Brickability shares surged after the construction materials group said full-year profits would come in higher than expected, despite a slowdown in the housing market.
The company, which supplies all types of bricks, roofing products and rainscreen cladding, told investors that the strong performance reported in October had continued into the second half across all its divisions.
It now expects to report adjusted underlying profit of at least £47million for the financial year ending on 31 March, ahead of current market expectations of £44.7million.
Brickability, which supplies all sort of bricks to housebuilders, expects profit to beat forecasts
The company, which has its headquarters in Bridgend, Wales, said it had managed to ‘succesfully navigate’ the challenges and uncertainty affecting the UK housebuilding market.
Last week, housebuilders Bellway and Redrow flagged persistent market challenges, despite a slight pick-up in activity in recent weeks.
The groups said that higher mortgage costs, rising interest rates and broader inflationary pressures had caused caution among buyers.
But Brickability remained upbeat as it told investors in a short trading update: ‘Whilst mindful of the short term impacts on our sectors that a challenging macro-economic environment could bring, the board remains confident that the group is well placed to continue delivering on its strategic objectives and the underlying growth of the business.’
AIM-listed Brickability shares surged 8.4 per cent to 74.50p in morning trading on Monday.
They have risen 13 per cent since the start of 2023, but remain down by a about a quarter compared to a year ago.
Andy Murphy, director at Edison Group, said: ‘Brickability trades on a PER 9x for FY 23 as the share price has fallen nearly 40 per cent from its peak in 2021, suggesting a lot of bad news is already discounted in the price.’
The company, which has been selling its products across the UK and Europe for over 37 years, says it supplies over 550million bricks annually.
It has more than 55 shops across the UK, employing around 600 people.
It expects to publish its full-year results in late April.
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