Michelmersh Brick (MBH) H1 2024 earnings summary

Executive summary

• Revenue declined 15.7% year-over-year to £35.4m amid a 40% contraction in UK brick volumes, but market share increased due to product quality and diverse end markets.

• Adjusted EBITDA fell 17.2% to £7.2m, with margin stable at 20.3%; adjusted operating profit dropped 22.1% to £5.3m.

• Interim dividend increased 6.7% to 1.60p per share, reflecting confidence in outlook and commitment to shareholder returns.

• Maintained net cash of £4.1m, supported by a £20m undrawn borrowing facility, providing capital allocation flexibility.

• Diverse end markets and premium product portfolio underpin operational and financial resilience.

Financial highlights

• Revenue: £35.4m (down 15.7% year-over-year); gross margin: 36.2% (down 0.7pp); adjusted EBITDA: £7.2m (down 17.2%).

• Adjusted operating profit: £5.3m (down 22.1%); operating profit: £4.1m (down 32.8%).

• Adjusted EPS: 4.28p (down 25.3%); basic EPS: 3.37p (down 32.6%); NAV per share: 98.3p.

• Net cash: £4.1m (down 65.3% year-over-year); cashflow from operations: £0.9m (down 88.2%).

• Interim dividend: 1.60p per share (up 6.7%).

Outlook and guidance

• Second half performance expected to be broadly in line with the first half due to ongoing sector challenges.

• High quality and diverse order book for H2 2024; order intake momentum at levels not seen since 2022.

• Over 80% of 2024 energy requirements hedged within budget.

• Long-term fundamentals remain positive, supported by government housing targets and brick's enduring appeal.

• Strong balance sheet and capital allocation flexibility support continued dividend policy.