Brickworks expects FY22 earnings to double, launches property venture with Goodman

More than 100% property earnings growth in FY22 and a new manufacturing property trust with Goodman (ASX: GMG) has failed to inspire Brickworks (ASX: BKW) shares, up just 1.4% in early trade.

Investors are selling into the positive news, with the company's shares fading from a brief 4.3% rally when the market opened.

Brickworks intraday price chart (Source: TradingView)

Launch of $416m Trust

Brickworks on Friday announced the launch of the 'Brickworks Manufacturing Trust".

The trust will be 50.1% owned by Brickworks, with the remaining 49.9% sold to Goodman. The sale will net Brickworks $193m after tax and transaction costs, with the proceeds used to pay down debt.

Property earnings boom

Brickworks expects its property division to deliver record earnings "in excess of $620m" in FY22 compared to $253m a year ago.

“During the second half of the financial year, we have made strong progress on a number of major developments within the Industrial JV Trust. At Oakdale West, new facilities for Coles, Woolworths, Australia Post and Telstra are all approaching practical completion," commented Managing Director Lindsay Partridge.

FY22 earnings likely to double

The $620m earnings expected from the property division alone will near double the Groups FY21 earnings of $383m.

In addition, management said they expect 20% growth from the Australian Building Products business (FY21 earnings: $44m) and more than double earnings growth from the North America division (FY21 earnings: US$6m).

Brickworks 12-month price chart