Brickability Group PLC (AIM:BRCK) “offers a ‘holy trinity’ of value, growth and financial quality,” according to broker Shore Capital following up a trading update today.
“Its track record is excellent, with 15 deals completed since IPO (August 2019), the most high-profile of these being the acquisition of Taylor Maxwell in June 2021, which was awarded AIM’s ‘Transaction of the Year’ award,” the London-based broker noted.
Shore Cap added that the contribution of acquisitions to revenue and earnings development has been underappreciated by the market this year.
Acquiring Modular Clay products, for example, increased its specification sales and access to European manufacturers.
On Tuesday, Brickability revealed it expects full-year 2023 underlying profits [EBITDA] to be roughly £43mln, saying trading over the summer months has been strong and the UK housebuilding end market was described as “resilient”
Brickability trades on a price-earnings-ratio of 8.3 and EV/EBITDA ratio of 6.2 which does not fully capture its high sustainable return on equity and growth potential, Shore Cap added.
Buy with a target price of 130p, is Shore's view.