BRICKWORKS SEES STRONG HOME BUILDING AHEAD AS PROFIT SLUMPS

Brickworks managing director Lindsay Partridge said the east coast home building boom shows no sign of slowing down as he slammed the rostered workers day off for hurting the construction industry’s competitiveness. Mr Partridge brushed off calls that home building in Australia has peaked, saying that while Western Australia is declining and Victoria will peak soon, Queensland and NSW will continue to lift. He said home builders in the major markets of Sydney and Melbourne had work in hand extending up to a year, and Brickworks is scrambling to supply the hot construction sector. “I do break into a cold sweat sometimes wondering how we can meet demand with some of the orders coming through,” he said. In March the nation’s biggest brick maker began restarting mothballed brick factories with stock on hand falling to just eight days at some plants. Brickworks made 675 million bricks in the year to July 31. Mr Partridge said the company has capacity to produce another 50 million to 100 million bricks.


Residential home building hit a record in 2014-15, with construction started on 214,700 new homes, up from 181,000 the previous year. In August Boral chief executive Mike Kane said “the Australian housing market is at an all-time peak and therefore there’s only one direction realistically for that market to go”. But Mr Partridge disagrees. He said demand was still robust and pointed out that at The Gables residential development at Box Hill in Sydney’s west, there were more than 4000 registered interested buyers for 120 lots. There were still about 100,000 families waiting to buy somewhere to live, Mr Partridge said. “There is a massive number of people who would love to buy a house.


For every block of land that comes for sale there’s at least 10 people in line to buy it … the demand is a long way from being satisfied.” “Every other housing upturn has come to an end because of a credit squeeze and I don’t think anyone anticipates a credit squeeze, so it can go on until we build out the demand.” He also attacked the rostered-day-off system, under which workers accrue a day off for working extra hours beyond their stated work week. “The No. 1 thing for productivity that needs to be reviewed is the rostered-day-off concept,” Mr Partridge said. “We had a situation last month where there was a public holiday and four RDOs, so one week in a month was lost to construction. How can anybody make a living in a business that works three weeks in a month?”. His comments come as Brickworks reported a 24 per cent slump in full-year profit to $78.1 million. Excluding $49.5 million of impairments, Brickworks said its underlying profit for the 2014-15 year rose 18.8 per cent to $120.3 million. Earnings in the building products business rose 25 per cent to $56.4 million, and land and development earnings rose 3.1 per cent to $64.4 million. Investment earnings – which come from Brickworks’ 42.72 per cent stake in listed investment group Washington H. Soul Pattinson – rose 22.9 per cent to $54.8 million. Brickworks shares shed 13¢ to $15.24 on Thursday, giving the group a market value of $2.26 billion.

Uncategorised | 25.09.2015
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