FBR (ASX:FBR): A good idea, but will it ever be much more than an idea?

FBR is not much more than a promise so far

A robot that can build a brick house – a great idea and one that FBR (ASX:FBR) claims to be working on. But it remains to be seen if it’ll ever advance from the R&D stage to full-scale commercialisation.

In January 2024, the company executed a binding agreement with CRH (an American concrete block supplier) to build up to 10 houses using the robot. 12 months on, the option period expired without CRH exercising its option for renewal. The company claimed,’ We have successfully introduced our technology to one of the largest and most important markets in the world’. Only 12 months ago it promoted this JV as its,’ clear strategy for the company to enter the United States market’.

Clearly it is in a non-stop cycle as follows:

• Sign up one customer,
• Build a few houses for it,
• The technology doesn’t go beyond building a few houses – not because it doesn’t work (at least not to the extent the market is told), but the co-signer isn’t interested in continuing.

This is just what happened with CRH.

Consider that FBR had 662.7m shares when it listed, but now has over 5 billion on issue. Obviously, building any kind of robotic technology doesn’t come cheap, but these investments are not generating money back anywhere near what is being ploughed in.

In fact, the little money being generated is mostly R&D rebates, of which FBR’s most recent was A$6.3m. But the company is in a loan facility agreement with FC Capital whereby it receives anticipated funds in advance and used $4.3m of that money to repay money owed. Yes, there is some money from small-scale deals, but not as much as it makes from the R&D rebate cycle.

How FBR got to this point

FBR listed on the ASX in 2015 via a reverse takeover of the shell of DMY Capital. By that time, it had spent $7m in development for its robot (known as Hadrian), secured patents in 11 countries and grants from the federal government, Dale Alcock and an unnamed major Australian brick manufacturer. The goal was to let Hadrian construct an average house in 1-2 days.

You might think the company just wants to put brickies out of work, but FBR has denied this stating that it instead wants to eliminate the poorer aspects of the job. Co-founder Mark Pivac cited research that only 25% of candidates starting a bricklaying apprenticeship continued in this field after it was concluded. Those who do, typically retire significantly younger than workers in other industries given the physical strain. FBR also promised to help Australia’s housing affordability crisis by increasing housing supply through faster construction.

In late 2017, the AFR reported full production would happen in 2019. That didn’t happen, but by late 2018 it reached the milestone of building an average house (with 3 bedrooms and 2 bathrooms) in less than three days. On top of this, it passed Factory Acceptance Testing (FAT), indicating not only that it could build houses, but could do so meeting strict Australian building standards as well.

In mid-2020, FBR said that Hadrian could lay 200 blocks in an hour – not traditional bricks, but larger blocks (albeit ones with unique materials that gave them lighter weight while still being more durable than conventional bricks). It is now February 2025, and it’s fair to say the company has gone a lot slower than even its own management anticipated.

The US deal

As we noted, the company entered into an arrangement with CRH Ventures to construct up to 10 homes in the USA and give CRH an option to enter into an exclusive joint venture. The deal provided for a binding but conditional purchase order for 20 Hadrian X units at US$2m each plus sale taxes, with 3 being delivered as soon as possible and the balance over time subject to certain joint venture achievements – a 30% gross margin and a certain utilisation rate. There was a pathway to having 300 Hadrian units, but this is off the table now.

The 10-house building project proceeded. The company kept filing patents and reported ‘a high level of inbound interest’ for its technology. And to be fair, the company did some small-scale construction projects in Australia. But the CRH agreement did not proceed beyond the 10 houses and the option expired. The company tried to spin it as a good thing saying it was,’ Now unrestricted in its dealings and operations in the United States’. It told investors it was engaged in discussions with builders, counties and industry incumbents across America.

Stuck in a never-ending cycle

We won’t deny that to get a technology like this would be easy or capital-light. But FBR has burned so much investor money over the years and what it has to show for it doesn’t stack up vs the money it raised. It appears unlikely that the company will ever get beyond small-scale projects with the odd joint venture option that’ll fizzle out within a year or so.

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