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Brickability in strong position as booming demand puts squeeze on brick supplies

Brickability PLC (LON:BRCK) can use its strong position to ride out on the current squeeze on raw materials, chairman John Richards told a Proactive /Cenkos online forum today.

“We have bigger allocations from GB brick makers than anybody else. We have access to more European bricks and roof tiles, and towel radiators and doors and windows,” Richards said.

“So, we’re in a very, very strong position and with our own transportation business from Europe not only can we source it we can get it here and a lot of our competitors will be struggling to do that.”

Cenkos Growth & Innovation Forum 8 June 2021 | Online

The company is the UK’s second-largest importer of bricks behind Austrian giant Wienerberger.

And things are tight at present with demand soaring and supply squeezes pushing up prices of materials across the construction spectrum.

A shift in fashion towards detached houses is also affecting the availability of bricks, roof tiles and other building materials said Richards.

In the first quarter of 2021, 32% of new housing starts were detached houses compared to 17% in 2010.

That’s important for building materials, he said, because a detached house uses broadly three times more bricks or roof tiles or windows or doors.

Demand is also strong with housing starts recovering rapidly towards the 200,000 seen in 2019, which is piling pressure on supplies of raw materials already affected by the impact of Covid-19.  

Stocks at British brick manufacturers at the end of last year were at an all-time low of 300mln, said Richards.

That equates to seven weeks of stock if demand is balanced, but it’s not he said and many brick products in the UK are currently at zero stock levels.

That means there isn’t 16, 20 or even 24 weeks availability with the problem in roofing tiles even worse.

UK brick usage this year is forecast at about 2.34bn of which 1.9mln will be made here, but this is absolutely flat-out capacity, says Richards.

The other 440mln will have to be imported, he says, which is ideal for a supplier such as Brickability.

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