 million will be recorded in the second half, representing Brickworks’ 50% share of the valuation gain.

Brickworks now expects to deliver record earnings from its property portfolio for FY21, with property earnings before interest and tax (EBIT) in the range of $240 million to $260 million, up from $129 million a year ago.

Building products segment gathering momentum

Beyond real estate, Brickworks is also a leading manufacturer of a broad range of building products. Within the trading update, the company reported that sales momentum was picking up in both Australia and North America.

Management reported that:

In Australia, the significant uptick in housing approvals is now translating to increased building activity, with our sales particularly strong in Queensland and Western Australia over recent months. That said, the availability of some materials, such as timber for house trusses, is an issue in some areas, with the resultant delays likely to flatten and extend the duration of the existing pipeline of work.

While no dollar figure guidance was provided, the company expects EBIT from building products in Australia to deliver a year-on-year increase in FY21.

The company’s North American division has been the hardest hit by the pandemic, especially in the first half of FY21. However, the update advised that building activity in the United States is now ramping up, underpinned by the country’s vaccine program.

Management believes there will be better days ahead, suggesting that “a strengthening of commercial sales is anticipated as delayed and deferred projects re-commence over the coming months”.

Despite the challenges in the first half, Brickworks expects US dollar EBIT from its North American building products division to finish FY21 with a year-on-year improvement as well.

How has the Brickworks share price been performing?

The Brickworks share price is up by around 18% year to date compared to the 11.33% increase in the S&P/ASX 200 Index (ASX: XJO).

A key catalyst that has helped prop up the company’s share price recently, alongside today’s announcement, was its half-year results delivered on 25 March. The Brickworks share price jumped by more than 5% on the day of the announcement.

The post Brickworks (ASX:BKW) share price jumps 8% on record property earnings appeared first on The Motley Fool Australia.

Wondering where you should invest $1,000 right now?

When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for more than eight years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

Scott just revealed what he believes could be the five best ASX stocks for investors to buy right now. These stocks are trading at near dirt-cheap prices and Scott thinks they could be great buys right now.

*Returns as of May 24th 2021

More reading

2 ASX shares that could keep growing the dividend every year

3 ASX shares with below-average P/E ratios

3 reasons why the Brickworks (ASX:BKW) share price is a buy

Motley Fool contributor Kerry Sun has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Brickworks. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

Trade The World Anywhere & Anytime!

Mobile app platform with over 50,000 global listed securities across 12 markets (over 70% global market capitalisation), right from your Android or iOS device.

Integrated with exclusive trading idea and investment analysis tools to help you find actionable insight on virtually every financial instrument across our 12 global markets, to help you optimise your trading strategies.

Refer Your Friends

Tell your friends about Monex and gift them FREE access to our trading tools.

We respect your privacy and will only send this one email notification to your friends. 

Share With Your Friends

Share on facebook
Share on twitter
Share on linkedin

Monex Trading Tools Access and Usage Terms

The Monex Trading Tools (referred to as ‘tools’ hereafter) are available to you inside your client portal;


To activate access to the tools, you must have a verified and approved trading account and have made a deposit of at least AUD $1000.


An active and funded account with a positive trading balance is required to continue to have access to the tools;


Although the tools are available to you indefinitely, Monex Securities may at it’s discretion disable access to the tools in the future;


Monex securities reserves the right to change these terms and conditions from time to time, as it sees fit, without notice.

Important Notice
iOS & Android App - 12 International Markets & Over 70% Global Market Cap. $0 Brokerage On US Trades. Click Here!