REG - Michelmersh Brick - Half Year Results
05/09/2023 07:00
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RNS Number : 3228L Michelmersh Brick Holdings PLC 05 September 2023
5 September 2023
Michelmersh Brick Holdings PLC
("MBH", the "Company", or the "Group")
Half Year Results for the six months ended 30 June 2023
Positive first half performance and resilient outlook
Michelmersh Brick Holdings PLC (AIM: MBH), the specialist brick manufacturer
and brick-fabricator, is pleased to report its half year results for the six
months ended 30 June 2023.
Financial Highlights:
30 June 2023 30 June 2022 Change Organic change (2)
Statutory results
Revenue £42.0m £34.0m 23.5% 10.3%
Gross margin 36.9% 37.7% (0.8%) 0.2%
Operating profit £6.1m £5.7m 7.0% 5.3%
Profit before tax £6.1m £5.6m 8.9% 7.1%
Basic earnings per share 5.00p 4.64p 7.8% 6.2%
Cash from operations £7.6m £8.0m (5.0%) (6.5%)
Net cash £11.8m £9.9m 19.2% 14.1%
Dividend per share 1.50p 1.30p 15.4% -
Adjusted results*
Adjusted EBITDA(1) £8.7m £8.1m 7.4% 4.9%
Adjusted operating profit £6.8m £6.2m 9.7% 8.1%
Adjusted profit before tax £6.8m £6.1m 11.5% 9.8%
Adjusted earnings per share 5.73p 5.12p 11.9% 9.8%
Strategic and Operational Highlights:
· Positive first half of 2023, with resilient performance highlighting
benefits of our diverse end markets
· Strong opening order book underpinned first half performance, despite
sector wide c.25% decline in brick volume demand driven by continuing elevated
inflation and uncertain interest rate outlook
· Continuing focus on collaboration with customers to deliver
appropriate portfolio pricing
· FabSpeed revenue included in Group results for the first time
following its acquisition in November 2022 alongside strong organic
like-for-like performance
· Launch of SustainableBrick.com, a new website that highlights the
benefits of clay brick to our broad customer base
· Careful management of input costs on a risk-based approach, with
energy costs continuing to be hedged in uncertain markets and investment in
solar at plants to supplement longer term energy requirement
· Group cash of £11.8 million and undrawn £20 million borrowing
facility underpins financial resilience and flexibility to pursue a balanced
capital allocation policy and further acquisition opportunities
· Declaration of interim dividend of 1.50 pence (+15% on H122)
underlines the Board's confidence in the outlook of the business and its
commitment to progressive returns for shareholders
Outlook
· Focus on maintaining a well-balanced forward order book and
appropriate pricing expected to support resilient demand across our diverse
end market customer base and keep us on track to meet full year expectations
Commenting on the results, Martin Warner, Chairman of Michelmersh Brick
Holdings PLC, said:
"The Group has delivered a positive first half performance despite a
challenging macroeconomic backdrop which has impacted the construction
industry significantly and in turn some of our end markets. Our first half
performance has benefitted from a well-balanced order book and our diverse end
markets and we will continue to prioritise appropriate portfolio pricing to
support demand from our customers.
"Whilst the brick market has been impacted by lower consumer confidence, we
continue to focus on delivering an excellent product and customer service,
while proactively managing our input costs appropriately. Backed by 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
(2) Organic change presents a percentage comparison year on year excluding the
impact of the results of FabSpeed which was acquired on 24 November 2022.
An analyst briefing will be held at 09:00am 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 Friday 08 September at 10:00am. Those wishing to join
the presentation are requested to register via the following link: Meeting
Registration.
(https://docs.google.com/forms/d/e/1FAIpQLSfJKAdhHP0IsQhJMGiwo3uslPnXVvAZc8O8Xs2BGZWGw8gQwQ/viewform?usp=sf_link)
Michelmersh Brick Holdings PLC Tel: +44 (0) 1825 430 412
Peter Sharp, Joint Chief Executive Officer
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
Harry Pardoe
Berenberg (Joint Broker) Tel: +44 (0) 20 3207 7800
Richard Bootle
Detlir Elezi
Yasmina Benchekroun
Yellow Jersey PR Tel: +44 (0) 7747 788 221
Charles Goodwin Tel: +44 (0) 7775 194 357
Annabelle Wills
About Michelmersh Brick Holdings PLC:
Michelmersh Brick Holdings PLC is a business with seven market leading brands:
Blockleys, Carlton, FabSpeed, Freshfield Lane, Michelmersh, Floren.be and
Hathern Terra Cotta. These divisions operate within a fully integrated
business, combining the production of premium, precision-made bricks, pavers,
special shaped bricks, bespoke Terra Cotta products and prefabricated brick
components. 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 122 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) , www.bimbricks.com (http://www.bimbricks.com) and
www.sustainablebrick.com (http://www.sustainablebrick.com/)
Joint Chief Executive Officers' Statement
We are pleased to report on a positive start to our 2023 financial year and
provide details on further progress against our strategic objectives. These
half year results have been achieved despite a very challenging environment
across the construction industry with elevated inflation rates creating
significant uncertainty in the trajectory of future interest rates, which is
weighing on consumer demand across our key markets.
Despite the current headwinds, the fundamentals in our end markets remain
positive with a critical shortage of both new residential and social housing,
a significant legacy housing inventory constructed with brick facades
underpinning future Repairs, Maintenance and Improvement ("RMI") demand
together with requirements for specification and brick-cladding remedial
solutions. Furthermore, all three major political parties remain committed to
reversing the decades long decline in housing formations. Our strategic
approach remains focused on targeting our broad product portfolio to address a
balanced demand across each of these segments and in our view this underpins
the resilience of our business as we focus on continuing to deliver earnings
growth and returns for shareholders. The longevity and depth of our customer
relationships support this approach and we are focused on maintaining our
partnerships by delivering an excellent product and service.
Our fundamental core competency remains our significant strength in the
premium end of the brick market in the UK and Benelux markets. We view the
long-term fundamentals of these markets as 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. Demand for
bricks across the sector has declined over the last six months in line with
the more negative consumer environment. Consequently, brick inventory volumes
for the sector are above the five-year average of c.450 million. However, our
ability to address the market's broad spectrum allows us to maintain a
resilient outlook.
The Group continues to focus on manufacturing and delivering the highest
quality brick products to our diverse end market customer base. This focus on
quality, together with our balanced average selling prices and focus on
consistently selling all the products we make, underpins our confidence in the
Group's future earnings growth.
The Group's operational cash generation continues to give us the confidence to
follow a balanced capital allocation strategy, with us continuing to invest in
projects that address our strategic objectives to improve the sustainability
of our manufacturing operations and support ongoing improvements in production
efficiency. We remain committed to our progressive dividend policy and the
declaration of an increased interim dividend underlines our confidence in the
outlook for the business. All of this leaves us well-positioned to deliver
further progress in the second half of 2023 and beyond.
Group Results
Financial Highlights
Half year to Half year to
30 June 2023 30 June 2022 Change
Revenue £42.0m £34.0m 23.5%
Gross margin 36.9% 37.7% (0.8%)
Adjusted* EBITDA(1) £8.7m £8.1m 7.4%
Adjusted* operating profit £6.8m £6.2m 9.7%
Operating profit £6.1m £5.7m 7.0%
Adjusted* profit before tax £6.8m £6.1m 11.5%
Profit before tax £6.1m £5.6m 8.9%
Adjusted* basic earnings per share 5.73p 5.12p 11.9%
Basic earnings per share 5.00p 4.64p 7.8%
Dividend per share 1.50p 1.30p 15.4%
(*)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 resilient trading performance in the business, the Group
has delivered robust growth and a positive set of half year results. The 2023
half year results include the positive impact of FabSpeed, our pre-fabricated
building product acquisition in November 2022, and for comparison purposes, we
include like-for-like narrative to remove this one-off benefit on our key
financial metrics.
Revenue for the six months increased by 23.5% to £42.0 million (HY22: £34.0
million) over the equivalent period in 2022. Removing the impact of FabSpeed,
revenue increased by 10.3% and the strong performance over the first six
months was predominantly due to the price increase implemented across the
portfolio from the start of the period, as we continued to offset the increase
in our input costs, whilst importantly focusing on maintaining production
volumes in line with our expectations as we look to deliver maximum
operational leverage from our broader manufacturing base.
As a result of the strong revenue growth, operating profit of £6.1 million
was up 7.0% on the comparative 2022 period (HY22: £5.7 million) and profit
before tax of £6.1 million was up 8.9% (HY22: £5.6 million). On a
like-for-like basis removing FabSpeed these increases were 5.3% and 7.1%
respectively. The lower contribution from FabSpeed to our profit performance
reflected a number of one-off initiatives we facilitated in the first half, as
we moved swiftly to embed our operational processes and procedures across the
four acquired operational sites. Consequently, we expect FabSpeed to
contribute profits in line with our expectations from the start of the second
half of the year, following the conclusion of these process implementations.
Following nearly two years of significant cost base volatility we have
continued to manage our input costs. As such, we have again secured over 90%
of our energy requirements for 2023. Energy contracts are also in place for
70% of our expected requirements in 2024 with further contracts into 2025 and
2026 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 through our ability to deliver a greater
degree of pricing visibility.
On a reported basis, the results include the impact of the amortisation of
acquired intangibles. On an adjusted basis, to remove the impact of these
items, adjusted EBITDA of £8.7 million (HY22: £8.1 million) is ahead by 7.4%
against 2022 and 4.9% on a like-for-like basis. As we highlighted in our 2022
year end results, this was at a reduced adjusted EBITDA margin of 20.8% (HY22:
23.8%), reflecting the importance of the partnership with our customers as we
balance our financial performance and focus on earnings growth alongside the
necessity to secure robust forward demand in our core markets.
After a tax charge of £1.4 million (HY22: £1.2 million), the Group recorded
a profit for the period after tax of £4.7 million (HY22: £4.4 million). The
tax rate of 23.5% (HY22: 21%) reflects our expected effective Group tax rate
for the full year, which is a 2.5% increase on 2022 following the change
announced in the 2021 Budget and ratified by parliament which increased the
standard rate of UK corporation tax from 19% to 25% effective from 1 April
2023.
Basic earnings per share increased by 7.8% to 5.00p (HY22: 4.64p).
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 2022 31 December 2022
2023
£000 £000 £000
Operating profit 6,079 5,664 7.0% 11,609
Adjustments:
Amortisation of acquired intangibles 684 567 1,133
Adjusted operating profit 6,763 6,231 9.7% 12,742
Depreciation 1,968 1,848 3,915
Adjusted EBITDA 8,731 8,079 7.4% 16,657
Finance income/(expense) 33 (93) (214)
Depreciation (1,968) (1,848) (3,915)
Adjusted profit before taxation 6,796 6,138 11.5% 12,528
Basic earnings per share 5.00p 4.64p 7.8% 9.41p
Adjusted basic earnings per share (a) 5.73p 5.12p 11.9% 10.61p
(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 2023 was £7.6
million, compared to £8.0 million for the same period in 2022. As a result,
operating cash conversion from adjusted EBITDA was healthy at 87.3% compared
to 98.8% in 2022, and the underlying fundamental cash-generating ability of
the business continues to provide us with real financial flexibility.
Half year to Half year to
30 June 2023 30 June 2022
Net cash generated from operations £7.6m £8.0m
Tax paid (£1.2m) (£1.3m)
Interest paid - (£0.1m)
Purchase of property, plant and equipment (£2.2m) (£1.7m)
Proceeds from sale of land £1.1m -
Debt repaid - (£0.8m)
Own shares acquired (£1.0m) (£1.2m)
Settlement for cancelled share options (£1.8m) -
Lease payments (£0.3m) (£0.4m)
Dividend paid (£1.2m) (£0.9m)
Other (£0.1m) (£0.1m)
Net increase in cash and cash equivalents £0.9m £1.5m
Net cash £11.8m £9.9m
At the half year the Group had cash of £11.8 million (HY22: £9.9 million).
Our characteristically 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 a
balanced capital allocation policy and further acquisition opportunities. It
is testament to the quality of the business that we completed the initial
£6.4 million cash consideration payment of FabSpeed in November 2022 and
ended the period ahead of our June 2022 comparison period.
Property, plant and equipment and land sale
As shown in our FY2022 results, our capital expenditure in the first half of
the current financial year highlights our broader focus on delivering
technically feasible sustainability improvements. The principal expenditure
was focused on Floren where we have completed the construction of a building
to house automated robot pallet mixing equipment and utilised the roof to add
additional solar capacity which now collectively provides over 50% of our
electricity needs. Given the proven success in Floren, we applied for a G99
Connection through the National Grid to add solar panels to Blockleys, which
we received during the first half and started work on adding the solar panels
which we will complete this year. Alongside, we continued our programme of
planned roll-outs to electrify our fork-lift fleet which during the first half
focused on Michelmersh.
Additionally, over the last few years we have focused on preparing non-core
land at Blockleys ahead of its release for alternative use. The sale of
surplus investment land remains an important pillar of our lifetime revenue
sources. During the first half we received £1.1 million from the sale of this
surplus land with the price agreed under the terms of a legacy option
agreement. The land had previously been valued at the option price so the sale
was released at our balance sheet carrying value with no one-off impact to the
earnings statement.
Purchase of own shares and share option cancellation
At the end of 2022, we announced a share buyback programme to reduce the share
capital of the Group to return value to shareholders. The scheme continues to
run with a maximum aggregated consideration of £3.0 million of which £1.0
million had been spent up to the end of the period purchasing 1,112,000
shares. The shares continue to be held as treasury shares.
Alongside the buy-back programme, we continue to prioritise the future
expected returns of shareholders by focusing on the volume of our issued share
capital. As a result, 2.0 million 2017 LTIP options were cancelled in November
2022 and converted to a cash settlement. The cash settlement value of £1.8
million was paid in the first half which included all associated employment
tax obligations.
Sustainability
The Group believes it is strategically integral for it to be a senior
representative of clay brick manufacturing and champion the carbon benefits of
utilising our product portfolio in the built environments of the UK and
northern Europe. As we highlighted in the ESG section of our 2022 Annual
Report, for the Group this will always be focused on incremental improvements
as we collaborate with our partners to both develop and adopt the technical
solutions that will support the outlined targets in our 2021 Sustainability
Report.
Given our focus on championing the sustainability of our portfolio we were
delighted to launch SustainableBrick.com (https://www.sustainablebrick.com/)
, a new website that highlights the benefits of clay brick to our broad range
of end customers. This information resource aims to reinforce to architects,
the evolution and investment the industry is making towards innovative
sustainability related improvements whilst showcasing the sustainable benefits
of clay brick. The site is also targeted at the construction industry drawing
out the many carbon calculation resources available to aid the sector in
collectively and collaboratively achieving net zero. Through the products and
initiatives showcased throughout the website we hope to lead the way in
sustainable construction practices and illustrate how these can be adopted for
future generations.
Dividend
The Board recommended a final dividend in respect of 2022 of 2.95 pence per
ordinary share to shareholders. The dividend was approved by shareholders at
the AGM on 18 May 2023 and as a result the liability for the dividend payment
was accrued in the 30 June 2023 interim accounts with the £2.8m payment made
after the half year end on 12 July 2023.
Reflecting our fundamental belief and commitment to maintaining the importance
of our dividend policy, the Board has declared an interim dividend of 1.50
pence per ordinary share ("pps") (30 June 2022: 1.30pps). The dividend will be
paid on 11 January 2024 to members on the register on 1 December 2023 and is
not accrued in the 30 June 2023 interim accounts. The ex-dividend date will be
30 November 2023. 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 positive first half, maintaining a well-balanced forward order
book covering a broad range of end markets is fundamental as we look to
continue our progress in the second half.
Across the Group, current order intake remains supportive of our quality
forward order book underpinning our second half revenue expectations and this
is despite the negative and cautious sentiment in the construction sector. The
contraction in sector demand has given us the ability to adapt elements of our
production planning ensuring inventory volumes of core products enabling near
term order opportunity fullfilment. We are focused on continuing to diversify
across RMI, housing, commercial, social and specification projects and this
whole market strategy continues to underpin our resilient outlook.
Our active risk management of our cost base to mitigate ongoing volatility to
our input costs has supported our ability to maintain medium-term price
stability, and with the focus on partnerships and collaboration with our
customers we have not changed our portfolio pricing ahead of the second half
as we work to support and prioritise forward demand.
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 a balanced capital allocation strategy
as we focus on delivering value for our shareholders.
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 a robust demand from the specification, housing, RMI and
commercial sectors. With high inflation and an uncertain interest rate
environment we believe our broad brick and brick-fabrication portfolio
supports our ability to address the full breadth of our end markets and it is
these quality fundamentals in our business that 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
2023 2022 2022
£'000 £'000 £'000
Unaudited Unaudited Audited
Revenue 42,038 33,988 68,375
Cost of sales (26,535) (21,188) (41,463)
Gross profit 15,504 12,800 26,912
Administration expenses (8,776) (6,600) (14,225)
Amortisation of acquired intangibles (684) (567) (1,133)
(9,460) (7,167) (15,358)
Other income 35 31 55
Operating profit 6,079 5,664 11,609
Finance income/(expense) 33 (93) (214)
Profit before taxation 6,112 5,571 11,395
Taxation (1,436) (1,170) (2,518)
Profit for the period 4,676 4,401 8,877
Basic earnings per share attributable to the equity holders of the 5.00p 4.64 p 9.41 p
company
Diluted earnings per share attributable to the equity holders of the 4.86p 4.50 p 9.20 p
company
Consolidated Statement of Comprehensive Income
6 months 6 months 12 months
ended ended ended
30 June 30 June 31 December
2023 2022 2022
£'000 £'000 £'000
Unaudited Unaudited Audited
Profit for the financial period 4,676 4,401 8,877
Other comprehensive income/(expense)
Items which may subsequently be reclassified to profit or loss
Currency movements 280 (236) (257)
Items which will not subsequently be reclassified to profit or loss
Revaluation deficit of property, plant and equipment - - (1,115)
Revaluation surplus of property, plant & equipment - - 2,716
Tax credit on exercise of options - - 18
Deferred tax on revaluation movement - - (466)
280 (236) 896
Total comprehensive income for the financial period 4,956 4,165 9,773
Consolidated Balance Sheet
As at As at As at
30 June 2023 30 June 2022 31 December 2022
£'000 £'000 £'000
Unaudited Unaudited Audited
Assets
Non-current assets
Intangible assets 24,617 19,655 25,291
Property, plant and equipment 65,004 63,738 65,932
89,621 83,393 91,223
Current assets
Inventories 10,685 9,031 9,684
Trade and other receivables 15,380 12,026 11,801
Corporation tax receivable - 272 -
Cash and cash equivalents 11,794 9,926 10,598
Total current assets 37,859 31,255 32,083
Total assets 127,480 114,648 123,306
Liabilities
Current liabilities
Trade and other payables 19,752 13,869 15,860
Lease liabilities 493 401 761
Corporation tax payable 1,360 - 1,159
Total current liabilities 21,605 14,270 17,780
5,420 5,420
Non-current liabilities
Lease liabilities 581 523 523
Deferred tax liabilities 15,815 14,542 16,034
16,396 15,065 16,557
Total liabilities 38,001 29,335 34,337
Net assets 89,479 85,313 88,969
Equity attributable to equity holders
Share capital 19,181 19,178 19,181
Share premium account 16,724 16,724 16,724
Other reserves 22,229 21,967 21,435
Retained earnings 31,345 27,444 31,629
Total equity 89,479 85,313 88,969
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 2022 19,127 16,536 21,763 27,698 85,124
Profit for the period - - - 4,401 4,401
Currency difference - - (236) - (236)
Total comprehensive income - - (236) 4,401 4,165
Total comprehensive income
Shares issued in the period 8 23 - - 31
Share based payment - - 508 - 508
Released on maturity of options 13 - (68) 55 -
Purchase of own shares - - - (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
Profit for the period - - - 4,476 4,476
Currency difference - - (21) - (21)
Revaluation deficit - - (1,115) - (1,115)
Revaluation surplus - - 2,716 - 2,716
Tax credit on exercise of options - - 18 - 18
Deferred tax on revaluation - - (466) - (466)
Total comprehensive income - - 1,132 4,476 5,608
-
Opening adjustment - - (10) - (10)
Share based payment - - 472 - 472
Purchase of own shares - - - (300) (300)
Release on maturity of options 3 - (1,593) 10 (1,580)
Deferred tax on share options - - (533) - (533)
Dividend payable - - - 2,370 2,370
Dividend paid - - - (2,371) (2,371)
As at 31 December 2022 19,181 16,724 21,435 31,629 88,969
2,212
Profit for the period - - - 4,676 4,676
Currency difference - - 280 - 280
Total comprehensive income - - 280 4,676 4,956
-
Share based payment - - 548 - 548
Released on exercise of options - - (34) - (34)
Purchase of own shares - - - (967) (967)
Dividends paid - - - (1,229) (1,229)
Dividends payable - - - (2,764) (2,764)
As at 30 June 2023 19,181 16,724 22,229 31,345 89,479
Consolidated Statement of Cash Flows
6 months 6 months 12 months
ended ended ended
30 June 30 June 31 December
2023 2022 2022
£'000 £'000 £'000
Unaudited Unaudited Audited
Net cash generated by operations 7,596 8,003 19,649
Taxation paid (1,235) (1,252) (1,655)
Net cash generated by operating activities 6,361 6,751 17,994
Cash flows from investing activities
Purchase of property, plant and equipment (2,205) (1,682) (3,028)
Proceeds from sale of land 1,068 - -
Acquisition - - (6,073)
Net cash used in investing activities (1,137) (1,682) (9,101)
Net cash used in investing activities (1,004) (1,004) (227)
Cash flows from financing activities
Interest received/(paid) 33 (93) (214)
Repayment of interest bearing liabilities - (785) (785)
Lease payments (313) (383) (721)
Settlement for cancelled share options (1,798) - -
Proceeds of share issue - 31 31
Purchase of own shares (1,001) (1,240) (1,540)
Dividends paid (1,229) (905) (3,276)
Net cash used in financing activities (4,308) (3,375) (6,505)
Net increase in cash and cash equivalents 916 1,694 2,388
Cash and cash equivalents at beginning of period 10,598 8,467 8,467
Foreign exchange differences 280 (235) (257)
Cash and cash equivalents at end of period 11,794 9,926 10,598
Cash and cash equivalents comprise:
Cash at bank and in hand 11,794 9,926 10,598
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 2023. 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 2022 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 2023 and 30 June
2022 is unaudited.
3. EARNINGS PER SHARE
The calculation of earnings per share is based on a profit of £4,676,000 (six
months ended 30 June 2022 -£4,401,000; 12 months ended 31 December
2022-£8,877,000) and 93,516,114 (at 30 June 2022 94,777,398 and 31 December
2022, 94,467,688) being the weighted average number of ordinary shares in
issue, excluding those held in the employee benefit trust.
Diluted
At 30 June 2023 there were 2,779,140 (June 2022: 3,040,424, and at 31 December
2022: 1,976,771) dilutive shares under option leading to 96,295,254 shares (30
June 2022: 97,817,822, and at 31 December 2022: 96,444,459) 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 2023 1,275,465 (six months ended 30 June 2022 - 1,048,836; 12
months ended 31 December 2022 - 1,335,114) 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 2023 was £1.2m
(six months ended 30 June 2022; £1.0m). All 1,275,465 shares held by the EBT
were acquired by the trust prior to the period and 59,649 shares were used in
the period to satisfy awards following the vesting of shares relating to
Company share incentive schemes.
Following the announcement of a share buyback programme, 1,112,000 shares had
been bought up to the 30 June 2023 and are held in treasury and excluded from
the weighted average share calculations and the dividends on these shares have
been waived.
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