Brickability reports resilient trading despite challenging market

11th Sep 2024 14:41

(Sharecast News) - Construction materials distributor Brickability Group reported resilient trading in the financial year to date on Wednesday, despite challenging market conditions.

The AIM-traded firm, which was holding its annual general meeting, said that it had performed in line with the board's expectations during the first five months of the period.

It said market demand for both UK and imported bricks had declined, primarily due to a slowdown in UK housing construction.

That had impacted the company's bricks and building materials and importing divisions, where brick-related volumes had fallen.

However, the distribution division was performing steadily, while the contracting division had shown strong performance, boosted by the recent acquisitions of specialist cladding and fire remediation businesses.

Brickability also announced that it would not provide further funding to its German tile manufacturing joint venture, as the board had decided to focus on other investment opportunities expected to generate higher returns for shareholders.

Without additional third-party funding, the factory could soon cease operations.

The joint venture owes the group around €6m, but the recoverability of that amount was described by the board as uncertain.

Any related impairment would likely be recorded as a non-cash exceptional item in the company's interim results.

Despite the challenges, the board said its outlook for adjusted EBITDA for the full year remained unchanged.

Brickability said it would issue a first-half trading update in late October.

At 1414 BST, shares in Brickability Group were down 3.28% at 63.26p.

Reporting by Josh White for Sharecast.com.