Michelmersh Brick - Half Year Results
06/09/2022 07:00
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RNS Number : 3460Y Michelmersh Brick Holdings PLC 06 September 2022
6 September 2022
Michelmersh Brick Holdings PLC
("MBH", the "Company", or the "Group")
Half Year Results for the six months ended 30 June 2022
Strong first half performance and confidence in the outlook
Michelmersh Brick Holdings PLC (AIM: MBH), the specialist brick manufacturer,
is pleased to report its half year results for the six months ended 30 June
2022.
Financial Highlights:
30 June 2022 30 June 2021 Change
Statutory results
Revenue £34.0m £29.9m 13.7%
Gross margin 37.7% 40.1% (2.4%)
Operating profit £5.7m £5.2m 9.6%
Profit before tax £5.6m £5.0m 12.0%
Basic earnings per share 4.64p 4.12p 12.6%
Cash from operations £8.0m £6.7m 19.4%
Net cash/(debt) £9.9m £4.1m 141.5%
Dividend per share 1.30p 1.15p 13.0%
Adjusted results*
Adjusted EBITDA(1) £8.1m £7.6m 6.6%
Adjusted operating profit £6.2m £5.7m 8.8%
Adjusted profit before tax £6.1m £5.6m 8.9%
Adjusted earnings per share 5.12p 4.74p 8.0%
Strategic and Operational Highlights:
· Positive start to 2022, with trading performance in the first
half ahead of record 2021 period
· Resilient end market fundamentals expected to continue from broad
customer base
· Strong order book for the first half, with comparable and
well-balanced forward order book for the second half of 2022
· Consistent operational cash generation supported capital
investment focused on production efficiency and incremental output improvement
· Portfolio price increase implemented on 1 July 2022 to mitigate
ongoing elevated inflation rates
· Group cash of £9.9m and undrawn £20m borrowing facility
underpin financial resilience, strategic optionality and flexibility to pursue
acquisition opportunities
· Declaration of interim dividend of 1.30 pence (+13% on H121)
demonstrates commitment to progressive dividend policy and resilient outlook
· Careful management of input costs on a risk based approach, with
energy costs continuing to be hedged in volatile markets as appropriate
Outlook
· Our well-balanced forward order book, resilient end market demand
and anticipated margin improvement in the second half keeps us on track to
meet full year expectations
Commenting on the results, Martin Warner, Chairman of Michelmersh Brick
Holdings PLC, said:
"The Group has executed an excellent first half, culminating in record revenue
and profit for the period. We have now entered the second half with a
well-balanced forward order book, comparable with H2 2021, and continue to see
encouraging levels of order intake from our loyal customers across our diverse
end markets.
"Whilst demand for bricks remains high, the Group is closely monitoring the
impact of elevated inflation and the volatile utility markets so it can react
immediately to mitigate these headwinds.
"The Group continues to focus on delivering an excellent product and customer
service and with the resilient fundamentals of our business we remain on track
to meet full year expectations."
(*)The Directors believe that adjusted measures provide a more useful
comparison of business trends and performance. Adjusted results exclude costs
associated with acquisitions 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 Joint Chief Executives
Officers' Statement below.
(1) EBITDA is defined as earnings before interest, tax, depreciation and
amortisation(.)
An analyst briefing will be held virtually at 10:30am 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 Thursday 8(th) September at 3pm. Those wishing to join the
presentation are requested to register via the following link: Meeting
Registration (https://forms.gle/CaqwGK7piGoEPGe26) .
Michelmersh Brick Holdings PLC Tel: +44 (0) 1825 430 412
Frank Hanna, Joint 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
Georgina McCooke
Berenberg (Joint Broker) Tel: +44 (0) 20 3207 7800
Richard Bootle
Detlir Elezi
Tom Graham
Yellow Jersey PR Tel: +44 (0) 7747 788 221
Charles Goodwin Tel: +44 (0) 7775 194 357
Annabelle Wills
The information contained within this announcement is deemed to constitute
inside information as stipulated under the UK Market Abuse Regulations. Upon
the publication of this announcement, this inside information is now
considered to be in the public domain.
About Michelmersh Brick Holdings PLC:
Michelmersh Brick Holdings PLC is a business with seven market leading brands:
Blockleys, Carlton, Charnwood, Freshfield Lane, Michelmersh, Floren and
Hathern Terra Cotta. These divisions operate within a fully integrated
business combining the manufacture of clay bricks and pavers. 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 125 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/) and www.bimbricks.com
Joint Chief Executive Officers' Statement
We are pleased to present another set of strong results for the six months
ended 30 June 2022 and to report on further progress against our strategic
objectives. These results have been achieved in a challenging macroeconomic
environment with elevated inflation risks and unprecedented volatility in the
utility markets, largely driven by negative market sentiment rather than
supply side dynamics over the first half of the year.
Importantly, the fundamentals in our end markets remain supported by
Government policy and we are benefitting from our diversified end customers
that cover multiple channels. From Repairs, Maintenance and Improvement
("RMI") through to housing and commercial, social and specification projects,
our strategic approach to addressing these segments underpins our view of the
resilience of the business to continue to deliver growth. The longevity and
depth of our customer relationships provides a resilient model and we are
focused on delivering an excellent product and service whilst balancing the
needs of all our stakeholders.
We have significant strength in the premium end of the brick market in
the UK and Benelux markets. The long-term fundamentals of these markets are
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. The inherent brick manufacturing shortfall in
the UK market has continued across the first half with significant import
volumes underpinning demand, and despite softening construction sector
sentiment we see these dynamics as supporting our resilient outlook.
As a result, the Group continues to focus on manufacturing and delivering the
highest quality brick products to our broad end customer base, which underpins
average selling prices at a premium to the wider market and supports our focus
of consistently selling all the product we make, underlining the resilience in
our profit margins.
The operational cash generation of the business gives us confidence to
continue to invest in projects that address our strategic objectives to expand
and improve our manufacturing capacity, support ongoing improvements in
production efficiency, de-risk processes and deliver long term, sustainable
production.
We are committed to our progressive dividend policy, and the declaration of an
increased interim dividend underlines our confidence in the positive outlook
for the business. All of this leaves us well positioned to deliver further
progress in the second half of our 2022 financial year and beyond.
Group Results
Financial Highlights
Half year to Half year to
30 June 2022 30 June 2021 Change
Revenue £34.0m £29.9m 13.7%
Gross margin 37.7% 40.1% (2.4%)
Adjusted* EBITDA(1) £8.1m £7.6m 6.6%
Adjusted* operating profit £6.2m £5.7m 8.8%
Operating profit £5.7m £5.2m 9.6%
Adjusted* profit before tax £6.1m £5.6m 8.9%
Profit before tax £5.6m £5.0m 12.0%
Adjusted* basic earnings per share 5.12p 4.74p 8.0%
Basic earnings per share 4.64p 4.12p 12.6%
Dividend per share 1.30p 1.15p 13.0%
(*)The Directors believe that adjusted measures provide a more useful
comparison of business trends and performance. Adjusted results exclude costs
associated with acquisitions 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 Joint Chief Executives
Officers' Statement below.
(1) EBITDA is defined as earnings before interest, tax, depreciation and
amortisation
As a result of the positive trading performance in the business, the Group has
delivered strong growth and a record set of half year results.
Revenue for the six months increased by 13.7% to £34.0 million (HY21: £29.9
million) over the equivalent period in 2021. The strong revenue performance
over the first six months was predominantly due to price increases implemented
across the portfolio from the start of the period as we looked to offset the
increase in our input costs, whilst maintaining production volumes in line
with our expectations.
As a result of the strong revenue growth, operating profit of £5.7 million
was up 9.6% on 2021 (HY21: £5.2 million), and profit before tax of £5.6
million was up 12.0% (HY21: £5.0 million). As expected, the impact of the
inflationary environment, and most specifically elevated utility costs,
impacted our profit margins by around 200 basis points in the first half. The
Group's policy is to manage our input costs on a risk-based approach. As such,
we have secured over 90% of our energy requirements for 2022. Energy
contracts are in place for 50% of our expected requirements in 2023 and
further contracts into 2024 and 2025 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.
Additionally, our positive profit and earnings metrics reflect the benefit of
swiftly repaying our borrowings with the further voluntary repayment of £10.0
million in the third quarter of 2021 and the final payment of £0.8m in the
first half of this financial year supporting these positive results, giving a
net cash position of £9.9 million at the period end.
On a reported basis, the results include the impact of the amortisation of
acquired intangibles, and on an adjusted basis to remove the impact of these
items, adjusted EBITDA of £8.1 million (HY21: £7.6 million) is ahead by 6.6%
against 2021. This was at a reduced adjusted EBITDA margin of 23.8%,
reflecting the impact of the volatile utility cost environment and the very
strong comparator in the first half of 2021 of 25.4%.
After a tax charge of £1.2 million (HY21: £1.2 million), the Group recorded
a profit for the period after tax of £4.4m (HY21: £3.9 million). The tax
rate of 21% (HY21: 23%) reflects our expected effective Group tax rate for the
full year, which is a 2% reduction on 2021 as that period included the impact
from the adjustment of the Group's net deferred tax liabilities following the
change announced in the 2021 Budget that will increase the standard rate
of UK corporation tax from 19% to 25% effective from 1 April 2023.
Basic earnings per share increased by 12.6% to 4.64p (HY21: 4.12p).
The table below (Adjusted Performance measures) provides a clear
reconciliation of the adjusted performance to the reported numbers.
Adjusted performance measures:
Half year to Half year to Change Year ended
30 June 30 June 2021 31 December 2021
2022
£000 £000 £000
Operating profit 5,664 5,151 9.6% 9,920
Adjustments:
Amortisation of acquired intangibles 567 584 1,198
Adjusted operating profit 6,231 5,735 8.8% 11,118
Depreciation 1,848 1,908 3,583
Adjusted EBITDA 8,079 7,643 6.6% 14,701
Finance costs (93) (131) (223)
Depreciation (1,848) (1,908) (3,583)
Adjusted profit before taxation 6,138 5,604 8.9% 10,895
Basic earnings per share 4.64p 4.12p 12.6% 6.50p
Adjusted basic earnings per share (a) 5.12p 4.74p 8.0% 9.33p
(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 2022 was £8.0
million, compared to £6.7 million for the same period in 2021, again
benefiting from the strong six months of trading performance and continued
focus and success in managing our working capital efficiency. As a result,
operating cash conversion from adjusted EBITDA was 98.8% compared to 88.2% in
2021, and we are proud of the underlying fundamental cash generating ability
of the business.
Half year to Half year to
30 June 2022 30 June 2021
Net cash generated from operations £8.0m £6.7m
Tax paid (£1.3m) (£1.1m)
Interest paid (£0.1m) (£0.1m)
Purchase of property, plant and equipment (£1.7m) (£2.0m)
Debt repaid (£0.8m) (£0.8m)
Own shares acquired (£1.2m) -
Lease payments (£0.4m) (£0.2m)
Dividend paid (£0.9m) -
Other (£0.1m) -
Net increase in cash and cash equivalents £1.5m £2.5m
Net cash/(debt) £9.9m £4.1m
At the half year the Group had net cash of £9.9 million (HY21: £4.1m,
comprising cash of £14.8 million less bank debt of £10.7 million).
Our characteristic strong operating cash generation, cash position and undrawn
Sterling and Euro denominated bank facility of £20 million provides the
Group with considerable financial resilience and flexibility to pursue
strategic investments and acquisition opportunities in the future.
Importantly, any such opportunities would need to meet our commercial and
financial criteria, complement the existing portfolio and not impact our
ability to maintain our progressive dividend policy.
Our long-term policy is to maintain a strong financial position and keep the
ratio of net debt to adjusted EBITDA comfortably under two times.
Property, plant and equipment
Capital expenditure in the first half of the current financial year highlights
our commitment and ability to deliver incremental improvements to our existing
manufacturing output and operational efficiency. The principal expenditure was
focused on the completion of our kiln drying capacity at Carlton which will
support ongoing production efficiency at this key site. Alongside, we have
invested in our clamp kilns at Freshfield Lane to improve operational
efficiency. Additionally, whilst we completed the new road at Telford in 2021
to facilitate the release of the remaining mineral reserves at Blockleys to
support the long-term operations, we have completed some ancillary drainage
works to enable the release of some of the land for alternative use; selling
surplus investment land remains an important pillar of our lifetime revenue
sources.
Sustainability
Following the successful launch in 2021 of our Sustainability Report and road
map to achieving carbon neutrality we have been focused on delivery against
that strategy. At the start of the year, we were delighted to appoint a new
role, from within the Group, with specific responsibility to deliver
measurable progress on this singularly important objective for the Group to
achieving net zero by 2050.
During the period we were pleased to win a competitive process to partner with
the UK Government on a research project investigating the potential use of
hydrogen fuel in the brick manufacturing process. The research and development
project will continue into 2023 and demonstrates our commitment to investigate
a broad range of opportunities to continue to lead as the sustainable face of
clay brick manufacturing. Alongside, during the second half we will add
further capacity to our solar farm on our site in Floren which will deliver
over 50% of our electricity requirements for that site from the start of 2023.
We have also launched two further solar projects in the UK as we look to
expand our solar capacity and build on our pipeline of capital projects into
2023 and beyond that will continue to deliver positive incremental changes in
support of our core focus on achieving the Group's sustainability ambitions.
Dividend
The Board declared a final dividend in respect of 2021 of 2.50 pence per
ordinary share to shareholders. The dividend was approved by shareholders at
the AGM on 12 May 2022 and as a result the liability for the dividend payment
was accrued in the 30 June 2022 interim accounts with the £2.4m payment made
after the half year end on 13 July 2022.
Reflecting our fundamental belief and commitment in maintaining the importance
of our dividend policy and alongside our confident outlook for the business,
the Board has declared an interim dividend of 1.30 pence per ordinary share
(30 June 2021: 1.15pps). The dividend will be paid on 12 January 2023 to
members on the register on 2 December 2022 and is not accrued in the June 30
2022 interim accounts. With this interim declaration, the Board is maintaining
its guiding 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
Following the strong first half, and with resilient order intake and a
well-balanced forward order book covering a broad range of end markets, we are
well placed to continue our positive trading in the second half.
The Group has continued to see order intake in line with our forecast
expectations since the start of the second half . Whilst there is a more
cautious sentiment in the construction sector, diversification across RMI,
housing, commercial, social and specification projects underpins our resilient
outlook.
The ongoing elevated inflation rate and unpredictable energy costs present a
more challenging environment. However, we have remained focused on mitigating
risks to our input costs as well as maintaining appropriate portfolio pricing,
and in collaboration with our customers we introduced our standard timetabled
price increase at the start of July 2022.
Our consistent ability to deliver sustainable operational cash generation
underpins our liquidity position at the half year. Combining this with the
undrawn borrowing facility provides the Group with both considerable financial
resilience and flexibility to pursue future strategic investments and
potential acquisition opportunities. Importantly, these would need to meet our
commercial and financial criteria and complement the existing portfolio.
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 the resilient demand from the specification, housing, repair
maintenance and improvement and commercial sectors. Despite the ongoing
uncertain macroeconomic conditions and construction sector sentiment, the
quality fundamentals in our business provide resilience and underpin our
outlook and as a result give us confidence for the second half and beyond.
Frank Hanna and Peter Sharp
Joint Chief Executive Officers
Consolidated Income Statement
6 months 6 months 12 months
ended 30 ended 30 ended 31
June June December
2022 2021 2021
£'000 £'000 £'000
Unaudited Unaudited Audited
Revenue 33,988 29,935 59,524
Cost of sales (21,188) (17,902) (35,369)
Gross profit 12,800 12,033 24,155
Administration expenses (6,600) (6,590) (13,398)
Amortisation of acquired intangibles (567) (584) (1,198)
(7,167) (7,174) (14,596)
Other income 31 292 361
Operating profit 5,664 5,151 9,920
Finance expense (93) (131) (223)
Profit before taxation 5,571 5,020 9,697
Taxation (1,170) (1,151) (3,568)
Profit for the period 4,401 3,869 6,129
Basic earnings per share attributable to the equity holders of the 4.64 p 4.12 p 6.50 p
company
Diluted earnings per share attributable to the equity holders of the 4.50 p 3.87 p 6.27 p
company
.
Consolidated Statement of Comprehensive Income
6 months 6 months 12 months
ended ended ended
30 June 30 June 31 December
2022 2021 2021
£'000 £'000 £'000
Unaudited Unaudited Audited
Profit for the financial period 4,401 3,869 6,129
Other comprehensive income/(expense)
Items which may subsequently be reclassified to profit or loss
Currency movements (236) (193) (216)
Items which will not subsequently be reclassified to profit or loss
Revaluation deficit of property, plant and equipment - - (2,855)
Revaluation surplus of property, plant & equipment - - 4,125
Tax credit on exercise of options - - 274
Deferred tax on revalued assets - (2,053) (1,404)
(236) (2,246) (76)
Total comprehensive income for the financial period 4,165 1,623 6,053
Consolidated Balance Sheet
As at As at As at
30 June 2022 30 June 2021 31 December 2021
£'000 £'000 £'000
Unaudited Unaudited Audited
Assets
Non-current assets
Intangible assets 19,655 20,815 20,222
Property, plant and equipment 63,738 61,321 63,205
83,393 82,136 83,427
Current assets
Inventories 9,031 9,243 10,060
Trade and other receivables 12,026 11,939 10,551
Corporation tax receivable 272 - 190
Cash and cash equivalents 9,926 14,758 8,467
Total current assets 31,255 35,940 29,268
Total assets 114,648 118,076 112,695
Liabilities
Current liabilities
Trade and other payables 13,869 12,966 11,636
Interest bearing borrowings - 906 143
Lease liabilities 401 192 491
Corporation tax payable - 14 -
Total current liabilities 14,270 14,078 12,270
5,420 5,420
Non-current liabilities
Interest bearing borrowings - 9,783 642
Lease liabilities 523 329 117
Deferred tax liabilities 14,542 13,972 14,542
15,065 24,084 15,301
Total liabilities 29,335 38,162 27,571
Net assets 85,313 79,914 85,124
Equity attributable to equity holders
Share capital 19,178 18,789 19,127
Share premium account 16,724 15,827 16,536
Other reserves 21,967 20,324 21,763
Retained earnings 27,444 24,974 27,698
Total equity 85,313 79,914 85,124
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 2021 18,789 15,827 21,581 23,454 79,651
Profit for the period - - - 3,869 3,869
Currency difference - - (193) - (193)
Deferred tax on revalued assets - - (2,053) - (2,053)
Total comprehensive income - - (2,246) 3,869 1,623
Total comprehensive income
Transactions with owners:
Share based payment - - 523 - 523
Dividends payable - - - (2,349) (2,349)
Scrip dividend payable - - 466 - 466
As at 30 June 2021 18,789 15,827 20,324 24,974 79,914
Profit for the period - - - 2,260 2,260
Currency difference - - (23) - (23)
Revaluation deficit - - (2,855) - (2,855)
Revaluation surplus - - 4,125 - 4,125
Tax credit on exercise of options - - 274 - 274
Deferred tax on revalued assets - - 649 - 649
Total comprehensive income - 2,170 2,260 4,430
-
Transactions with owners:
Shares issued in the period 114 307 - - 421
Share based payment - - 359 - 359
Release on maturity of options 160 - (624) 464 -
Transfer between reserves 64 402 (466) - -
As at 31 December 2021 19,127 16,536 21,763 27,698 85,124
2,212
Profit for the period - - - 4,401 4,401
Currency difference - - (236) - (236)
Total comprehensive income - (236) 4,401 4,165
-
Transactions with owners:
Shares issued in the period 8 23 - - 31
Share based payment - - 508 - 508
Released on maturity of options 13 - (68) 55 -
Own shares acquired - - - (1,240) (1,240)
Dividends paid 30 165 - (1,100) (905)
Dividends payable - - - (2,370) (2,370)
As at 30 June 2022 19,178 16,724 21,967 27,444 85,313
Consolidated Statement of Cash Flows
6 months 6 months 12 months
ended ended ended
30 June 30 June 31 December
2022 2021 2021
£'000 £'000 £'000
Unaudited Unaudited Audited
Net cash generated by operations 8,003 6,741 15,821
Taxation paid (1,252) (1,121) (2,250)
Net cash generated by operating activities 6,751 5,620 13,571
Cash flows from investing activities
Purchase of property, plant and equipment (1,682) (1,973) (4,228)
Net cash used in investing activities (1,682) (1,973) (4,228)
Cash flows from financing activities
Interest paid (93) (91) (223)
Repayment of interest bearing liabilities (785) (784) (10,688)
Lease payments (383) (257) (530)
Proceeds of share issue 31 - 421
Own shares acquired (1,240) - -
Dividends paid (905) - (1,883)
Net cash used in financing activities (3,375) (1,132) (12,903)
Net increase / (decrease) in cash and cash equivalents 1,694 2,515 (3,560)
Cash and cash equivalents at beginning of period 8,467 12,243 12,243
Foreign exchange differences (235) - (216)
Cash and cash equivalents at end of period 9,926 14,758 8,467
Cash and cash equivalents comprise:
Cash at bank and in hand 9,926 14,758 8,467
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 2022. 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 2021 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 2022 and 30 June
2021 is unaudited.
3. EARNINGS PER SHARE
The calculation of earnings per share is based on a profit of £4,401,000 (six
months ended 30 June 2021 -£3,869,000; 12 months ended 31 December
2021-£6,129,000) and 94,777,398 (at 30 June 2021 93,943,381 and 31 December
2021, 94,305,964) being the weighted average number of ordinary shares in
issue, excluding those held in the employee benefit trust.
Diluted
At 30 June 2022 there were 3,040,424 (June 2021: 5,999,547, and at 31 December
2021: 3,378,137) dilutive shares under option leading to 97,817,822 shares (30
June 2021: 99,942,928, and at 31 December 2021: 97,684,101) 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 2022 1,048,836 (six months ended 30 June 2021 - nil; 12 months
ended 31 December 2021 - nil) 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 2022 was £1.0m.
All 1,048,836 shares held by the EBT were acquired by the trust during the
period. No shares were used in the period to satisfy awards following the
vesting of shares relating to Company share incentive schemes.
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