Michelmersh Brick (MBH) H2 2024 earnings summary

Executive summary

• 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.

• 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.

• Portfolio includes seven market-leading brands, with a focus on high-quality, premium products for diverse end markets: RMI, new-build residential, and commercial/specification.

• 2024 saw record recognition with nine Brick Development Association awards, including the Supreme Award.

• Business model emphasizes resilience through diversification, strong customer relationships, and a collaborative distribution model.

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 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.

• Dividend payments continued, with £4.2m paid in 2023 and a proposed final dividend of 3.00p, full year dividend up 2.2% to 4.60p.

• Net cash dropped from £11m to £6m, primarily due to increased inventory and capital investments.

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

Outlook and guidance

• Entered 2025 with a strong, high-quality order book and continued positive order momentum into Q1.

• First price rise in two years implemented in April 2025, expected to support margin recovery toward normalized EBITDA margin of 23-25%.

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

• Sector remains sentiment-driven; business remains resilient even if market stays at current reduced levels.

• Focus on operational leverage, expansion of prefabricated and brick slip capacity, and maintaining a strong balance sheet.