BKW - Brickworks Limited

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My last scan of the year suggested BKW might make another bounce:

[scan] suggests Long: [condition 1] OK 5 days ago. MACD Speed x zero on the last day.

Assuming it isn't just window dressing, if I saw this setup on any other day, I'd expect an entry around this price to have a good chance of leading to a profitable trade.



Looking back over the longer-term "Investment"-style chart (weekly), the same setup was indicated in late September (confirming the earlier sequence of signals on the above Daily, which I missed because I'd taken some time off.)



However, the current setup indicates support at a "strong" rebound level after a regulation retracement; even if I held a long position from September, I'd now consider topping up.

 

[thydzik]

At $2B market cap, why doesn't it make the S&P 200? low volumes?

 

[So_Cynical]

At $2B market cap, why doesn't it make the S&P 200? low volumes?

SOL Washington Soul Pattinson - Market cap 3.2 Billion, not even in the ASX300, low liquidity...also the major share holder of BKW.

 

[thydzik]

SOL Washington Soul Pattinson - Market cap 3.2 Billion, not even in the ASX300, low liquidity...also the major share holder of BKW.

I would imagine SOL possibly being excluded from the S&P due to being a managed fund.

 

[skyQuake]

SOL has crappy liquidity and even worse free float.

BKW on the other hand... Just wait 3 more days

 

[rnr]

I do not hold.

Over 4 years since the last post!

BKW closed the day @ $18.80 just 10¢ shy of the HHV(Close,30) and 53¢ below the ATH of $19.33.

 

[Trav.]

I was shuffling some positions around today and decided to enter BKW even though I am probably 4 bars late.

But with ATH's being achieved and market sentiment bullish I thought that I will try to hitch a ride.

I am currently just in the green so will be watching closely

 

[Dona Ferentes]

SOL Washington Soul Pattinson - Market cap 3.2 Billion, not even in the ASX300, low liquidity...also the major share holder of BKW.

I would imagine SOL possibly being excluded from the S&P due to being a managed fund.

The free float is low, because of the crossholding between SOL and BKW. And all that really means is there's no takeover or break-up premium. Perpetual tried, and failed.

 

[Trav.]

good example of why you should not chase a trade here.

I was entering late due to availability of funds and now BKW has retraced back to the original entry signal. BKW fell 2.9% on Tuesday and has not recovered

Down 3.3% at the moment but happy to hold for a bit longer to see if it turns around.

 

[barney]

Down 3.3% at the moment but happy to hold for a bit longer to see if it turns around.

It has recovered a fair bit of that retrace and is looking back on track … did you hang on?

 

[Trav.]

Exited today for a 2% loss as I had lost confidence in the trade and in hindsight should not have chased it.

Still on the watch list and should go gang busters on Monday now that I am out

 

[barney]

Exited today for a 2% loss as I had lost confidence in the trade and in hindsight should not have chased it.

Still on the watch list and should go gang busters on Monday now that I am out

Murphies law of course ..... At least you recouped a bit from the last few days price action which is way better than closing out at the swing lows only to see it reverse.

 

[Dona Ferentes]

@finicky put this in the COL thread, and its worthy to be posted here. I read that BKW is one third brickmaking, one third the SOL holding and one third property management/ development

"After they've used their fringe urban land or when it otherwise becomes surplus they sometimes hive it off into residential blocks but otherwise the land is rezoned industrial and developed through a joint venture Industrial Property Trust that is a 50/50% partnership between Brickworks and Goodman Industrial Trust. After including debt, Brickworks 50% share of the Property Trust has an equity value of $633 million.

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 the U.S."

In this AFR article from Mar 2019, Brickworks CEO, Lindsay Partridge was interviewed:

" ... Partridge has been able to tap into an industrial property shift from manufacturing to distribution, where factories are out and warehouses are in. As the internet changes commerce, demand for warehouses is soaring and changing.

An example of these changes is provided by Coles’ new state-of-the-art automated warehouses, one of which will be housed within the 89-hectare Oakdale Industrial Estate in Horsley Park, which was sold into the Brickworks Goodman Joint Venture Industrial Trust in 2016. Notably, the facility is 10 storeys high, which Partridge says neatly illustrates how the requirements of warehouse owners are changing. This trend should be very good for Brickworks.

“We are going to get a lot more distribution capacity per square metre of land,” he says, adding the company’s existing warehouse holdings may well end up being redeveloped over time.

Could Partridge ever imagine shuttering the group’s remaining Australian brick-making plans and telling his board he can make more money in property development?

Partridge says he occasionally makes this joke to his factory managers, but he hopes the day never comes. “That’s a horrifying thought. I’ve been making bricks all my life.”"

 

[divs4ever]

Record Property earnings expected in 1H2022
• Brickworks purchases 121 hectares of land at Bringelly, in South West Sydney Record Property earnings expected in 1H2022 Brickworks expects to report record Property earnings in the first half of financial year 2022, with Property EBIT, in the absence of any further transactions, in the range $290-310 million.
This compares to Property EBIT of $253 million in financial year 2021. Brickworks Managing Director, Mr. Lindsay Partridge said: “We have seen strong demand and sustained growth in the value of our Property Trust over a number of years.
The COVID-19 pandemic has only fuelled this growth, by accelerating industry trends towards online shopping and increasing the importance of well-located distribution hubs and sophisticated supply chain solutions.” “These trends are reflected in our independent revaluation process, that has recently been undertaken. This process has resulted in, on average, capitalisation rate compression of 50 basis points to 3.6%, across the leased assets within the Property Trust.” “In order to meet the strong customer demand, development activity within the Property Trust has also continued at pace.
At Oakdale West, construction of the state-of-the-art Amazon facility is due to reach practical completion at the end of December. The completion of this facility, together with others at Oakdale South, will result in significant development profits, also included in the record first half earnings.” “In the second half of the financial year, we expect to complete additional developments at the Oakdale Estates in western Sydney and the Rochedale estate in Brisbane,” Mr. Partridge said.
More detail will be provided at Brickworks’ half year results announcement, on Thursday 24 March. Brickworks purchases 121 hectares of land at Bringelly, in South West Sydney Brickworks is also pleased to announce that it has executed an unconditional contract for the purchase of 121 hectares of land at Bringelly, in South West Sydney. Mr. Partridge said: “Subject to approvals, this vast land asset will be used as a clay resource to support Austral Bricks operations in Sydney, effectively replacing the existing clay resource at Oakdale East.” “Given the strong industrial property demand and increasing value of our land at Oakdale, our Austral Bricks plants in western Sydney are currently undergoing a major renewal and rationalisation program. This is highlighted by our new face brick plant at Horsley Park, currently under construction. The completion of this plant in around 12 months’ time, will allow brick operations to be consolidated at the Horsley Park Plant 1 and 2 site, and the remaining 75 hectares of land to be released at Oakdale East, where Plant 3 is located.” “The land released at Oakdale East will then be sold into the Property Trust, resulting in a significant one-off land sale profit and extending the development pipeline in order to meet the unprecedented demand for industrial development.”
“The purchase of the land at Bringelly will ensure that our brick operations are not adversely impacted by the release of land for property development.”

ASX: BKW | ABN 17 000 028 526 738-780 Wallgrove Road, Horsley Park, NSW 2175 | info@brickworks.com.au | www.brickworks.com.au Page 2

“From a longer-term perspective, the acquisition replenishes our land bank, and given its strategic location in close proximity to the western Sydney International Airport, has future development potential once operational needs are exhausted.”
“Brickworks’ has a long-standing and successful business model that supports the purchase of land assets on the suburban fringe, used for many decades in our brick making operations. History shows, that as urban development expands, this land has the potential to increase in value through rezoning, thus facilitating transfer to the Property division for development.” Settlement of the Bringelly purchase is expected to occur in March.

DYOR

i hold BKW ( bought in August 2012 @ $10 )

 

[Dona Ferentes]

Brickworks has launched a $416 million property trust with real estate fund manager Goodman Group. Brickworks will maintain 50.1 per cent ownership of the trust, with Goodman Group holding the remainder.

The Brickworks Manufacturing Trust will launch with a portfolio of 15 manufacturing plants tenanted by Brickworks’ businesses, including Austral Bricks, Bristile Roofing and Austral Masonry.

Brickworks said that it anticipates property earnings before interest and tax to exceed $620 million for the 2022 financial year, compared to $253 million in the prior year.

 

[Dona Ferentes]

Building on solid foundations

• Record statutory net profit after tax (NPAT) of $854 million for the year ended July 31, up 257% on the prior year.
• Excluding significant items and discontinued operations, the underlying NPAT from continuing operations was a record $746 million, up 159%.
• Underlying earnings before interest, tax and depreciation (EBITDA) from continuing operations was $1.05 billion, up 133% on the prior year, and after depreciation, EBIT was $982 million, up 154%.
• A fully franked final dividend of 41¢ per share, an increase of 1¢ on the prior year, has been declared. This brings the full year dividend to 63¢ per share, up 2¢.

 

[Dona Ferentes]

“Across Building Products [Division], we are confident that sales will remain resilient in the second half. However, there is no doubt that a slowdown in activity will arrive before the end of the calendar year, once the existing pipeline of work is built out”
- Lindsay Partridge, CEO, Brickworks Ltd

 

[divs4ever]

“Across Building Products [Division], we are confident that sales will remain resilient in the second half. However, there is no doubt that a slowdown in activity will arrive before the end of the calendar year, once the existing pipeline of work is built out”
- Lindsay Partridge, CEO, Brickworks Ltd

am a little stunned the total market didn't react to that paragraph .

but maybe traders completely dominate the current market

 

[Dona Ferentes]

am a little stunned the total market didn't react to that paragraph

... Maybe it could go in the thread
"The State of the Economy at Street Level - 6 to 12 Months Out"

 

[divs4ever]

well holding BKW and some 'rivals ' ( ABC , CSR , WGN and SVW ) that admission didn't bring a smile to my face

i would imagine the civil engineering and REITs would not be happy to read that either

i was hoping civil infrastructure spending would replace mining investment in the coming years