Michelmersh Brick Holdings PLC 

Michelmersh Brick Holdings PLC (LSE: MBH) is an FTSE AIM All-Share index listed business with seven market-leading brands: Blockleys, Carlton, Charnwood, Freshfield Lane, Michelmersh, Hathern Terra Cotta and Floren.

Pre Close Trading Update & H1 FY24 Results

1. Revenue Decline Amid Market Challenges: Revenue decreased by 7% to £35.4 million (H1 2023: £42.0 million) due to an 8% reduction in despatch volumes and a broader 40% sector-wide decline in UK brick demand over 18 months. Despite this, Michelmersh outperformed the market by maintaining a balanced order book and leveraging its diverse product portfolio.
2. Resilient Profit Margins with Strategic Cost Management: Adjusted operating profit declined by 1% to £5.3 million (H1 2023: £6.8 million), while gross margins remained relatively stable at 36.2% (H1 2023: 36.9%). Active hedging covered over 80% of energy costs for 2024, supporting medium-term price stability despite challenging input cost environments.
3. Strong Dividend Growth Reflects Confidence: The interim dividend increased by 7% to 1.60p per share (H1 2023: 1.50p), emphasizing the company’s commitment to progressive returns for shareholders. This growth underlines confidence in the business’s long-term resilience and operational performance.
4. Cash Flow and Financial Resilience: Cash from operations significantly decreased to £0.9 million (H1 2023: £7.6 million) due to higher receivables and inventory investments. However, net cash of £4.1 million and an undrawn £20 million borrowing facility highlight Michelmersh’s financial flexibility and ability to weather ongoing market challenges.
5. Sustainability Initiatives and Operational Investments: The company invested £2.5 million in projects focused on manufacturing efficiency and environmental improvements, including a new exhaust scrubber system and facility upgrades. Sustainability remains central to its strategy, with ongoing efforts to reduce carbon intensity and enhance production efficiency.
6. Trading Update & Results: Michelmersh Brick Holdings PLC has shown resilience in the final quarter of 2024, with order intake exceeding manufacturing capacity and a strong, diverse order book supporting demand. Despite uncertainties in construction activity, collaboration with customers has sustained performance. The Board expects full-year results to meet market expectations, with results to be announced on 25 March 2025.

Share Price Chart

Markets are trading in a highly volatile zone currently due to certain macroeconomic issues and geopolitical tensions prevailing. Therefore, it is prudent to follow a cautious approach while investing.

Michelmersh Brick Holdings PLC (LSE: MBH)  was trading at the current market price of GBX 103.15 (as of 20 December 2024, 09:45 AM GMT)

Note 1: Past performance is not a reliable indicator of future performance.

Note 2: The reference date for all price data, currency, technical indicators, support, and resistance level is 20 December 2024. The reference data in this report has been partly sourced from REFINITIV.

Note 3: ‘Kalkine reports are prepared based on the stock prices captured either from the London Stock Exchange (LSE) and or REFINITIV. Typically, both sources (LSE and or REFINITIV) may reflect stock prices with a delay which could be a lag of 15-20 minutes. There can be no assurance that future results or events will be consistent with the information provided in the report. The information is subject to change without any prior notice.

Note 4: Dividend Yield may vary as per the stock price movement.