Brickability confident on housebuilding sector strength


What it does

Brickability Group PLC (LON:BRCK) is an AIM-listed company focusing around three core product areas; Bricks and Building Materials, Roofing Products and Services as well as Heating, Plumbing and Joinery.

It distributes, and in many cases installs building materials from UK and European manufacturing partners, providing product solutions to both private and commercial specifiers, contractors, developers and builders.

The group is a supplier of facing bricks, blocks, rainscreen cladding systems, architectural masonry, paving, roof tiles and slates to the construction industry.


How it is doing

In December, the firm bought McCann Limited, a logistics firm that specialises in transporting building materials from factories in Europe to construction sites in the UK.

The £1.75mln deal helps secure supply lines and reduce the risk of “Brexit-related delays to logistics and haulage” after January 1.

The deal came less than a week after the acquisition of Bathroom Barn, a supplier of radiator valves for £645,000.

In the six months to September 30, revenues slid to £75.3mln from £97.9mln, the group’s gross margin increased by 1.5 percentage points giving underlying earnings (EBITDA) of £8mln and profit before tax of £5.4mln, down just £1.1mln on the year earlier. 


What the boss says: Alan Simpson, chief executive

“Looking forward, the market for our products continues to improve and the fundamentals for the housebuilding sector continue to be strong.”

“The demand for quality building materials will remain robust and our order books reflect this.”

“The group continues to pursue its strategy of bolt-on acquisitions alongside organic growth and the pipeline for such acquisitions remains strong.”

“We are, however, exercising caution given market conditions and our criteria remain stringent.”




What the broker says

House broker Cenkos said that Brickability had traded through COVID-19 with “great resilience, giving credibility to the operating model and to management”.

“The underperformance of the stock since COVID-19 is an opportunity for investors, not a reason to fear that Brickability has gone ex-growth or become strategically impaired,” analysts said, adding the ‘fair value’ for the shares is 70p.



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