REG - Michelmersh Brick - Half Year Results
03/09/2024 07:00
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RNS Number : 6158C Michelmersh Brick Holdings PLC 03 September 2024
3 September 2024
Michelmersh Brick Holdings PLC
("MBH", the "Company", or the "Group")
Half year results for the six months ended 30 June 2024
Michelmersh Brick Holdings PLC (AIM: MBH), the specialist brick manufacturer
and brick-fabricator, is pleased to report its half year results for the six
months ended 30 June 2024.
Financial Highlights:
30 June 2024 30 June 2023 Change
Statutory results
Revenue £35.4m £42.0m (15.7%)
Gross margin 36.2% 36.9% (0.7%)
Operating profit £4.1m £6.1m (32.8%)
Profit before tax £4.1m £6.1m (32.8%)
Basic earnings per share 3.37p 5.00p (32.6%)
Cash from operations £0.9m £7.6m (88.2%)
Net cash £4.1m £11.8m (65.3%)
Dividend per share 1.60p 1.50p 6.7%
Adjusted results*
Adjusted EBITDA(1) £7.2m £8.7m (17.2%)
Adjusted operating profit £5.3m £6.8m (22.1%)
Adjusted profit before tax £5.3m £6.8m (22.1%)
Adjusted earnings per share 4.28p 5.73p (25.3%)
Strategic and Operational Highlights:
· Resilient first half of 2024, with revenue down 15.7% from H123,
despite a sector wide c.40% decline in brick volume demand over the last 18
months driven by economic uncertainty
· Decrease in volumes in line with management expectations and
outperforming market despatch volumes; a result of the diversity of our end
markets and the quality of our products
· Balanced opening order book supported first half performance and
maintained through the start of the second half
· Continued focus on collaboration with customers to deliver
appropriate portfolio pricing
· Proactive approach to our sustainability initiatives with £2.5
million of capex invested in efficiency improvements across our manufacturing
base
· Active management of input costs on a risk-based approach, with
energy costs continuing to be hedged
· Benefits of a strong balance sheet in challenging markets with
net cash of £4.1 million and £20 million borrowing facility underpins
financial resilience and flexibility to pursue a balanced capital allocation
policy
· Declaration of interim dividend of 1.60 pence (+6.7% on H123)
underlines the Board's confidence in the outlook of the business and its
commitment to progressive returns for shareholders
Outlook
· Positive momentum in our order intake and at levels not seen
since 2022
· Focus on maintaining a well-balanced forward order book and
appropriate pricing expected to support demand across our diverse end market
customer base
· The medium term fundamental market drivers for our business are
encouraging and we are very well positioned, but given the current challenges
in our sector and uncertainty of a market recovery the Board expect our second
half outturn to be broadly reflective of our first half performance.
Commenting on the results, Tony Morris, Chair of Michelmersh Brick Holdings
PLC, said:
"Despite the challenges the wider construction industry and UK brick market
continue to face, the Group has been able to deliver a resilient first half
performance, growing our market share at a time when UK brick volumes are off
c.40% over the last 18 months. This is testament to the team's resolute
focus on delivering high quality products and customer service to a broad and
diverse end user base.
"As we move through the second half of the year, we will continue to actively
manage our input costs, whilst focusing on maintaining the positive momentum
we are seeing in our balanced order book, which is at levels not seen for the
past 24 months. With the strength of our balance sheet and net cash position,
we are positioned well to trade through the ongoing challenging market
conditions and as a result expect our second half performance to be broadly in
line with our interim results."
(*)The Directors believe that adjusted measures provide a more useful
comparison of business trends and performance. Adjusted results exclude
exceptional costs associated with acquisitions and aborted corporate
transactions and the amortisation of acquired intangibles. The term adjusted
is not defined under IFRS and may not be comparable with similarly titled
measures used by other companies. (.)Adjusted performance results are
reconciled with statutory results in the Chief Executive Officer's Statement
below.
(1) EBITDA is defined as earnings before interest, tax, depreciation and
amortisation.(.)
An analyst briefing will be held virtually at 09:30am today. To attend, please
email michelmersh@yellowjerseypr.com (mailto:michelmersh@yellowjerseypr.com) .
The Company also notes that it will be hosting an online presentation
to retail investors on Friday, 6 September at 10:00am. Those wishing to join
the presentation are requested to register via the following link: Meeting
Registration (https://forms.gle/f7gyiKwYxwz4uSUM7) .
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION AS STIPULATED UNDER THE MARKET
ABUSE REGULATION (EU NO. 596/2014) AS IT FORMS PART OF UK DOMESTIC LAW BY
VIRTUE OF THE EUROPEAN UNION (WITHDRAWAL) ACT 2018.
Michelmersh Brick Holdings PLC Tel: +44 (0) 1825 430 412
Peter Sharp, Chief Executive Officer
Ryan Mahoney, Chief Financial Officer
Canaccord Genuity Limited (NOMAD and Joint Broker) Tel: +44 (0) 20 7523 8000
Max Hartley
Bobbie Hilliam
Harry Pardoe
Berenberg (Joint Broker) Tel: +44 (0) 20 3207 7800
Richard Bootle
Detlir Elezi
Patrick Dolaghan
Yellow Jersey PR Tel: +44 (0) 7747 788 221
Charles Goodwin Tel: +44 (0) 7775 194 357
Annabelle Wills
About Michelmersh Brick Holdings PLC:
Michelmersh Brick Holdings PLC is a business with seven market leading brands:
Blockleys, Carlton, FabSpeed, Freshfield Lane, Michelmersh, Floren.be and
Hathern Terra Cotta. These divisions operate within a fully integrated
business, combining the production of premium, precision-made bricks, pavers,
special shaped bricks, bespoke Terra Cotta products and prefabricated brick
components. The Group also includes a landfill operator, New Acres Limited,
and seeks to develop future landfill and development opportunities on
ancillary land assets.
Established in 1997, the Company has grown through acquisition and organic
growth into a profitable and asset rich business, producing over 122 million
clay bricks and pavers per annum. Michelmersh currently owns most of
the UK's premium manufacturing brick brands and is a leading specification
brick and clay paving manufacturer.
Michelmersh strives to be a well invested, long term, sustainable,
environmentally responsible business. Opportunity, training and security for
all employees, whilst meeting the needs of stakeholders are at the forefront
of everything we do. We aim to lead the way in producing some
of Britain's premium clay products and enhancing our environment by adding
value to the architectural landscape for generations to come.
We are Michelmersh Brick Holdings PLC: we are "Britain's Brick Specialist".
Please visit the Group's websites at: www.mbhplc.co.uk
(http://www.mbhplc.co.uk) , www.bimbricks.com (http://www.bimbricks.com)
and www.sustainablebrick.com (http://www.sustainablebrick.com/)
Chief Executive Officer's Statement
I am pleased to report on a resilient start to our 2024 financial year and
provide details on further progress against our strategic objectives. These
half year results have been delivered in what remains a very challenging
environment across the construction industry with the timing of any reduction
in interest rates acting as a significant drag on consumer sentiment and
demand across our key markets. As ever, the Board remain hugely grateful to
all of our people who continue to support the Group so well by manufacturing
the highest quality products and delivering best in class service.
Despite the significant current challenges in our sector, the fundamentals in
our end markets remain positive with a critical shortage of both new
residential and social housing, a significant legacy housing inventory
constructed with brick facades underpinning future Repairs, Maintenance and
Improvement ("RMI") demand together with requirements for specification and
brick-cladding remedial solutions. The new UK Government are openly committed
to reversing the decades long decline in housing formations with a stated
objective of 1.5 million new homes over their first parliament. Our strategic
approach remains unchanged by focusing on targeting our broad product
portfolio to address a balanced demand across each of these segments and in
our view this underpins the resilience of our business as we focus on
delivering returns for shareholders. The longevity and depth of our customer
relationships support this approach, and we are focused on maintaining our
partnerships by delivering an excellent product and service.
Our fundamental core competency remains our significant strength in the
premium end of the brick market in the UK and Benelux markets. We view the
long-term fundamentals of these markets as positive, with brick continuing to
be the façade material of choice due to its longevity, sustainable and energy
efficiency qualities, low-cost base and broad aesthetic appeal. Demand for
bricks across the sector has declined over the last eighteen months by c. 40%
in line with the more negative consumer environment. Consequently, brick
inventory volumes for the sector remain above the five-year average of c.450
million albeit relatively stable at c. 525 million as capacity has been
removed from the market. However, our ability to address the market's broad
spectrum allowed us to grow our market share over that period as we have
outperformed the broader level of decline in despatch volumes.
The Group's fundamental ability to deliver operational cash generation
continues to give us the confidence to follow a balanced capital allocation
policy, with continued investment in projects that address our strategic
objectives to improve the sustainability of our manufacturing operations and
support ongoing improvements in production efficiency. We remain committed to
our dividend policy and the declaration of an increased interim dividend for
the period underlines our confidence in the outlook for the business. We will
also look to supplement dividends with share buybacks where the Board
determines that it is appropriate to do so to deliver value for shareholders
and represents an attractive investment opportunity for the Company. Balancing
the returns for our shareholders through dividends and buybacks alongside
ensuring we maintain well invested manufacturing sites are central to the
Group's capital allocation priorities. Whilst the timing of any further
acquisitions are now more uncertain given the availability of opportunities in
our core markets, the Board will however consider any opportunities where it
believes it would deliver shareholder value. This strategy leaves us
well-positioned to deliver further progress and shareholder value in the
second half of 2024 and beyond.
Group Results
Financial Highlights
Half year ended Half year ended
30 June 2024 30 June 2023 Change
Revenue £35.4m £42.0m (15.7%)
Gross margin 36.2% 36.9% (0.7%)
Adjusted* EBITDA(1) £7.2m £8.7m (17.2%)
Adjusted* operating profit £5.3m £6.8m (22.1%)
Operating profit £4.1m £6.1m (32.8%)
Adjusted* profit before tax £5.1m £6.8m (22.1%)
Profit before tax £4.1m £6.1m (32.8%)
Adjusted* basic earnings per share 4.28p 5.73p (25.3%)
Basic earnings per share 3.37p 5.00p (32.6%)
Dividend per share 1.60p 1.50p 6.7%
(*)The Directors believe that adjusted measures provide a more useful
comparison of business trends and performance. Adjusted results exclude
exceptional costs associated with acquisitions and aborted corporate
transactions and the amortisation of acquired intangibles. The term adjusted
is not defined under IFRS and may not be comparable with similarly titled
measures used by other companies. Adjusted performance results are reconciled
with statutory results in the Chief Executive Officer's Statement below.
(1) EBITDA is defined as earnings before interest, tax, depreciation and
amortisation.
The ongoing challenges in the broader construction market have affected the
trading performance in the business in the first half, with the Group being
impacted across all of our financial metrics.
Revenue for the six months reduced by 15.7% to £35.4 million over the
equivalent period in 2023 (HY23: £42.0 million). This performance over the
first six months was predominantly due to the combination of a broad 8%
reduction in despatches across the portfolio from the start of the period and
our focus on appropriate portfolio pricing to maintain diversity in our
forward order book. Importantly, this is also reflective of the strong
despatch performance in the first half of the prior year comparable given the
more positive market conditions at the start of 2023.
We continue to trade in a very challenging environment which has seen sector
wide UK brick despatches falling some 40% over the last 18 months. However, we
have not seen this level of decline across the Group and are pleased to report
that we have increased our market share in this current environment. We see
this as an important indicator reflecting the overall resilience of our
business model. This approach is evidenced by our important commercial
indicator of order intake where we have continued to experience positive
momentum at levels not seen since 2022, reflecting the benefits of our product
portfolio's broad reach and the strong customer loyalty and distributor
relationships we have across our end markets. This visibility continues to
support our decision to maintain our production volumes alongside our planned
capital improvement programme as we look to deliver maximum operational
leverage from our broad manufacturing base.
As a result of the lower revenue, adjusted operating profit of £5.3 million
was down 22.1% on the comparative 2023 period (HY23: £6.8 million) and
adjusted profit before tax of £5.3 million was down 22.1% (HY23: £6.8
million). We have started to see more stability in our cost base and we
continue to manage our input costs on a risk based approach. As such, we have
secured over 80% of our energy requirements for 2024 and see this as an
appropriate hedged balance as we see some opportunity in the potential for
improvements in the pricing of utilities. Energy contracts are also in place
for 40% of our expected requirements in 2025 with further contracts into 2026
in line with this approach. The results and strategy underline the Company's
continuing success of managing our operational efficiency to maximise our
financial returns, whilst importantly maintaining a close relationship with
our loyal customers through our ability to deliver a greater degree of pricing
visibility.
Adjusted EBITDA of £7.2 million is lower by 17.2% against 2023 (HY23: £8.7
million). As we highlighted in our 2023 year end results, this is at a broadly
stable EBITDA margin of 20.3% (HY23: 20.8%), reflecting the importance of the
partnership with our customers as we balance our financial performance and
focus on earnings growth alongside the necessity to secure robust forward
demand in our core markets.
On a reported basis, the results include the impact of the amortisation of
acquired intangibles and some exceptional items we incurred over the last 12
months. The adjustment of £0.7 million for the amortisation of intangibles is
in line with 2023 with the one-off impact this year of the net exceptional
costs of £0.4 million, being £1.0 million incurred in relation to an aborted
corporate transaction offset by the impact of the removal of £0.6 million of
the non-cash deferred consideration associated with our FabSpeed acquisition
from November 2022. As a result, operating profit of £4.1 million was 32.8%
below 2023 with profit before tax reflecting the same performance also down
32.8% at £4.1 million.
After a tax charge of £1.0 million (HY23: £1.4 million), the Group recorded
a profit for the period after tax of £3.1 million (HY23: £4.7 million). The
tax rate of 24.5% (HY23: 23.5%) reflects our expected effective Group tax rate
for the full year, which is a 1.0% increase on 2023 following the change
announced in the 2021 Budget and ratified by parliament which increased the
standard rate of UK corporation tax from 19% to 25% effective from 1 April
2023.
Basic earnings per share decreased by 32.6% to 3.37p (HY23: 5.00p).
The table below (Adjusted Performance Measures) provides a clear
reconciliation of the adjusted performance to the reported numbers.
Adjusted performance measures:
Half year ended Half year ended Change Year ended
30 June 30 June 2023 31 December 2023
2024
£000 £000 £000
Operating profit 4,145 6,079 (32.8%) 12,338
Adjustments:
Exceptional costs 444 - -
Amortisation of acquired intangibles 684 684 1,370
Adjusted operating profit 5,273 6,763 (22.1%) 13,708
Depreciation 1,917 1,968 4,105
Adjusted EBITDA 7,190 8,731 (17.2%) 17,813
Finance income/(expense) (16) 33 119
Depreciation (1,917) (1,968) (4,105)
Adjusted profit before taxation 5,257 6,796 (22.1%) 13,827
Basic earnings per share 3.37p 5.00p (32.6%) 10.44p
Adjusted basic earnings per share (a) 4.28p 5.73p (25.3%) 11.91p
(a) Includes adjustments to exclude amortisation of acquired intangibles
Group Cash and Working Capital
Cash generated from operations for the six months ended 30 June 2024 was £0.9
million, compared to £7.6 million for the same period in 2023. As a result,
operating cash conversion from adjusted EBITDA was well below our usual levels
at 12.7% compared to 87.3% in 2023. This was largely the result of our
receivables balance at the half year returning to more normalised levels
following a very quiet fourth quarter in 2023 which impacted collections in
the first half. Additionally, we continue to operate throughout all of our
manufacturing locations and have invested a further £3.0 million in inventory
which we continue to view as appropriate as we target supporting our
commercial teams with the right product flexibility. We will also take this
opportunity to bring forward planned capex improvement works at our Carlton
facility in the fourth quarter with a two month shutdown ensuring that there
are no interruptions of product supply for our customers.
As a result of these timing differences and our ability to turn inventory to
cash we remain very confident in the underlying fundamental cash-generating
ability of the business and we expect operating cash conversion to return to
more historic levels in the second half.
Half year to Half year to
30 June 2024 30 June 2023
Net cash generated from operations £0.9m £7.6m
Tax paid (£1.6m) (£1.2m)
Purchase of property, plant and equipment (£2.5m) (£2.2m)
Aborted corporate transaction costs (£1.0m) -
Proceeds from sale of land - £1.1m
Own shares acquired - (£1.0m)
Settlement for cancelled share options - (£1.8m)
Settlement for exercised share options (£1.0m) -
Lease payments (£0.4m) (£0.3m)
Dividend paid (£1.4m) (£1.2m)
Other £0.1m (£0.1m)
Net (decrease)/increase in cash and cash equivalents (£6.9m) £0.9m
Net cash £4.1m £11.8m
At the half year the Group had net cash of £4.1 million (HY23: £11.8
million).
Our operating cash generation, net cash position and undrawn Sterling and Euro
denominated bank facility of £20 million provides the Group with
considerable financial resilience and flexibility to pursue a balanced
capital allocation policy.
Property, plant and equipment
Our capital expenditure in the first half of the current financial year
highlights our continued focus on proactive delivery of sustainability
improvements alongside maintaining well invested and efficient manufacturing
facilities. The principal expenditure over the first half was focused on
Floren where we brought forward and completed a significant plant maintenance
programme that was planned for the fourth quarter. The production was offline
for eight weeks but we successfully supplied all of our customers'
requirements during the period and we commenced the installation of a new
exhaust scrubber system to improve the environmental efficiency of our
manufacturing process but also to facilitate changes in our input materials
mix to extend the life of our mineral reserves.
Continuing our planned expansion of our FabSpeed brand we completed the
installation of a new facility at our Carlton site to move our existing
Stanley operations and to add brick cutting capacity, and we have subsequently
now closed that previously leased site. Alongside, we continued our programme
of planned roll-outs to electrify our fork-lift fleet which during the first
half focused on Carlton.
Following the successful improvements at Floren we have taken the decision to
bring forward planned capex at Carlton in the second half. A significant kiln
refurbishment project and key equipment upgrades originally scheduled for
2025, will now be completed in November and December this year. Again, working
with our customers and targeting our inventory build leading up to this
scheduled gap in production, we are confident in continuing to supply all our
customers' requirements.
Settlement of share options exercised
We continue to prioritise the future expected returns of shareholders by
focusing on the volume of our issued share capital. Accordingly, following the
departure of Frank Hanna as Joint Chief Executive in April 2024, 0.85 million
of his 2019 LTIP Tranche options issued under the legacy 2017 LTIP were
exercised having met the full vesting criteria and cash settled. The cash
settlement value of £1.0 million was paid in the first half which included
all associated employment tax obligations.
Sustainability
As one of the four pillars of our core company values, sustainability remains
a focus for incremental positive and proactive change for our business. The
Group continued to report and track progress against nineteen non-financial
KPI disclosures in alignment to our goal to reach net zero by 2050. The Group
continues to demonstrate significant reductions in carbon and energy intensity
ratios whilst also continuing to reduce the use of plastic, wood and mains
water usage across the Group.
The Group continues to invest in projects which will enhance our environmental
profile, improve our efficiency and lower our consumption of energy or raw
materials. In the period we completed scrubber upgrades to our Floren plant in
Belgium, which complement the portfolio of investments this year. Continuing
this approach, the Group is the first brick manufacturer to make a commitment
to reduce non-essential plastics through investing in carbon negative
bio-plastics produced from sugar cane.
The Group's products also continue to be utilised in the facades of multiple
award-winning projects. Fulfilling our commitment to sustainability, we are
proud to see that once again we have led the sector in the Brick Awards
shortlisted projects this year. In the sustainability category, five of the
seven shortlisted projects specified our products, including the HyBrick
display which was unveiled at the Science Museum in London earlier this year
in a decade long exhibition and reinforces our dedication for decarbonisation.
Board changes
Martin Warner retired as Chair at the AGM in May 2024. Martin was succeeded by
Tony Morris who was previously a Non-Executive Director. Martin was
appointed Chair in 2016, having previously been joint founder and Chief
Executive Officer. He oversaw transformational growth over that period
supporting the Group on its progressive journey to becoming a leading premium
brick manufacturer and brick prefabrication specialist across
the UK and Belgium. On a personal note, I would like to thank Martin for
his valued support and guidance over many years. With Tony as Chair we look
to the future with confidence and the business is in a strong position to
continue to deliver against our strategy.
Frank Hanna left the business in April to take up the position of CEO of the
Brickability Group. Frank and I were appointed Joint Chief Executive Officers
("JCEO") in January 2016 and since that time I am very proud of the
significant growth and success the Company has achieved. Since 2016, the
Group's annual brick output has increased from 70 million to over 122 million,
the portfolio has broadened to include brick fabricated products and the
Company has entered the European market with Floren. Frank has been associated
with the Group for 32 years, joining officially in 2010, when as a shareholder
of Freshfield Lane it was acquired by Michelmersh. Frank was an excellent JCEO
of Michelmersh and a highly valued colleague and member of the Board and he
left with our sincere thanks for his immense contribution in building a
business with strong fundamentals underpinned by the longevity and depth of
our customer relationships.
Rob Fenwick, who joined the Board in 2023, stepped down from his position as
Non-Executive Director of the Group in July and we would like to thank Rob for
his efforts during his time with the Board.
With these changes, we believe that the Board has the appropriate balance of
skills and experience to support the Group as we continue to deliver against
our strategic objectives.
Dividend
The Board recommended a final dividend in respect of 2023 of 3.00 pence per
ordinary share to shareholders. The dividend was approved by shareholders at
the AGM on 16 May 2024 and as a result the liability for the dividend payment
was accrued in the 30 June 2024 interim accounts with the £2.8 million
payment made after the half year end on 11 July 2024.
Reflecting our fundamental belief and commitment to maintaining the importance
of our progressive dividend policy, the Board has declared an interim dividend
of 1.60 pence per ordinary share ("pps") (30 June 2023: 1.50pps). The dividend
will be paid on 9 January 2025 to members on the register on 1 December 2024
and is not accrued in the 30 June 2024 interim accounts. The ex-dividend date
will be 30 November 2024. With this interim dividend declaration, the Board is
maintaining its policy of one third of the total annual dividend being paid at
the interim stage and two thirds of the total annual dividend being paid at
the full year.
Outlook
The resilience of our business model has been heavily tested by the c.40%
decline in sector wide UK brick despatches over the last 18 months. Alongside
these challenges we have remained resolute in focusing on our core principles
of well-maintained and efficient operations that manufacture the highest
quality premium brick products for our customers. We believe in the
fundamentals of our business which is underpinned by the quality of our
product portfolio and the strength of our customer and distributor
relationships. Following the robust first half, maintaining a well-balanced
forward order book covering a broad range of end markets is essential as we
look to continue our progress in the second half.
Across the Group, current order intake is running ahead of our manufacturing
capacity which is contributing to a growing quality forward order book
underpinning our second half revenue expectations. This is despite the timing
of an inflection in construction activity levels remaining uncertain. The
contraction in sector demand and our strong balance sheet continue to provide
an opportunity to flex our production planning ensuring inventory volumes of
core products are available to ensure near term order opportunity fulfilment.
We are focused on continuing to diversify across RMI, housing, commercial,
social and specification projects and this whole market strategy continues to
underpin our resilient outlook.
Despite the lower consumer demand in our sector, we remain well placed at the
premium end of the brick market in the UK and Benelux markets. The new UK
Government has provided early indications that they are focused on
improvements to the overall planning process alongside looking to champion the
architectural quality of new construction activity both of which are
supportive of the Group. These elements indicate that the long-term
fundamentals of our markets are positive, with brick continuing to be the
façade material of choice due to its longevity, sustainability and energy
efficient qualities in use, low cost and broad aesthetic appeal. We believe we
are well-positioned operationally to benefit from an improvement in wider
market conditions, including a more favourable interest rate environment
Our active risk management of our cost base has supported our ability to
maintain medium-term price stability, and with the focus on partnerships and
collaboration with our customers we have not changed our portfolio pricing
ahead of the second half as we work to support and prioritise forward demand.
Our ability to deliver sustainable operational cash generation underpins our
liquidity position at the half year. Combining this with our £20 million
undrawn borrowing facility provides the Group with both considerable financial
resilience and flexibility to pursue a balanced capital allocation policy as
we focus on delivering further value for our shareholders.
The Group continues to operate on the basis of maintaining a well-balanced
forward order book, deep and loyal customer and distributor relationships
supported by a robust demand from the specification, housing, RMI and
commercial sectors. The medium term fundamental market drivers for our
business are encouraging and we are very well positioned, but given the
current challenges in our sector and the timing of any reductions in the
interest rate environment remaining uncertain the Board expect our second half
to be broadly reflective of our first half performance. We believe our broad
brick and brick-fabrication portfolio supports our ability to address the full
breadth of our end markets and it is these quality fundamentals in our
business that provide resilience and underpin our outlook and as a result give
us confidence for the second half and beyond.
Peter Sharp
Chief Executive Officer
Consolidated Income Statement
6 months 6 months 12 months
ended 30 ended 30 ended 31
June June December
2024 2023 2023
£'000 £'000 £'000
Unaudited Unaudited Audited
Revenue 35,390 42,038 77,338
Cost of sales (22,567) (26,535) (47,279)
Gross profit 12,823 15,504 30,059
Administration expenses (8,015) (8,776) (16,421)
Amortisation of acquired intangibles (687) (684) (1,370)
(8,702) (9,460) (17,791)
Other income 24 35 70
Operating profit 4,145 6,079 12,338
Finance income/(expense) (16) 33 119
Profit before taxation 4,129 6,112 12,457
Taxation (1,012) (1,436) (2,795)
Profit for the period 3,117 4,676 9,662
Basic earnings per share attributable to the equity holders of the 3.37p 5.00p 10.44p
company
Diluted earnings per share attributable to the equity holders of the 3.25p 4.86p 10.09p
company
.
Consolidated Statement of Comprehensive Income
6 months 6 months 12 months
ended ended ended
30 June 30 June 31 December
2024 2023 2023
£'000 £'000 £'000
Unaudited Unaudited Audited
Profit for the financial period 3,117 4,676 9,662
Other comprehensive income/(expense)
Items which may subsequently be reclassified to profit or loss
Currency movements 96 280 41
Items which will not subsequently be reclassified to profit or loss
Revaluation deficit of property, plant and equipment - - (2,692)
Revaluation surplus of property, plant & equipment - - 1,199
Tax credit on exercise of options - - 26
Deferred tax on revaluation movement - - 383
96 280 (1,043)
Total comprehensive income for the financial period 3,213 4,956 8,619
Consolidated Balance Sheet
As at As at As at
30 June 2024 30 June 2023 31 December 2023
£'000 £'000 £'000
Unaudited Unaudited Audited
Assets
Non-current assets
Intangible assets 23,266 24,617 23,951
Property, plant and equipment 64,756 65,004 63,366
88,022 89,621 87,317
Current assets
Inventories 19,537 10,685 16,462
Trade and other receivables 13,152 15,380 9,241
Corporation tax receivable - - -
Cash and cash equivalents 4,086 11,794 10,958
Total current assets 36,775 37,859 36,661
Total assets 124,797 127,480 123,978
Current liabilities
Trade and other payables 15,686 19,752 12,803
Lease liabilities 620 493 698
Corporation tax payable 963 1,360 1,528
Total current liabilities 17,269 21,605 15,029
5,420 5,420
Non-current liabilities
Lease liabilities 1,246 581 743
Deferred tax liabilities 15,357 15,815 15,362
16,603 16,396 16,105
Total liabilities 33,872 38,001 31,134
Net assets 90,925 89,479 92,844
Equity attributable to equity holders
Share capital 19,181 19,181 19,181
Share premium account 16,724 16,724 16,724
Other reserves 20,745 22,229 21,615
Retained earnings 34,275 31,345 35,324
Total equity 90,925 89,479 92,844
Consolidated Statement of Changes in Equity
Share Share Other Retained Total
Capital Premium Reserves Earnings Equity
£'000 £'000 £'000 £'000 £'000
As at 1 January 2023 19,181 16,724 21,435 31,629 88,969
Profit for the period - - - 4,676 4,676
Currency difference - - 280 - 280
Total comprehensive income - - 280 4,676 4,956
Total comprehensive income
Share based payment - - 548 - 548
Shareplan purchase - - (34) - (34)
Purchase of own shares - - - (967) (967)
Dividends paid - - - (1,229) (1,229)
Dividends payable - - - (2,764) (2,764)
As at 30 June 2023 19,181 16,724 22,229 31,345 89,479
Profit for the period - - - 4,986 4,986
Currency difference - - (239) - (239)
Revaluation deficit - - (2,692) - (2,692)
Revaluation surplus - - 1,199 - 1,199
Tax credit on exercise of options - - 26 - 26
Deferred tax on revaluation - - 383 - 383
Total comprehensive income - - (1,323) 4,986 3,663
-
Share based payment - - 710 - 710
Purchase of own shares - - - (1,007) (1,007)
Shareplan purchase - - 101 - 101
Deferred tax on share options - - (102) - (102)
Dividend payable - - - 2,764 2,764
Dividend paid - - - (2,764) (2,764)
As at 31 December 2023 19,181 16,724 21,615 35,324 92,844
2,212
Profit for the period - - - 3,117 3,117
Currency difference - - 96 - 96
Total comprehensive income - - 96 3,117 3,213
-
Share based payment - - 29 - 29
Released on exercise of options - - (995) - (995)
Dividends paid - - - (1,388) (1,388)
Dividends payable - - - (2,778) (2,778)
As at 30 June 2024 19,181 16,724 20,745 34,275 90,925
Consolidated Statement of Cash Flows
6 months 6 months 12 months
ended ended ended
30 June 30 June 31 December
2024 2023 2023
£'000 £'000 £'000
Unaudited Unaudited Audited
Net cash generated by operations 896 7,596 13,620
Taxation paid (1,581) (1,235) (2,790)
Net cash (used in)/generated by operating activities (685) 6,361 10,830
Cash flows from investing activities
Purchase of property, plant and equipment (2,544) (2,205) (3,085)
Proceeds from sale of land - 1,068 1,101
Exceptional payments (958) - -
Investment in intangible assets - - (30)
Net cash used in investing activities (3,502) (1,137) (2,014)
Net cash used in investing activities (1,004) (1,004) (227)
Cash flows from financing activities
Interest received/(paid) (16) 33 119
Lease payments (409) (313) (885)
Settlement for cancelled share options - (1,798) (1,798)
Settlement for exercised share options (995) - -
Purchase of own shares - (1,001) (1,941)
Proceeds from share schemes 29 - -
Dividends paid (1,388) (1,229) (3,993)
Net cash used in financing activities (2,779) (4,308) (8,498)
Net (decrease)/increase in cash and cash equivalents (6,968) 916 319
Cash and cash equivalents at beginning of period 10,958 10,598 10,598
Foreign exchange differences 96 280 41
Cash and cash equivalents at end of period 4,086 11,794 10,958
Cash and cash equivalents comprise:
Cash at bank and in hand 4,086 11,794 10,958
NOTES TO THE GROUP INTERIM REPORT
1. GENERAL INFORMATION
Michelmersh Brick Holdings PLC ("the Company") is a public limited company
incorporated in the United Kingdom under the Companies Act 2006 (registration
number 3462378). The Company is domiciled in the United Kingdom and its
registered address is Freshfield Lane, Danehill, Haywards Heath, West Sussex,
RH17 7HH. The Company's Ordinary Shares are traded on AIM, part of the
London Stock Exchange plc. Copies of the Interim Report and Annual Report and
Accounts may be obtained from the address above, or at www.mbhplc.co.uk
(http://www.mbhplc.co.uk) .
2. ACCOUNTING POLICIES
Basis of preparation
The interim financial information in this report has been prepared using
accounting policies consistent with IFRS as adopted by the United Kingdom.
IFRS is subject to amendment and interpretation by the International
Accounting Standards Board (IASB) and the IFRS Interpretations Committee and
there is an ongoing process of review and endorsement by the United Kingdom.
The financial information has been prepared on the basis of IFRS that the
Directors expect to be adopted by the United Kingdom and applicable as at 31
December 2024. The group has chosen not to adopt IAS 34 "Interim Financial
Statements" in preparing the interim financial information.
Statutory accounts
Financial information contained in this document does not constitute statutory
accounts within the meaning of section 434 of the Companies Act 2006 ("the
Act"). The statutory accounts for the year ended 31 December 2023 have been
filed with the Registrar of Companies. The report of the auditors on those
statutory accounts was unqualified, and did not contain a statement under
section 498(2) or (3) of the Act.
The financial information for the six months ended 30 June 2024 and 30 June
2023 is unaudited.
3. EARNINGS PER SHARE
The calculation of earnings per share is based on a profit of £3,117,000 (six
months ended 30 June 2023 -£4,676,000; 12 months ended 31 December
2023-£9,662,000) and 92,592,874 (at 30 June 2023 93,516,114 and 31 December
2023, 92,535,734) being the weighted average number of ordinary shares in
issue, excluding those held in the employee benefit trust.
Diluted
At 30 June 2024 there were 3,419,294 (June 2023: 2,779,140, and at 31 December
2023: 2,946,585) dilutive shares under option leading to 96,012,168 shares (30
June 2023: 96,295,254, and at 31 December 2023: 95,482,319) being the weighted
average number of ordinary shares for the purposes of diluted earnings per
share. A calculation is performed to determine the number of share options
that are potentially dilutive based on the number of shares that could have
been acquired at fair value, considering the monetary value of the
subscription rights attached to outstanding share options.
Own shares held
At 30 June 2024 1,085,705 (30 June 2023 - 1,275,465;31 December 2023 -
1,142,845) ordinary shares were held by Michelmersh Brick Holdings
PLC Employee Benefit Trust (the "EBT") and are intended to be used to satisfy
the exercise of share options by employees. The EBT is a discretionary trust
for the benefit of the Company's employees, including the Directors of the
Company. Dividends on these shares have been waived.
The market value of the shares held in the trust at 30 June 2024 was £1.0m
(30 June 2023; £1.2m). All 1,085,705 shares held by the EBT were acquired by
the trust prior to the period and 57,140 shares were used in the period to
satisfy awards following the vesting of shares relating to Company share
incentive schemes.
As a result of the share buyback programme, 2,225,000 shares had been bought
up to the 30 June 2024 (31 December 2023 - 2,225,000) and are held in treasury
and excluded from the weighted average share calculations and the dividends on
these shares have been waived.
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