- Firm sees operating profits topping forecasts
- Shares surge to their highest since October
- Housebuilders slump on negative research note
Shares in construction materials distributor Brickability Group (BRCK:AIM) jumped more than 9% to a three-month high of 75p after the firm revealed profits for the year to March would beat market expectations.
The move came against falls in the shares of the housebuilders following a raft of downgrades by analysts at Deutsche Bank.
RESILIENT TRADING
Brickability is one of the UK’s leading suppliers of facing bricks, blocks, rainwater systems, roofing tiles and slates to the construction industry.
Its products are used in everything from small-scale domestic extensions to major commercial and residential projects such as the new Goodluck Hope development on the Thames opposite the O2 Arena.
Thanks to its diverse customer base, the group reported strong trading through the third quarter and fourth quarter to date and now expects EBITDA (earnings before interest, taxes, depreciation and amortization) for the year to the end of March of at least £47 million.
According to the latest forecasts, analysts were expecting EBITDA to fall within a tight range from £44.5 million and £44.9 million.
‘Whilst mindful of the short-term impacts on our sectors that a challenging macro-economic environment could bring, the board remains confident that the group is well placed to continue delivering on its strategic objectives and the underlying growth of the business’, the firm said.
HOUSEBUILDERS SUBSIDE
While Brickability Group shares surged, housebuilding stocks were lower across the board after analysts at Deutsche Bank lowered their recommendations on the four biggest players arguing the rebound in the sector from its October lows was premature.
Persimmon (PSN) was the worst performer in the FTSE 100 losing 2.7% to £14.50, followed closely by Taylor Wimpey (TW.) down 2.2% to 119p and Barratt Developments (BDEV) down 1.7% to 465p.
Rising mortgage rates and falling consumer confidence have led to a sharp drop in reservations across the sector and a reduction in planned completions by most developers.
