The initial public offering of building materials manufacturer Wagners could struggle to realise the value executives may have hoped, after rival firm Brickworks reportedly green-lit the construction of a new 200,000 tonne Brisbane plant.
According to a number of sources, Brickworks has signed off on a new Brisbane plant with consortium partners Newman Quarrying and the Nielson Group.
But Wagners – which was valued last month at between $353 million and $513 million – plans to follow through with its IPO, according to reports, despite some analysts suggesting the impending Brickworks news could reduce investor enthusiasm.
One of Wagners’ key selling points is its cement terminal in Toowoomba, which has capacity to produce up to 800,000 tonnes per annum but currently operates at around 500,000 tonnes.
Wagners executives believe the timing is still good for the float, thanks to a solid pipeline of infrastructure construction in Queensland. They also reportedly believe the Brickworks terminal may not go ahead, with Port of Brisbane approval still required, and unlikely.
The company’s figures indicate its end-market exposure is 55% infrastructure, 30% commercial and 15% residential. It makes 48% of its gross sales in cement, and 30% in project materials and services.