Brickworks development positive for GPG

By Phil Boeyen, ShareChat Business News Editor

Tuesday 10th July 2001

Guinness Peat Group (NZSE: GPG) is set to benefit from a 15 hectare residential development on a brick factory site in Sydney.

Its Australian investment, Brickworks, says wholly owned subsidiary Austral Bricks has signed contracts to build up to 212 new dwellings on its its Eastwood brick site, pending local council approval.

Austral will receive a guaranteed payment of A$41 million over four years under the arrangement, plus a share of any additional sales once a minimum sales level is achieved.

Redevelopment will require filling more than one million cubic metres of space.

"The terms and conditions of the approval and the market strength when the development is ultimately sold, will determine the final profit outcome," Brickworks says.

Brick manufacturing has been carried out at the site since the late 1880's and the company says shale reserves are now nearing exhaustion.

Brickworks' MD, Lindsay Partridge, says after a satisfactory approval is granted, Austral's brick production will be transferred to Bowral Bricks, which was purchased earlier in the year.

"By transferring production from Eastwood to a Bowral, the combined production will operate more efficiently from a site which has ample clay reserves."

Mr Partridge says the residential joint venture will enable Brickworks to realise the value of the Eastwood site in keeping with the company's strategy of seeking better returns from its valuable property holdings.

Brickworks has eight brick and tile production operations at six locations in Sydney and Brisbane, while Austral exports to New Zealand, Asia and the Pacific region.

GPG owns around 10% of Brickworks.

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