Brickworks (ASX:BKW) FY24 financial results overview

Brickworks Limited (ASX:BKW) has reported a Statutory Net Loss After Tax of $119 million for the year ended 31 July 2024. The Underlying Profit After Tax from continuing operations was $61 million. The company's final dividend has increased for the 11th consecutive year, reaching 43 cents per share. Market value of listed investments rose by $263 million to $3.383 billion, while the net asset value of Property Trust assets decreased by $267 million to $2.007 billion. Building Products EBITDA in both Australia and North America saw an increase, but the overall earnings were adversely impacted by non-cash property devaluation and Building Products impairment.

Executive commentary on FY24 performance and outlook

We are now moving through a cyclical low in building activity, with residential approvals in Australia at the lowest level for more than a decade. In response, we have implemented a range of re-structuring initiatives, to remove costs and support margins. During the second half of the year, the commissioning process at Plant 2 in New South Wales was substantially completed. This represents a significant milestone for the Company, following five years of hard work, with the project having commenced in 2019. The plant is now operating at design capacity and will surpass any other brick factory in Australia in terms of automation, fuel efficiency, and output. The North American business has delivered a resilient result, considering the relatively weak conditions across the Midwest and Northeast regions in our core non-residential and multi-residential markets. Margins continue to improve on the back of price increases and improved factory utilization, following the completion of our five-year plant rationalization program. However, the slowdown in building activity has delayed the full benefit of the efficiency improvements we expect to deliver from this program.

FY24 results summary and outlook

Brickworks' FY24 results reflect a challenging year, with the company posting a statutory loss due to non-cash property devaluation and Building Products impairment. Despite this, the final dividend has been increased for the 11th consecutive year. The market value of listed investments rose, but the net asset value of Property Trust assets decreased. The company's outlook includes expectations of significant growth in rental income from the Property Trusts, challenges in the Building Products businesses in Australia and North America, and the expectation of Soul Patts to continue delivering stable and growing earnings and dividends over the long term. Brickworks aims to maximize cash generation in the short term and is well placed to meet future opportunities and challenges with its diversified portfolio of high-quality assets.