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Housing market lows hit Brickworks
Housing market lows hit Brickworks

Brick and tile maker Brickworks has posted a 70 per cent drop in full year profit and is cautious about the pace of any recovery in the housing market.

Brickworks made a net profit of $43.3 million in the year to July 31, down from $142.6 million in the previous year.

Plant closures and restructuring resulted in $35.6 million worth of one-off charges in the year.

The company said its normalised profit, which excludes one-off items, was $78.9 million, down 22 per cent from $100.8 million in the previous year.

Managing director Lindsay Partridge said it was a difficult year because of near 30-year lows in the residential construction industry.

But he said earnings from the company's building products operations in the second half of the year were in line with the first half, as the results of restructuring efforts took effect.

"Barring any unforeseen external shocks, the latest forward indicators of housing activity indicate that we may be close to the bottom of the residential building cycle," Mr Partridge said in a statement.

"The recovery in building activity is likely to be patchy over the next 12 months with weak full-time employment growth, low confidence and poor affordability eliminating any impact from lower interest rates to date.

"Furthermore, varying state government policies are expected to drive diverging outcomes across the major states."

Brickworks declared a final fully franked dividend of 27 cents per share.

Brickworks operates across the nation with its Austral Bricks, Masonry and Precast brands and Bristile Roofing.

Its Auswest Timbers company manufactures products for the building industry at its Pemberton facility.

Meanwhile, Washington H Soul Pattinson, which owns 44.5 per cent of Brickworks, reported a 60 per cent fall in its profit in the year to July 31 to $143 million.

Most of the profit fall was due to a $197 million gain on the sale of Arrow Energy shares by coal miner New Hope Corporation in the previous year.

Washington H Soul Pattinson holds a 60 per cent stake in New Hope, as well as a controlling interest in copper sulphide producer CopperChem and advisory firm Pitt Capital Partners.