Brickworks Limited (ASX:BKW)

Lindsay Partridge AM
MD
Market Cap (AUD): 3.8B
Sector: Materials
Last Trade (AUD): 25.76 +0 (+0%)
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1. About

Brickworks Limited (ASX:BKW) is a group of companies with a long, successful, and proud history that specialises in property, investments and the manufacture and distribution of building products for the residential and commercial markets.

There are four divisions within the Brickworks Group structure: 

Building Products Australia

Our Building Products division is one of Australia’s largest, best known and most diverse building material manufacturers. Our products include clay bricks and pavers, concrete masonry blocks, retaining wall systems, stone, precast concrete panels, concrete, terracotta and solar roof tiles, terracotta façades and lightweight building systems.

Building Products North America

In late 2018, Brickworks announced it’s first US based acquisition of Glen-Gery, the fourth largest brick manufacturer in the USA. Since this time the North America business has continued to grow through further acquisitions and is now established as the leading brickmaker in the key North eastern region, with a reputation for premium products and high exposure to the architectural market.

With a broad product portfolio and manufacturing and sales facilities across Australia & North America, Brickworks is uniquely placed to service the demands of the building industry.

Property

The Property division was established to maximise the value of land that is surplus to the Building Products business. Operational land that becomes surplus to the business needs is transferred to the Property division where it is assessed for optimum land use.

In some cases, land is rezoned to residential and sold. Alternatively, the land is rezoned industrial and transferred into the Property Trust and developed, creating a stable, growing annuity style income stream.

The Joint Venture Industrial Property Trust is a 50/50% partnership between Brickworks and Goodman Industrial Trust. Over the past decade it has grown significantly and now has a total asset value of over $1.7 billion. 

In addition to the Property Trust, the Company holds around 3,750 hectares of operational land and 370 hectares of development land. The company also holds 2,400 hectares of land in North America.

Investments

Investments consists primarily of a 39.4% interest in Washington H. Soul Pattinson (ASX:SOL).

This shareholding in SOL is an important source of earnings and cashflow diversification for the company and has been a key contributor to Brickworks’ success for more than four decades.

SOL holds a significant investment portfolio in a number of listed and unlisted companies including Brickworks, TPG Telecom, New Hope Corporation, Australian Pharmaceutical Industries, Apex Healthcare Berhad and TPI Enterprises.

Over more than four decades, WHSP has delivered an uninterrupted dividend stream that reflects the earnings from SOL’s diversified investments. This dividend helps to balance the cyclical earnings from Brickworks’ Building Products and Property divisions.

2. Business model

3. Strategy

4. Markets

5. Competition

6. History

7. Team

8. Financials

9. Risk