Brickability has shrugged off a slowing housing market driven by rising interest rates and economic uncertainty to post strong annual profit growth.
The construction materials supplier revealed pre-tax profits climbed by 87.5 per cent to £34.5million for the year ending March amid strong performances across all four main business divisions.
Its revenue increased by 30.9 per cent to £681.1million, mainly due to contributions from recent takeovers and the firm’s bricks and building materials arm.
Good result: Brickability revealed pre-tax profits climbed by 87.5 per cent to £34.5million for the year ending March amid impressive performances across all four main business divisions
Brickability said the segment managed supply problems from British and European manufacturers and falling demand for bricks during the second half of the period.
Having experienced a significant boom as Covid-related restrictions were loosened, the housebuilding industry has gradually weakened over the last 18 months due to soaring mortgage rates and consumer pressure.
Companies including Barratt Developments, MJ Gleeson, and Bellway have all reported sliding sales, particularly among first-time buyers.
While Brickability acknowledged the troubles impacting the construction sector, outgoing chief executive Alan Simpson said ‘the underlying long-term demand for UK housing remains robust as does the demand for quality materials for the construction sector generally’.
He added: ‘The [Brickability] board remains confident that the group is well placed to continue delivering on its strategic objectives and the underlying organic growth of the business.’
Simpson is standing down after seven years as chief executive and more than three decades working at the building materials distributor.
He initially became one of the company’s directors in 1996 before ascending to the CEO role in 2016 following the management buyout of Brickability’s founder Peter Milton.
During his tenure, Simpson oversaw the firm’s listing on the junior AIM market, the move of its headquarters from Bridgend in Wales to Bracknell, and spearheaded a strategy to widen the firm’s revenue streams through acquisitions.
In May 2018, the group entered the roofing sector by purchasing Crest Brick Slate & Tile and Crest Roofing and introduced heating, plumbing, joinery and specialist windows and doors to its offering.
And in the last fiscal year, it acquired three more businesses: E.T. Clay, Heritage Clay Tile and Modular Clay Products, with the latter intended to boost its reach in the specification industry.
Simpson’s replacement as CEO is Frank Hanna, the current joint boss of Michelmersh Brick Holdings, a clay product specialist manufacturing over 125 million clay bricks and pavers each year.
Brickability Group shares were 4.2 per cent higher at 57.5p on early Monday morning, although they have contracted by around a quarter in the past 12 months.
This post first appeared on Dailymail.co.uk
