Michelmersh Brick (MBH) H2 2024 earnings summary

Executive summary

• Revenue declined 9.3% to £70.1m, reflecting a competitive pricing environment and product mix, but performance remained resilient amid a 30% UK brick despatch volume drop since 2022.

• Specialist manufacturer of premium clay bricks and prefabricated components, producing over 120 million bricks and 17 million brick slips annually across eight sites in the UK and Belgium.

• Diverse product portfolio with seven market-leading brands, serving RMI, new-build residential, and commercial sectors in roughly equal measure.

• Adjusted EBITDA was £14.0m (margin 20.0%), down from £17.8m (23.0%) year-over-year; net cash at year-end was £6.0m, with a £20m undrawn facility supporting financial resilience.

• CEO Peter Sharp to retire in 2025, with Ryan Mahoney appointed CEO Designate.

Financial highlights

• Revenue: £70.1m (down 9.3% year-over-year); Gross profit: £25.1m (down 16.6%); Gross margin: 35.8% (down from 38.9%).

• Adjusted operating profit: £10.1m (down 26.3%); Adjusted EBITDA: £14.0m (down 21.3%).

• Basic EPS: 6.59p; Adjusted EPS: 8.18p (down 31.3%); NAV per share: 104.0p (up from 100.3p).

• Net cash: £6.0m (down from £11.0m); available £20m borrowing facility.

• Dividend payments remained stable, with £4.2m paid out for 2023 and full year dividend up 2.2% to 4.60p.

Outlook and guidance

• High quality opening order book for FY25 and positive order intake momentum.

• Mid-single digit price increase (around 5%) implemented at end of Q1 2025 to offset cost inflation.

• Over 60% of 2025 energy requirements hedged; strong balance sheet supports capital allocation and dividend policy.

• Targeting normalized EBITDA margin of 23-25% and maintaining a strong balance sheet.

• Well positioned to remain resilient even if market volumes stay 30% below 2022 levels.