Building products maker Brickworks expects a better 2014 as housing construction recovers, boosting orders for materials.
Managing director Lindsay Partridge said profitability improved in the three months to the end of September, primarily because of a better performance from its Austral bricks and masonry businesses.
“We are beginning to see signs of a more broadbased recovery in building activity,” Mr Partridge told the company’s annual general meeting.
“This is reflected by increasing orders in most regions and divisions.”
Brickworks expects to deliver improved earnings in the 2014 financial year after margins in the bricks and masonry business improved as average prices in most states rose.
Mr Partridge said the group was focused on implementing internal business improvement strategies to boost margins.
“Successful implementation of these initiatives will add further impetus to building products earnings in financial year 2014.” he said.
Following a small uptick in detached housing activity in the 2013 financial year, there remained “significant further upside,” he said.
He also noted that property forecasters HIA and BIS Shrapnel were predicting a shift back to detached house construction over the next four years after a relatively flat period.
Brickworks predicts property earnings will be marginally lower next year, with continued growth in the property trust being offset by a reduced contribution from land sales.
Investment earnings are expected to continue to perform well over the long term.
Brickworks made a profit of $85 million in the 2012/13 financial year.
By Kim Christian