(Alliance News) - Brickability Group PLC on Tuesday said it expects this year's earnings to hit the lower end of market guidance, thanks to "continuing challenging market conditions".
Shares in Brickability were down 12% at 67.32 pence on Tuesday morning in London.
The Bridgend, Wales-based construction materials distributor said that throughout the year to March 31, both its Distribution and Contracting divisions have performed well despite "a challenging trading backdrop".
The challenges include slower private housebuilding and residential repairs, maintenance & improvements markets, as well as "significantly lower" market volumes for bricks and a 42% drop in imports in calendar 2023 compared with 2022.
"FY24 Group sales volumes in the Bricks and Importing Divisions reflect these market trends, with FY24 revenues year-to-date at lower levels than in the prior year," Brickability explained.
Because of the lower demand for bricks and other building products, which "are likely to persist through to the end of [FY24]", Brickability now expects full-year adjusted earnings before interest, tax, depreciation and amortisation "to be towards the lower end of current market expectations".
Brickability said the latest analyst consensus predicts adjusted Ebitda of between GBP44.8 million and GBP47.2 million, with the market expecting it to reach GBP46.2 million before Tuesday's trading update.
The company expects trading conditions to "remain challenging for longer than initially anticipated", and therefore "now considers it appropriate to assume a more conservative profile for the group's recovery over the next twelve months".
Nonetheless, Chief Executive Officer Alan Simpson said he was "extremely pleased" with Brickability's performance, "given the continuing challenging market conditions outside of our control".
He continued: "We continue to make further progress on our strategy, which includes diversifying the group through differentiated product offerings and acquiring higher margin revenue streams, the benefits of which we are already seeing...We have maintained a disciplined approach to cost and cash management during this period, and I am confident the group is extremely well positioned across each of its divisions to benefit when activity in its end markets recover."
By Emma Curzon, Alliance News reporter
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Brickability Group (BRCK)