Brickworks Limited (ASX:BKW) Managing Director Lindsay Partridge provides an update on the company's portfolio in light of COVID-19, including demand for building products here and in the US.
Thank you Clive, and thank you everyone for tuning in today to listen to myself and find out a little bit more about Brickworks (ASX:BKW)
Brickworks can trace its history back to 1908 where the Austral Brick Company was formed in St Peters here in Sydney. And in 1934, Austral Bricks was one of 26 companies to form Brickworks Limited. They were actually formed to buy the State Brickworks at Homebush Bay from the State Government, which of course later became the site of the 2000 Olympics. In 1962, the company was listed on the stock exchange, and the company has grown enormously since then. And we're now able to offer to shareholders and potential shareholders a very stable management and board, a conservatively geared company, top 200 in the ASX. We have an enormous history of dividend growth and value creation, and we have exposure to property in the new economy areas. We also have some international growth.
Next slide, please. Just looking at that value creation for shareholders, on the graph there you can see our dividend history and the asset value of the shares over that period of time back to 1976. And that was a pivotal time in the company because it was the only time since we listed where the dividend was ever reduced. So we were very pleased last month for the directors to award a 20-cent dividend increase, interim dividend which would be paid. And also we're very pleased that if you invested a thousand dollars back in 1976, that would have grown at over 13 per cent per annum for 44 years, and be worth over $260,000 today. So we've come a long way in that time. And the directors are very pleased with what's been achieved.
Next slide, please. If you look at the parts of the company today, starting with the top right-hand corner there, the investments. This was created in 1968 when the company was worried about being taken over by London Brick Company. And there was another company on the stock market, Washington H. Soul Pattinson, that had a very similar market cap to Brickworks. And it was agreed that they would swap a million shares. It was quite legal at the time. And that cross shareholding has persisted to today. Following that, Brickworks invested a further $26 million to build up its stake, which now stands a little under 39 per cent, of Washington H. Soul Pattinson. And has got a value today of $1.8 billion. So it's obviously, as you can see from that, it has been fabulous investment.
The second part of the company there, right below that, the property trust. We had a lot of surplus land we realised we didn't need for our clay reserves going forward. In the early 2000s, we decided that if we just sold the land, that'd be a one-off sugar hit for the company and the shareholders, but we felt there was a longer-term position.
So we formed a joint venture with Goodman, who was one of the world's greatest industrial property developers and trust managers. And it's been a really fabulous relationship over this last 15 years or so. So, that property trust now has grown to $2 billion. And our share of that is a little bit over $700 million. It's been a fabulous outcome for us all.
Then there's the building products in Australia, which is a traditional business. And if you went back to 2000, we had five factories in New South Wales and Queensland, and that was it. Today, that's a national business. And I'll explain a little bit more about that in a moment, but we've got $760 million worth of assets in there. And then more recently we've invested $220 million in North America. We are the leading brick maker now in the Northeast and Midwest and Mid-Atlantic regions. When you add all that up, there's over $3 billion worth of assets when you take off the debt. And our market cap is currently $2.3 billion. You can see that our market cap is very well supported by the assets that are invested in the company.
Next slide, please. Looking at Washington H. Soul Pattinson, they're a diversified investment house with an attractive portfolio of assets. The key sectors they're involved in telecoms, energy, building products, financials, health, pharmaceuticals, and property. As I said before, we own 39.4 per cent of them, with a market value of $1.8 billion. We received last year $56 million in dividends. And they, like Brickworks, have had a long history of paying dividends, and are one of only a couple of companies that has increased their dividend every year for the last 20 years. And if you had invested in Soul Pats 20 years ago, you would have received 12 cent per annum return, which was 4.4 per cent above the index. So it's been a fabulous-performing stock, and it's really been a great that Brickworks has been able to be involved with it over this long period of time.
Next slide, please. Looking now at the property. So, as I said, we started turning out surplus land. We put in the land. Goodman put in the infrastructure, and then through their contacts, they'd usually find a company that wants a warehouse, and they sign a pre-lease. And that could be anything five to 20 years. And it's some of the greatest companies here in Australia. Companies like Coles and Woolworths, and you would have heard of DHL. These are the sort of companies that rent and lease our warehouses. So, that's, as you can see here, has grown dramatically, as I mentioned before -- $710 million worth of assets. It's grown at a compound rate since 2008 of 18 per cent per annum. Inside that trust, the gearing is less than 30 per cent, so it's very conservatively managed. EBITDA in the first half was $89 million. And that compares to the full year last year, of $158 million.
Next slide, please. If you look now at the building products in Australia, we've grown to 26 plants across Australia, 40 design centres or design studios. We have 1300 employees. Our number one brand is Austral Bricks. We're the largest clay brick producer in Australia. And we make about half the bricks in Australia with every State. Austral Masonry, we're the number two masonry producer in Australia with every major State. Bristile Roofing, we're the number two rooftop manufacturer in Australia. We're in all States. And Austral Precast, we're in Queensland, West Australia and New South Wales. And in New South Wales, we have the most advanced fully automated facility anywhere in the country. Now, the revenue last year, the first half was $338 million, and $39 million dollars EBITDA. And that compares to last year where EBITDA was $88 million.
Next slide please. So, as I said, we started about 18 months ago in the Northeast, Midwest, and Mid-Atlantic regions of the United States. We bought three great businesses, the main one being Glen-Gery, which was at the time the fourth-biggest brick producer in America. Our main markets in the US are Boston, New York, Baltimore, Washington, DC, Chicago. We do a lot of architectural work, so we do schools and hospitals, fire stations. We do some of these fast-food chains, and over there they often build them in the thousands. So, it's not so much focused in residential. Only about a third of our business is residential. Two thirds of our business is determined by an architect specifying our product. Well, today we have about 770 employees. We have 10 operating plants, the one manufactured stone plant. We can produce about 400 million bricks, and we'll turn over about AU$290 million in a full and normal year. And we sell in our own right, and we sell through an extensive network of resellers and company outlets.
Next slide please. Well, the COVID virus has had a big impact on every company, and like every other company in Australia, we've had to take steps that, three or four months ago, we wouldn't have thought would be necessary. As a matter of fact, we felt that we passed the bottom of the last cycle, and were starting to improve in our sales and output in the early part of this year. So, we've had to reduce our output, particularly during April, because it can traditionally be quite a quiet period. In the US, where we had indicated that we were going to rationalise a lot of the plants, we've accelerated that, and we've come down now to the final number of plants that we're going to keep, which is the 10 running plants I mentioned. Unfortunately, we had to let both in the US and Australia a total of about 200 staff go. And while that was hard, in the longer term we had to do it, to make sure that we were right-sized for the market.
So, that will save about $20 million per annum. With fertile, non-critical capital expenditure, we had a number of large projects that were underway, we're continuing with. And we, like all other companies, we've had a lot of lessons that have come out of that. We find that our digital and sales marketing efforts have been well beyond our expectations, with us often talking to many thousands of customers in a week. We've accelerated our new product development to release a bit later in the year. We've spent a lot of time training our staff, and there's something like 400 or 500 of our staff have now done extensive training during this period. And we're also positive looking forward that both the governments in Australia and in the United States see that construction as an integral part of the recovery, and we're very heartened to see that the government here is talking about bringing a stimulus package out for housing, which might help fill a bit of a pothole we've got there that's been created over the last few months.
And of course these accelerated trends we've seen as far as online shopping is actually playing right into the hands of our property trust, so I think we'll see increased demand in that area. So whilst the situation remains dynamic and the outlook uncertain, we're in a very strong position going forward.
Next slide, please. Just giving a bit of a trading update. Looking at Australia. Our sales revenue was amazingly resilient in the last four months. It was down 10%, and that was more affected in regional areas, such as WA, or in areas such as our Precast business, which was servicing a lot of the high-rise apartments, which was one of the first areas to slow down over the last few years. The plant closures have obviously helped our cash generation, but adversely impacted our earnings. We have achieved positive earnings in the last four months. And we did receive, a couple of weeks ago, the development approval for our new $125 million brick plant at Horsley Park.
Looking to North America. Because of the acquisition, our sales are actually up 26 per cent, but in reality are pretty close to what they were last year, or down if you like, on a like for like basis of 30 per cent, if all that makes sense. But it's a county by county basis over there. And we're hoping that by the end of this week, most of Pennsylvania will open up. We're hoping that construction will recommence in New York next week. And so we're hoping that things are going to start picking up going forward.
Unfortunately or sadly, we've seen these riots, and some of them were quite close to our operations in Philadelphia, where we're building a new design studio. But I can report that no property has been damaged, and all our staff are safe and well.
As far as property is concerned, the pandemic has had no impact on our property trust rental income, which has been really good to see. Development activity has continued unabated right to this period, particularly through Oakdale East and Oakdale West. And we had a number of significant development applications approved in this last period.
Next slide please. On the screen, you can see a photo of Oakdale West, and you might get some idea of the scale of this massive project, which is well in excess of a hundred hectares. And you see there, the civil works going in, which is costing in the order of $100 million. So, it is very significant for Western Sydney. And you can see the pad start to take form there for one of our first new buildings, which we hoped to have commenced shortly.
As I said, we received approvals for that and another building in the last few months. And so, I think this is going to be something that you really need to keep an eye on, going forward. Because it's going to mean an enormous amount to Brickworks and Goodman in future years. But on the other side of that property, at Oakdale East, we also received our approvals, and that puts us in a position to subdivide that land and sell that into the property trust. And on that site we'll be building a new masonry factory, which will cost some $17 million.
Next slide, please. So, in final, if anyone has any questions, we're unable to take them here, but if you'd like to send an email to email@example.com, we'll do our best to answer the questions. So, thank you very much. And I hope you've enjoyed this presentation.Ends