Brickworks Limited (BKW) Earnings Call Transcript & Summary

Welcome to the Brickworks results briefing for the First Half 2025. The formal presentation will be followed by a question-and-answer session. We will respond to phone questions first, followed by online questions. I would like to now hand the conference over to Mr. Mark Ellenor, CEO.

Good afternoon, and welcome to the Brickworks results briefing for the half year ended 31st of January 2025. With me today is Grant Douglas, our CFO; and Megan Kublins, Executive General Manager, Property and Development. Moving on to today's agenda, I will start by providing an overview of the first half performance and safety. Megan will provide an update on the Property division. I will then provide an overview of the performance of investments in building products, and Grant will then take you through the financials in more detail. I will later return to discuss the outlook for Brickworks. We will then be happy to take questions at the conclusion of the presentation. Now moving to the overview and the key highlights. Today, I'll be sharing some key highlights that demonstrate the strength of our diversified business as we've seen positive developments across several areas continued dividend growth and property performance and investments. Despite challenging market conditions in Building Products, particularly in our North America division, we remain confident in our long-term outlook in these markets. Our property rental income increased again this half, and we anticipate continued growth driven by rent reversion and our development pipeline. Cap rates remained stable during the half, which is encouraging. Additionally, our vacancy rate is impressively low at less than 1% with only one 4,400 square meter facility vacant at the end of the half. In terms of our investments, we saw another solid performance with a dividend received from sole path up by 8%, demonstrating the strength and resilience of our investment portfolio. For Building Products Australia, the business delivered consistent performance and pleasingly maintained its EBITDA margin in soft market conditions. In North America, the market conditions remain difficult but we're well positioned with an efficient set of modern plants along with a world placed retail and distributor network. This puts us in a good position to respond effectively as the market improves. We believe in providing consistent returns for our shareholders through dividends and are proud of our long history of dividend growth and the stability this provides. The Board has declared an interim fully franked dividend of $0.25 per share, an increase of $0.01 or 4%. Looking beyond the short-term weakness in Building Products, we are optimistic about their future given the shortage of housing in both markets. We forecast conditions to improve in 2026 and to further strengthen from 2027 as part of the cyclical recovery. Underlying net profit after tax was $76 million compared to a loss of $37 million in the prior corresponding period. As we announced last week, we have recorded a noncash impairment within our North American business unit, which Grant will talk about more later. This has resulted in the group recording a statutory net profit after tax of $21 million for the half year. Group underlying EBITDA was $148 million in the first half compared to a loss of $40 million in the first half of 2024. This was impacted by property revaluations. Net debt increased by $39 million to $721 million, with gearing increasing slightly to 22% and operating cash flow up 11% to $59 million. We continue to be focused on -- sorry. The slide on the screen displays our key divisional metrics, which I'll go through in more detail as I review each division. I'm pleased to share that we have for a second year in a row been recognized by Sustainalytics as an ESG top-rated company in the construction materials sector. We continue to remain focused on improving workplace safety. The total recordable injury rate was 10.1, a slight increase in the first half from 9.7 in the full year '24. Across our operations, there were 2 lost time injuries, 1 in Australia in line with the prior corresponding period and 1 in North America, down from 2. The improvement in injury rates across North American operations is particularly pleasing. This continues to be a key focus as Brickworks integrate systems, technology and leadership practices. Only through disciplined implementation of safety management systems and procedures, together with behavioral leadership and safety training programs, can we continue to prioritize and reduce our workplace injury rate. Turning now to divisional performance, and I'll hand over to Megan for our property review.

Thank you, Mark. Property delivered an EBITDA of $38 million for the first half compared to a loss of $178 million in the prior corresponding period. Trust rental income continued to increase, up 8% with rent from new properties at Oakdale West, partially offset by the reduction in rent following the sale of the M7 assets in January 2024. Brickworks share of net Trust income was $26 million for the half. This result was in line with the prior period after taking into account increased borrowing costs. During the first half, 2 new assets on the Oakdale West estate, buildings 4C and 4D reached practical completion, providing a further 37,000 square meters of fully leased area to the JV Trust. A development profit of $3 million was recorded on completion of these buildings in the current period with the majority of development profit recognized in the previous financial year. Land sale activities continued in the half, with $9 million profit provided from the sale of a building at Wetherill Park in New South Wales and vacant land at Yatala in Queensland, both from the manufacturing trust. A former quarry near Bowral was also sold, providing $3 million in profit. A total of 15 assets were externally valued during the half, including all properties in the manufacturing trust. Capitalization rates remained stable with no significant impact on the valuation outcomes. In February 2025, post period end, a significant milestone was achieved with the completion of buildings 4A and 4B, the final 2 buildings at Oakdale West. These buildings will add 33,000 square meters to the estate with 17,500 already leased and 15,500 ready for immediate occupation. Final development profit on these 2 properties will be recognized in the second half, noting that the majority of development profit was recognized in the previous financial year. The Oakdale West state, which has been under construction for over 5 years, is a significant JV asset, which will be valued at over $1.8 billion, with 375,000 square meters gross lettable area contributing a strong rental return to the trust. With the completion of Oakdale West, development activity is now focused on the Oakdale East 2 estate. As seen in the photo on the screen, construction on the Amazon facility in the background is well underway with completion expected in early financial year '26, contributing development profit in the second half of this financial year. Pre-lease negotiations are underway for the next adjacent facility to be built on the pad in the foreground, which is 42,000 square meters and due to commence construction midyear. This is expected to contribute to development profit in late financial year '26. Resilient demand for service land capable of accommodating facilities over 30,000 square meters provides the opportunity to develop the remaining 151,000 square meters of gross lettable area over the next 5 years. The total value of leased assets held across the Property Trust was $4.66 billion at the end of the half year. The Trust also holds a further $750 million in land that is currently under development. After including borrowings of $1.4 billion, total net asset value is just under $4 billion. Brickworks' 50% share of net asset value is just under $2 billion. Gearing within the Trust was 26% at the end of the period consistent with the gearing level at 31 July '24. Demand for warehousing space has been exceptionally high over the last 4 years. This surge driven by growth in e-commerce and increasing inventory levels has resulted in prime face rents in Sydney, increasing an average of around 21% per annum for the last 3 years. We estimate that the current passing rent for the Western Sydney states within the JV Trust is now approximately 26% below average market rent. Including the Brickworks' manufacturing Trust, the current annualized rent across our portfolio is $198 million. At current market rates, the rent potential of the property, of Trust assets once fully developed, is around $341 million. This includes a mark-to-market rental uplift on current leased assets of $62 million. In addition, the existing development pipeline will deliver around $82 million in new rent. This includes $7 million from the completion of Oakdale West, $56 million in rent is expected from Oakdale East Stage 2. This will be realized over the next 5 years as this estate is built out and $18 million in rent from the longer-term development opportunity at Rochedale. Looking more closely at the significant mark-to-market rental opportunity of existing lease facilities and the expected timing of this uplift. The chart on screen shows the lease expiry profile of the industrial JV Trust. This shows that around 30% of the uplift can be achieved within the next 5 years. This is a sum of the dark brown columns on the chart within that time period, representing vacancies and leases that do not have extension options and rental cuts. As such, these leases should revert to market rent at the end of the current lease term. An additional 15% of leases expire within the next 5 years, but have an extension option with a rental cap. The uplift on these leases will depend on whether the tenant exercises the extension option. I will now hand over to Mark.

Turning to investments, which includes a 25.65% interest in Soul Patts and a 14.46% interest in FBR Limited. Investments delivered an underlying contribution of $73 million for the year, down 4%. During the half, normal cash dividends of $52 million were received from Soul Patts, up 8% on the prior corresponding period. The combined market value of our investments was $3.263 billion at the end of January, down 4%. Our shareholding in Soul Patts dates back to 1968. Soul Patts is now Australia's leading publicly listed investment house with a broad asset exposure, as shown by the chart on the left of the screen. Soul Patts has delivered strong returns with annualized total returns, including dividends of 13% per annum for the past 25 years. This represents outperformance of 4.5% per annum versus the ASX All Ords Accumulation Index. Now turning to Building Products Australia. Residential commencements continue to be at historically low levels, particularly in our key markets of New South Wales and Victoria. The multi-residential segment has been particularly soft, down 24% in New South Wales and 12% in Victoria and remains at historically low levels, following several years of decline. Current activity levels in the sector remained the weakest since 2012. Building activity continues to be subdued and extended approval time lines and higher costs. As a result, the usage of bricks, masonry and roof tiles on site is now typically lagging commencements by 6 months or more. Nonresidential building activity has varied significantly across the country, comparing the last 6 months with the prior corresponding period. We've seen increases in South Australia and Queensland, offset by declines in Victoria and New South Wales. Revenue for the half year was down 1% to $321 million. EBIT for continuing operations was $22 million and EBITDA was down by 4% to $50 million, resulting in an EBITDA margin of 16%, which was in line with the prior corresponding period. Despite the lower sales volume, margins were maintained as a result of the implementation of price increases, focused on cost control and ongoing productivity improvements. The business continues to benefit from operational efficiencies generated over the past 12 months by consolidating Austral Bricks and Austral Masonry into one operating division, restructuring of Bristile Roofing and continuing to focus on cost control across the business. Building activity in the United States has been mixed during the period, varying significantly by region and segment. The Midwest, Northeast and Mid-Atlantic regions make up around 90% of our sales. 57% of product is supplied into the nonresidential and multi-residential segments with the Northeast region being the largest market in these 2 segments. Both the non-res and multi-res segments are characterized by a higher proportion of premium products and typically attract higher margins than the more competitive single-family residential segment. In the Midwest region, which is Brickworks North America's single largest market, building activity was down 3% in the multi-res segment, and activity in the non-res segment was slightly up 2%. Although the single-family market was up 16% in the period, this segment for Brickworks is typically dominated by lower-margin sales in a highly competitive market that is still subject to oversupply. Similarly, in the Northeast region, the key multi-res and non-res segments were both down 7% and 15%, respectively, compared to the prior corresponding period. While the single-family market was up, typically books have a smaller wall share in this region. In the Mid-Atlantic region, building activity was mixed with commencements up 23% in the non-res segment and the single-family segment was up 13%. Multi-res construction activity was down 3%. We -- Although building activity in the non-res sector showed some signs of improvement, large pipeline of work remains in the design phase and is not yet contracted, highlighting some pockets of strength. However, overall activity remains subdued due to regulatory, permitting, financing and weather delays. Sales volume in Building Products North America was significantly lower during the period with sales revenue of $194 million, down some 13%. EBITDA for the half was a loss of $3 million, and EBIT was a loss of $15 million. A significant driver of the negative performance during the half was a faster-than-anticipated decline in market conditions in core regions, coupled with unusually extreme winter weather conditions in our key regions in the latter part of the half impacting shipments. Strong competition in the retail segment has resulted in some loss of market share at the company-owned Brickworks Supplies store network. In addition, earnings competition was lower in all regions due to project delays and disruptions to available product lines in the brickwork supply stores. Brickworks Supply primarily operates in the Midwest region and supplies both company manufactured and third-party produced bricks. In the Midwest, the consolidation from 6 Glen-Gery plants to 3 and the strategy to transition 2 more company manufactured bricks has resulted in some disruption to the short-term product ability for customers. This disruption is expected to be resolved as brick production and third-party products were realigned with the market demand. As a consequence of the lower sales volume, manufacturing plants were slowed or taken off-line to manage the lower demand levels and to control inventory. 4 out of 8 plants were shut down for periods of 6 to 8 weeks at a time during the half compared to the previous corresponding period where no plants were taken offline. Our production was 15% lower during the period, which has caused a reduction in plant efficiency and higher unit manufacturing costs resulting in a significant decline in EBITDA margin. The Glen-Gery 6-year plant rationalization program is now complete. During the period, commissioning at the Rocky Rigs plant in Maryland was finalized and brick shipments have commenced to the local and U.K. markets. A new packaging line was installed at the Adel plant in Iowa driving further productivity improvements at this important Midwest residential plant. Brickworks fleet of plants and Brickworks Supply Store network in North America are now well placed to take advantage of the anticipated market recovery over the medium term. I'll now hand over to Grant to take you through the financials.

Thank you, Mark. Group underlying EBITDA was $148 million for the first half compared to a loss of $40 million in the first half of 2024, which was significantly impacted by property revaluations. After depreciation and amortization, the underlying group EBIT was $108 million. Total borrowing costs were $40 million, consistent with the same period last year, and there was a tax benefit of $8 million, mainly due to the utilization of previously unrecognized capital tax losses. This resulted in an underlying net profit after tax from continuing operations of $76 million. Significant items decreased net profit after tax by $55 million, resulting in a net -- statutory net profit after tax of $21 million for the half. The key significant item in this period relates to a noncash impairment of $55 million net of tax based on AASB 136, impacting the carrying value of right-of-use assets and plant and equipment. This consists of the impairment we announced to the market last week in relation to the Brickworks North America cash generating unit. This business has been impacted by a faster-than-anticipated decline in market conditions driving a 13% reduction in revenue compared to the previous period. In addition, strong competition in the retail segment resulted in some loss of market share at the company-owned Brickworks Supply Store Network, as Mark discussed earlier. The resultant reduced demand assisted plant shutdowns during the period to control inventory levels causing reduced plant efficiency and higher unit manufacturing costs. The subdued billing activity and scaled back production will delay the realization of further benefits expected from plant rationalization and upgrades completed in recent years. The slide on screen provides further detail on underlying earnings across the group. Property and revaluations were a large negative in the first half of 2024, which does distort the relative performance between the periods. Across the operating divisions, Building Products Australia EBITDA margin held steady with EBITDA down 4%. Building Products North America result was down and recorded an EBITDA loss of $3 million. Within property, net trust income was relatively steady compared to the prior year, while lower development profits were recorded this half with the majority of development profit related to the Oakdale West estate recognized in the previous financial year. And development profit related to the first Oakdale East Stage 2 warehouse due in the second half of this financial year. Investment earnings were slightly down in the corresponding period. Turning to cash flow. Operating cash flow for the period was $59 million, up 11% from $54 million. Higher cash generation was mainly due to increased dividends and distributions and improved working capital movements relative to the same period last year, impacted by a reduction in Building Products EBITDA. Capital expenditure was reduced to $21 million compared to $36 million in the first half of 2024 and included projects at the Rocky Ridge and Adel plants in North America. The company has now completed its major capital expenditure program that has been underway for the last 6 years. Dividend payments of $66 million were made during the period. Looking now at a range of key financial indicators. Net debt increased to $721 million, up by $39 million over the period. Our available liquidity remains strong with balance sheet gearing ratio, net debt to equity at 22%, up from 20% at 31 July 2024. Importantly, our banking covenant gearing is at 16%, well below the covenant limit of 40%, which gives us significant financial flexibility. Our asset backing continues to drive the delivery of earnings over the long term. As of 31 January 2025, the market value of our Soul Patts holding is $3.23 billion compared to a carrying value of $2.24 billion. Our Property Trust net tangible assets stand at $1.99 billion as of 31 January 2025. Plus, we hold 3 -- we retain 3 parcels of land held within the Building Products business that have been identified for potential development. Based on an independent market valuations, these development sites have a current as-is value of $219 million, further underlining the stability and value we are building. Additionally, our Building Products assets are well positioned to deliver increased operating leverage as market conditions recover. Our priority continues to be on maximizing cash generation across the group. We remain focused on delivering sustainable dividends to our shareholders and building long-term value. I'll now hand back to Mark to discuss the outlook.

Thank you, Grant. Our investment in Soul Patts is expected to continue to deliver a stable and growing stream of earnings and dividends over the long term. Structural trends towards e-commerce and the digital economy will continue to drive demand for our prime industrial facilities for many years to come. We expect strong growth in net rental income from the Property Trust over the coming years from new developments and lease renewals of existing assets. We continue to progress our new developments and to identify opportunities within our portfolio. In the immediate term, we expect development profits in the second half of '25 from the Amazon facility, which is expected to be completed in the early full year of '26. Our Building Products business in Australia and North America continue to face challenges in the short term with subdued building activity across most of our key markets for the remainder of the calendar year. In the U.S., temporary plant closures to control inventory are expected to ease throughout the remainder of the calendar year. Looking beyond the short-term weakness, conditions are forecast to improve from our 2026 and further strengthen from 2027. While positive projections exist, industry-wide factors such as labor shortages, material cost increases, elevated interest rates and market uncertainties necessitate cautious optimism. We remain well placed to deliver strong returns when market conditions improve following our restructuring, portfolio rationalization and significant plant investments. Our priority remains focused on maximizing cash generation and cost control across the group. With a diversified portfolio of high-quality assets, Brickworks is well placed to continue delivering long-term value to our shareholders. Thank you, everyone, and we will now take some questions.

[Operator Instructions] Your first question comes from Lee Power with UBS.

Mark, Grant, Megan, just on the property piece. So if I look at your potential growth in trust net rent. That slide is unchanged with Oakdale East 2 to still set to contribute $56 million in net rent. I've noticed that, that still assumes a 223-meter square rent number. If we then pair that with the comments around what rental growth has been doing, it still sounds while it might moderate, it's still there and you're kind of talking to face rents being 220 to 240. Are you being conservative on that 223? Or is there something else in the assumptions around demand or incentives going forward that means you're putting in a 223 assumed market rent in that Oakdale East chart?

Look, we're probably being a little bit conservative with that because I think that, that's a reasonable sort of approach to the market sort of at the moment. So we didn't really see -- we could have increased it a little bit, but we didn't really see any sort of reason to be able to do that for the presentation.

Okay. So it's not a question that there's -- you're worried about no rental growth in face rents in industrial or anything like that?

Not at all.

Excellent. And then, Mark, just on the U.S. a little bit. I mean it sounds pretty tough, but what are your customers telling you on the ground around turning points or any additional color around what's actually going on over there?

Yes, thanks. And I've been now over the last couple of weeks, myself on the ground. And you see this through the election cycle, no matter whether America or here that things generally do slow down a little bit. This is a particularly big election, as you all know. So a lot of state governments over there that just weren't letting the contracts out. So we saw the sort of slowdown come across our sort of key markets. They also did have a particular -- I never blamed the weather in my life, right, but particularly winter of a strong winter right across the key markets all the way down to sort of the South Carolina as well, which held up shipments there in December and January overall. So I think we'll see a bit of a bounce back from that. But overall, I think it's just about confidence and certainty. They had 2 early interest rate cuts and then nothing for a while. And then the sort of bank script the interest rates back up a little bit. The Fed came out overnight, the rates on hold. So I think that will give everyone another boost over there. But I think relatively, it will be fairly subdued over the course of this calendar year. But the underlying demand, like Australia for the houses haven't been built over the last couple of years is certainly there, and they're sort of projecting 7% or 8% growth a year in '26 and '27. And I think we'll just have a nice sustained upturn.

Your next question comes from Daniel Kang with CLSA.

So Mark, just with regards to North America, I just wondered if you can provide some color in terms of what your assessment of channel inventories are now. Have your own inventory readjustment process, how is that going? Are you seeing some of your competitors follow in their own plant shutdowns? And just to wrap up, I guess, given these measures that you're taking, do you expect North American Building Products to return to profits in the second half? Or is that too soon?

Yes. Thanks, Daniel, for your question. I mean, actively over the last 5 years, as you know, and you've all followed it's been on a rationalization sort of journey. So we've got the same capacity over there now that we did sort of -- when you've added all the businesses together, but we're running them out of 8 plants as opposed to 16 plants. So we've really fixed up the utilization so we can run them harder. I mean we're back with -- back sales have sort of come off between 10% and 15%. And this is generally what we're seeing across the sector. We've pulled back the factories for periodic shutdowns of sort of a month or 2 months at a time while retaining our employees just to balance the inventory. So we've been able to do that. So sales off 15%, inventory didn't go up for the half, which we're pleased, albeit that sort of hurt your margin overall because you got your plants that are shut. So I think we're managing the best that we can. We still have a good supply for our customers out of all of our brick yards across the Midwest and the Northeast and Mid-Atlantic area. So I think we're in a pretty good position there, should things turn up. A lot of our work over there is architecturally specified product. So it's all in the non-res, multi-res segment. So that's a long lead times, and we're sort of seeing some of the demand for samples and so forth pick up across our key region. But what we've seen is a bit of a mix change there as well. And you'll see it in the slides just on the pie chart there that we are selling more into the single family segment than we used to beforehand. And you see that through the approvals coming through as well. So there's not quite as much margin in that, but albeit they're easier products to make throughout our factories. So we haven't been sort of caught there in that sort of shift of what we're selling to our customers. And as I said, I think it will be a fairly subdued year this year. And I did say things we're certainly gearing on things, and that's what we're hearing over the end today with our customers that things will pick up in the following year.

Maybe a question from Megan, if I can. Just wondering if you can share with us how we should be thinking about development profits in the second half? Maybe shed some color in terms of any recent sales in the year?

So really, development profits in the second half should be driven by the Amazon development that we have under construction -- well under construction on Oakdale East. So I think I sort of explained in the presentation, that's the main focus for this financial year.

Your next question comes from Gus [ Friberg ] with Macquarie.

Just another one for Megan on property, just a quick modeling question here. Property gearings stable year-on-year at 26%. How should we think about that target going forward?

Look, that's really sort of a target that we have for the property Trust, to obviously keep the gearing fairly low. But as Oakdale East gets built out, they may actually be just a little bit of an increase in that. Obviously, we have plenty of headroom because our covenant sort of go up to 60%. So we're dealing with quite low leverage in those trusts.

I might just add to that. That 26% is across the entire property portfolio. So within -- there's no debt sitting within the manufacturing trust across the industrial, the stabilized asset is about 33%. So Gus, as you're sort of going forward, that's probably a reasonable level to think about it sort of as East gets built out over time. That's probably a reasonable level to think about.

That's perfect. And maybe just a quick follow-on from Dan's question earlier on North America. Just asking it, I guess, a little bit differently. Would you expect those planned shutdowns to continue in the second half, just considering the market remain been quite soft this year?

Yes. No, we'll see an easing of the plant shutdowns in the second half. We've sort of got the stock where we really wanted it to be and sort of held at a level there. So we'll see an easing of the plant shutdowns. We have 1 significant shutdown for our Mid-Atlantic plant, our molder brick plant out of Pennsylvania to do some upgrade works on the packaging line, which will be about a 4-week shutdown in April. But other than that, we really don't see any other plant shutdowns unless the market deteriorates another level, which we're not anticipating.

There are no further phone questions at this time. I'll now hand back to address any online questions.

We have a few questions online. The first one is from Peter Hartman. Has the Board contemplated a takeover of FBR to create a building business in the U.S., thereby creating further demand for Brickworks products?

FBR, remember, we have seen the investor in FBR, I think it was probably 15 years ago now, and we're interested in the technology and labor is an issue, bricklaying labor across both countries, but particularly in North America. Now they have done a trial over there with Pulte and there's constructed 9 homes, which went quite well. But we continue to support FBR, we believe, in the technology. But at this point in time, taking them over is really not part of our core business.

A question from Tim Mural. Considering the U.S. result, would management consider the business a good use of capital, particularly considering Brickworks sold some of Soul shares to fund the expansion in 2008?

Yes. Well, we've been over there for 6 years now, and hopefully, the results would have been a little bit better than what we've reported for the last 6 months. But we knew we're going to -- it was a turnaround when we went over there and we've grown sort of so much in Australia in the building products space, especially the bricks space, in particular, that we couldn't really grow any further in this market. So we took our skills and headed to the U.S. And we picked the business over there in Glen-Gery that had been around since 1885, I think, and that was very strong in the architectural market but was it really needed capital spend and the Brickworks knowledge on all of the plants and it really needed to build scale into that business as well. So it's been a good road over the last 5 to 6 years. And I think overall, we're in a position now where we've got a great suite of plants that don't require any huge capital investment. We've got our store network. We're vertically integrated. So 50% of our sales. We're in control of selling ourselves and got a terrific distributor network. So it's been a good project. It's taken us a little bit longer than we thought to get there. But I firmly believe that we're in a strong spot now. And as the market picks up, you'll see much better returns out of the U.S.

A question from Derek Francis. Given the market value of Soul's versus the book value, why don't you do a buyback?

Yes. Look, obviously, we did highlight in the presentation that Soul Patts is carried on our books at roughly $1 billion less than the market value. So certainly some strong contribution to underlying NAV there. In terms of doing share buybacks, look, obviously, we're very focused on making sure that we're very careful with how we manage our cash at this point in time. We prefer to reward our shareholders through a dividend given our focus on managing cash flow.

A question from John [ Marston ]. Is the Trump election likely to have any impact on our U.S. business?

No, I don't think the election either way would really have an impact on our business in the U.S. There seems to be some optimism in the U.S., our labor participation rates in our factories is very, very strong at the moment, which is great. I believe it's just a little bit too early to tell. I think people just need certainty and I think as per the sort of figures that they've outlined in the '26 and '27 upturn in the building cycle, I think we can be confident with the underlying demand that we'll certainly hit those numbers.

A question from Jayden. In Oakdale East 2, the plan is to complete the initial civil works straight away for the full estate road, service and building pads. Do you have an indicative cost to complete to get to that stage? Will the funding for this and for the full build combined increase in debt in the trust?

Okay. Sure. Yes. So look, I think the way that we build out Oakdale East is stage by stage. So we're not doing civil works right across the whole estate all at once. We're doing that stage by stage. So certainly, we've got civil works complete on the current pads that we are building for Amazon and the one that is coming up that we spoke about, and then we'll progress effectively precinct by precinct, over the development of that estate. In terms of cost to complete, look, we don't have that detail called out. But obviously, we're looking at sort of a market construction cost to work our way through that. funding for that full build-out will come via an increase in debt. So the current construction that we've done to date with the infrastructure as it stands and obviously, Amazon has been funded by the JV partners. As we then go into the next stage, we will start to inject some leverage into that trust to build out the balance of the estate, and that should be as we said earlier, sort of in line with the level of leverage that we've got across the rest of the portfolio.

A further question here. What was the underlying earnings per share for the period? What was the net asset value per share at the end of the period? And is there any guidance for EPS for the next 6 months?

In terms of the detail, we have included that in our review of results document that we uploaded. So underlying EPS for the period was $0.563 per share, so significantly up on negative [ 0.272 ] last half. Basic EPS, [ 0.158 ] versus negative [ 0.386 ] the previous half and then net tangible assets per share, $19.26, very slightly down on $19.42 for the same period last year. In terms of EPS forecast, look, we don't have a specific EPS guidance that we put out, but we've guided in terms of where we expect the market to go in the second half.

A following -- another question here from Michael Sanderson. Was there a strategy to reduce the business' corporate debt?

Corporate debt is certainly a focus of ours at the moment. And we are in a cyclical business. Building products is certainly towards the bottom of the cycle. Obviously, a lot of focus coming into this year on rationalizing and consolidating our 2 Building Products businesses, both here and in the U.S., and you've seen that certainly demonstrated in our being able to hold EBITDA margin in Australia. And related to that, then obviously, the next part is focusing on managing our capital spend. We've gone -- come through 5 years of significant CapEx spend globally. You'll have seen in the last 2 quarters -- 2 halves that we've reduced our CapEx spend period-on-period, further reduction in this period versus the same time last year from $36 million down to $21 million. So those are important parts of that focus. And then pleasingly, we do have growing distributions out of our Property Trust and growing dividends out of Soul Patts, which all helped to contribute to managing our corporate debt position.

And one final question. Could you please provide some details about the Investment segment? What were the key contributors and attractors during the half?

Look, in terms of real detail there, obviously, the prime drivers of our investment results is the Soul Patts' result, which has separately been published today. I think basically very much in line with where we were in terms of contribution versus last year.

There are no further questions.

All right. Thank you, everyone, for joining into our half year announcement today, and we look forward to seeing you -- most of you anyway on our road shows over the next week or so. So thank you and good afternoon.