Trading through Q3 and into Q4 to date has proven to be strong and not blunted by any of the headwinds that management held caution against at the time of reporting its Interims (on 1 December). Taylor Maxwell, and within that its timber merchanting division, has outperformed expectations and consequently management is now guiding to FY22E EBITDA of at least £32m, 13% ahead of our previous estimate and a baseline for FY23E from which it can still feel confident of growing profits by 20% plus. Management's identification, timeliness and integration of acquisitions alongside its solid organic performances underscore the sense that Brickability is capable of delivering sustainable, quality earnings growth. Together with today's upgrades, we feel the market is failing to accord Brickability a rating deserving of at least par with its wider peer group; one clearly not evident with reference to an estimated FY23 (March) EV/EBITDA of 7.2x, EV/EBITA of 7.8x, PE 10.3x and FCF yield of c8%. Our model ‘Fair Value' based on the revised numbers increases to 131p or c140p on an annualised 2023 basis. Buy.
