REG - Michelmersh Brick - Preliminary results for the year ended 31 Dec 2025
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RNS Number : 7815X Michelmersh Brick Holdings PLC 24 March 2026
24 March 2026
Michelmersh Brick Holdings PLC
("MBH", the "Company", or the "Group")
Preliminary results for the year ended 31 December 2025
Performance impacted by broad external market conditions and the operational
improvements alongside delivery of capital allocation policy
Michelmersh Brick Holdings Plc (AIM: MBH), the specialist brick manufacturer,
reports its preliminary results for the year ended 31 December 2025.
Financial Highlights:
31 Dec 2025 31 Dec 2024 Change
Statutory results
Revenue £68.9m £70.1m (1.7%)
Gross margin 34.5% 35.8% (1.3%)
Operating profit £4.7m £8.2m (42.7%)
Profit before tax £4.3m £8.0m (46.3%)
Basic earnings per share 4.02p 6.59p (39.0%)
Cash from operations £10.9m £10.2m 6.9%
Net (debt)/cash (£0.7m) £6.0m Down £6.7m
Dividend per share 4.60p 4.60p -
Adjusted results*
Adjusted EBITDA(1) £12.4m £14.0m (11.4%)
Adjusted operating profit £8.4m £10.1m (16.8%)
Adjusted profit before tax £8.1m £9.9m (18.2%)
Adjusted earnings per share 7.50p 8.18p (8.3%)
Financial, Strategic and Operational Highlights:
Financial performance
· Group revenue down 1.7%, reflecting a robust 2025 UK brick sales performance
mitigating challenging markets in Europe and the impact from our continued
strategic integration of FabSpeed
· Adjusted operating profit of £8.4 million, down 16.8%, and adjusted profit
before tax of £8.1 million, down 18.2%, due to timing of capital improvement
activities, interruption caused to production through the relocation and
closure of Watlington site, and market challenges in the UK and in Europe
· Low single digit increase in UK brick despatch volumes in line with management
expectations
· Order intake tracked ahead of normalised manufacturing volumes albeit with
inconsistent call off rates, highlighting customer uncertainty
· Challenging market conditions in Belgium with housing activity approximately
40% below 2022, leading to a significant drop in revenue, despatches and
profit in Floren
· Stable UK market share from FY24 demonstrating the quality and customer reach
of our products
· Increase in overall UK sector brick production volumes over the prior year
resulted in a highly competitive pricing environment
· Active management of input costs on a risk-based approach, with energy costs
hedged through FY25 and beyond
· Strong balance sheet maintained despite ongoing challenging markets, with £20
million borrowing facility underpinning financial resilience and flexibility
to pursue a balanced capital allocation policy
Operational re-organisation
· Strategic review of pre-fabricated portfolio led to the integration of
activities onto our freehold brick sites and relocation of pre-fabricated
production lines
· Exit of subscale specialist clay offering through wind down of Hathern Terra
Cotta brand
Continued delivery of capital allocation policy
· Proactive management of our capital improvement programme with £5.6 million
invested in site enhancements and efficiency improvements across our
manufacturing base
· £2 million of buybacks executed in the year, contributing to a c. 7%
reduction in EPS dilution over the last three years through capital
repurchasing activities
· Final dividend per share proposed of 3.00p resulting in full year dividend of
4.60p (in line with 2024), underlining the Board's confidence in the strategic
outlook of the business and its focus on the importance of returns for
shareholders
Outlook
· Order intake volumes running ahead of manufacturing capacity at the start of
2026 but confidence and predictability from our order intake levels have been
diluted over the last 12 months
· Anticipate challenging pricing environment to continue with sector production
volumes remaining ahead of despatch volumes
· Whilst these headwinds create a challenging trading environment, the Directors
are confident that the Company will deliver growth in 2026 relative to 2025
· Strength of balance sheet and operational cash flow generation enabling
continued pursuit of a balanced capital allocation policy to drive returns to
shareholders
· Medium-term fundamental market drivers remain encouraging with the business
well positioned for a market recovery when sustained momentum returns to our
end markets
Board Changes
· Rachel Warren is stepping down from the Group Board with
immediate effect due to personal reasons and will be leaving the Company in
May 2026 prior to the AGM and following a hand over of her duties as CFO. Ryan
Mahoney, CEO, will assume the responsibilities of CFO on an interim basis,
reassuming the roles and responsibilities he carried out for the majority of
2025 supported by an experienced wider leadership team. Ryan previously held
the role of CFO between 2021 and 2025.
Commenting on the results, Tony Morris, Chair of Michelmersh Brick Holdings
PLC, said:
"Broader UK brick despatches started 2025 with a positive year on year
trajectory but this developing momentum was undermined by the uncertainty
regarding potential UK budget policy announcements in the second half,
highlighting the cautious sentiment that remains in our sector. Despite this,
the Group held market share and we were pleased to see an improvement in our
despatch volumes broadly in line with the wider sector. We continue to focus
on the provision of a broad range of premium brick and pre-fabricated products
and believe this is the right strategy to address our competitive end markets
both domestically and through imported products.
"Adhering to our capital allocation strategy has remained our core focus with
significant investment made into our facilities to improve production
efficiency, delivering our integration plans for our pre-fabricated operations
moving onto our freehold sites, balanced with returning value to our
shareholders through buybacks and dividends. We believe our strategic
investments will deliver value for the Group as we look into 2026. Last year,
we saw a longer shutdown at Carlton and the impact of relocating our
pre-fabricated operations away from Watlington, which combined to negatively
impact our FY25 profit metrics.
"We enter the new financial year with continued uncertainty around momentum in
the wider UK construction industry and Belgium brick markets. Consumers remain
cautious with affordability considerations and interest rate levels affecting
their confidence to move or improve their homes and as a result the expected
timeline for a market recovery continues to be uncertain. Notwithstanding
this, we believe we have the right strategy, with a strong balance sheet, and
with the investments in our facilities and operations during the year, we are
well positioned for continued progression in 2026.
Separately, we would like to thank Rachel for her contribution to the Company
and wish her well for the future."
(*) The Directors believe that adjusted measures provide a more useful
comparison of business trends and performance. Adjusted results exclude
exceptional items, costs associated with acquisitions and aborted corporate
transactions, 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 these reported results in the Chief Executive Officer's Statement below.
(1) EBITDA is defined as earnings before interest, tax, depreciation and
amortisation.
An analyst briefing will be held virtually at 09:30am today. To attend, please
email michelmersh@almastrategic.com (mailto:michelmersh@almastrategic.com) .
The Company also notes that it will be hosting an online presentation
to retail investors today at 04:00pm. Those wishing to join the presentation
are requested to register via the following link:
https://engageinvestor.news/MBH_IP2026
Michelmersh Brick Holdings PLC Tel: +44 (0) 1825 430 412
Ryan Mahoney, Chief Executive Officer
Canaccord Genuity Limited (NOMAD and Broker) Tel: +44 (0) 20 7523 8000
Max Hartley
Bobbie Hilliam
Harry Pardoe
Alma Strategic Communications Tel: +44 (0) 20 3405 0205
Andrew Jaques michelmersh@almastrategic.com (mailto:michelmersh@almastrategic.com)
Sam Modlin
Kinvara Verdon
Louisa El-Ahwal
About Michelmersh Brick Holdings PLC:
Michelmersh Brick Holdings PLC is a business with six market leading brands:
Blockleys, Carlton, FabSpeed, Freshfield Lane, Michelmersh and Floren.be.
These divisions operate within a fully integrated business, combining the
production of premium, precision-made bricks, pavers, special shaped bricks
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 120 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/)
Chief Executive Officer's Statement
Navigating market uncertainty while investing for long‑term growth
The Group's 2025 results have been delivered in what remained a very
challenging environment across the construction industry both in the UK and in
Belgium. The caution and uncertainty inherent in consumers, which is weighing
on any consistent recovery in our end markets, continues to be impacted by the
overall economic environment. The catalysts for supporting any significant
improvements in market conditions remain uncertain, with no new Help to Buy
initiatives to alleviate affordability concerns and the cautious pace of
further reductions in interest rates, driven by persistent inflation, which
have in combination undermined consumer confidence and impacted demand for our
brick and pre-fabricated product portfolio. The year also saw historically low
planning approvals, particularly in London and the South East, with the
specific impact from the Building Safety Act and the Gateway 2 and 3
regulations, significantly impacting the recovery momentum in some of our key
markets, most noticeably in the architects, specifiers and developer space.
Given the trading backdrop the Group focused on delivering on our strategic
initiatives during the year with a significant capital investment programme
focused on site efficiency and integration activities whilst continuing to
manufacture high quality products and delivering a positive customer
experience. As ever, the Board is hugely grateful for the work and dedication
of all our people across the Group in delivering a full programme of change
management across our sites which we expect to deliver benefits for the Group
from the start of our new financial year.
The lack of any consistent positive momentum in the construction sector has
remained the key trading environment characteristic for the Group since June
2023 and the calendar brick despatch peak, in both the UK and Belgium, of our
2022 financial year. Despite this long downturn, we still believe that the
fundamentals in our end markets in the UK and Belgium remain positive. All of
the market data points inform our thinking that there is 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, and requirements for specification
and brick-cladding remedial solutions. In the UK, whilst the Government
targets and messaging have evolved over the last 18 months, informed by our
own interactions as well, we believe they remain committed to improving the
volume of housing formations before the Government exit this current
parliament in 2029. Likewise, in Belgium, the Government is targeting 70,000
new homes a year to reverse their critical housing shortages, of which
currently they remain about 40% below this key metric. As a result, our
strategic approach remains unchanged by focusing on targeting our broad
product portfolio to address a balanced demand across each of these market
segments. In our view this underpins the resilience of our business as we
focus on delivering returns for shareholders. We have always recognised the
importance of our relationships with our customers and we believe that these
deep associations support our business strategy. Maintaining these key
partnerships through the delivery of excellent products and services remains
central to our resilience.
Our fundamental core competency remains our significant strength in the
premium end of the brick market in the UK and Belgium. 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 remains c. 20% below the 2022 high point with the ongoing caution from
consumers continuing the long trough in activity levels. UK brick production
capacity has been gradually increased over the last twelve months in
anticipation of improving end markets and customer demand volumes. As a
result, brick production has been running ahead of despatch volumes throughout
the year and consequently inventory volumes for the sector are over the five
year average at c. 550 million. These market dynamics made pricing highly
competitive throughout the year and we will continue to watch with caution as
we move into the new year to see if the imbalance in supply and demand
continues given the fluctuating market conditions.
Broader portfolio bringing enhanced routes to market
We have been operating with a broader portfolio of clay bricks and clay
pre-fabricated products for the last three years and we firmly believe in the
strategic importance of off-site pre-fabricated manufacturing for the
construction industry. The expanded product offering of pre-fabrication has
brought us enhanced routes to market with a complementary customer base and
distribution channels. Equally, the decline in construction activity, which we
articulate through brick despatch volumes, has also brought challenges within
our pre-fabricated operations. As a result, we took the decision to accelerate
our integration plans for pre-fabrication with the decision to close our
leasehold site in Watlington with the relocation of all operations split
equally, south to Michelmersh, and north to Charnwood. We are delighted that
we have been able to repurpose vacant factory space at Michelmersh to
establish chimney and arch pre-fabrication on the site and this is working
very well alongside our continuing brick operations. The site renovation work
was completed in the summer and we are delighted with the quality of the
production operation and are very grateful to our people onsite. Charnwood was
already operating prefabricated operations in part of the facility so the
relocation supported the expansion of existing operations. Given the expansion
at Charnwood for pre-fabrication and following a period of strategic review
for our bespoke Hathern Terra Cotta range, we took the difficult decision to
cease operating the brand and to exit the market for this niche high quality
product range. Unfortunately, the level of commercial demand for the terra
cotta portfolio over the medium and long-term did not support any decision to
continue production operations but we are very grateful to the long and loyal
service of the Hathern team over many years and they left the Group with our
sincere gratitude.
Continued delivery of capital allocation policy
The Group's continued ability to generate operational cash underpins our
confidence to follow our capital allocation policy. This has enabled us to
invest in the projects that address our strategic objectives to improve the
sustainability of our manufacturing operations, support our integration plans
for our pre-fabricated portfolio and to support ongoing improvements in
production efficiency. We remain committed to the importance of returns to
shareholders through maintaining our attractive dividend ratio. The proposal
of the final dividend of 3.00p per share for the year underlines our
confidence in the outlook for the business. As we communicated at the start of
April, we have also supplemented our dividends with our share buyback
programme which completed in December with the original allocation of £2
million. The Board will continue this activity where it determines that it is
appropriate to do so to deliver value for shareholders and represents an
attractive investment opportunity for the Company. Balancing the returns for
our shareholders through dividends and buybacks alongside ensuring we maintain
well invested manufacturing sites are central to the Group's capital
allocation priorities. This strategy leaves us well-positioned to deliver
further progress and shareholder value as we move into our new financial year.
Board changes
Peter Sharp stood down from the Board as Chief Executive Officer in September
but we are delighted that Peter is staying with the business in his new role
as industry adviser to the Board. Peter had been on the Board since 2016 and
during that period the Company enjoyed significant growth and success with the
Group's annual brick output increasing from 70 million to over 120 million.
The portfolio was also broadened to include brick fabricated products and the
Company also entered the European market with Floren in 2019. Peter has worked
within the Clay industry for over 40 years so his extensive experience will
continue to be of great use to the Board and myself in his new position. Peter
has been a highly valued colleague and member of the Board and from a personal
perspective I have been very grateful for his support and advice over the last
four years since I joined the Company.
We announced in September that Rachel Warren joined the Board as our new Chief
Financial Officer from Wincanton, the former FTSE listed group. As announced
today, Rachel has resigned as a Director due to personal reasons and will be
leaving the business in May 2026. It was disappointing to make a change to our
Executive Team so soon after Rachel joining. It is critical that we continue
to challenge ourselves in making sure we have the right team in place to
support the delivery of the Group's strategic priorities.
Allied to this and with our continuous focus on ensuring that the Board has
the appropriate balance of skills and experience, we were therefore delighted
to announce that Darren Waters joined the Board from the start of November as
an Independent Non-Executive Director. Darren is a member of the audit and
nomination committees and from the start of January 2026 he was appointed as
Chair of the remuneration committee. Darren was the Chief Executive Officer of
Eurocell plc, the leading UK manufacturer and distributor of door and window
products to the trade. He was also formally the Chief Operating Officer in the
executive team at Ibstock plc, the building products business, where he was
responsible for sales and operations across the clay and concrete business.
Prior to Ibstock, Darren was CEO of Tyman Plc (UK and Ireland), the building
products manufacturer. Darren has significant industry experience as a
strategic leader in the building products sector which, alongside his
operational expertise focusing on ESG, health and safety, culture and
sustainable operations, will greatly assist the Group.
Following these Board changes during the year and post year end, we believe
that we have a team that is well placed with the right capabilities to support
the Group as we continue to deliver against our strategic objectives.
Sustainability
Sustainability remains central to the Group's strategy which helps to inform
our capital allocation priorities, our focus on operational performance and
our longer-term strategic objectives. During the year, the Group continued to
target reductions in our environmental footprint alongside a continuous focus
on our governance frameworks through maintaining a clear focus on
transparency, optimisation and the integrity of our ESG data. We have also
continued to monitor our progress against our seventeen non-financial ESG key
performance indicators disclosures which are aligned with the Group's
commitment to achieve net zero by 2050.
During 2025, the Group undertook a Double Materiality Assessment to validate
the alignment between our sustainability strategy, business priorities and ESG
key performance indicators. This process provided assurance that the Group is
prioritising the appropriate strategic objectives alongside looking to ensure
that our sustainability objectives continue to be reflected within our ESG
reporting and our Board decision-making.
As a manufacturing business, energy use and production efficiency represent a
significant proportion of our environmental impact. Accordingly, we have
continued to prioritise the quality, accuracy and independent assurance
through our Scope 1 and Scope 2 emissions data. This has supported improved
operational control and the identification of further production efficiency
opportunities and importantly more broadly we believe that the Group remains
on track to achieve our targeted reduction in energy intensity.
Underpinning our sustainability strategy this year has been a clear focus on a
continuous improvement programme of our data management and reporting
capabilities including the expanded use of real-time data capture and Power BI
reporting across our operational footprint. We believe that through focusing
on the quality and provision of our data management this will support
improvements in site efficiency and support our capital allocation decision
making across manufacturing, logistics and our support functions.
Product transparency remains a core component of the Group's sustainability
approach. Continued progress towards the publication of Life Cycle Assessments
and Environmental Product Declarations we believe will ultimately inform the
decision-making for our customers.
Building on this strengthened data foundation, the Group completed its first
Scope 3 greenhouse gas emissions calculation during 2025. While Scope 3
emissions represent a smaller proportion of the Group's overall footprint
compared to many organisations, this work provides increased visibility across
the value chain and supports a more complete and transparent understanding of
environmental impacts.
Fundamentally, our sustainability strategy remains embedded in accelerating
and defining a clear pipeline of major decarbonisation projects for
implementation over the next decade.
Awards and recognition
We were once again delighted that our diverse portfolio of clay products was
recognised in 2025 through our successes at the Brick Development Association
("BDA") industry awards. The 49(th) BDA awards saw the Group win four awards
and we excelled across the Refurbishment, Large Housing, Specialist Brickwork
and Commercial categories. The results highlight how our products have been
thoughtfully utilised in both contemporary architecture and the sensitive
restoration of historic buildings.
We were very pleased to receive the Architects' Choice Award, which remains a
prestigious category, given the importance of this market segment to the
Group. The importance of these types of award is that fundamentally it
provides a showcase of the Group's range of clay brick and clay pre-fabricated
products which are the ideal choice for specifiers and architects.
Also among our awards was recognition for one of the Group's standout
projects, Tileyard North in Wakefield, which was a project by Hawkins\Brown to
transform the former Rutland Mills into one of the UK's largest creative hubs
outside London. Through careful restoration the design celebrates the site's
industrial heritage while introducing new spaces for collaboration and
innovation. Blockleys Windermere Grey and Park Royal bricks were selected to
complement the mill's original construction of historic brickwork, seamlessly
blending the old and the new.
Further success came with Bulrush Court in London by Pitman Tozer Architects
using Floren Avorio in a large redevelopment as part of a 950 home development
scheme. This phase of the project included provision for 144 affordable homes
in a mid-rise mansion block together with public areas and commercial spaces.
Built with the community as its focus, the project was conceived as a city
block but with a people centric approach.
We were delighted to be among the projects selected by Swift Brickwork
Contractors as part of their submission for the Specialist Brickwork
Contractor Award. The company showcases innovation and sustainability and
their ideologies as a business align perfectly with our Group, as well as
their health and safety initiatives and approach to training being industry
benchmarks within the clay sector. The Bishops Stortford High School used
Freshfield Lanes Lindfield Yellow and Selected Dark bricks to create a unique
and contrasting façade between warm yellow bricks and elements of metalwork
and window trim.
The recognition reflects the dedication of our talented employees, the skill
of the architects and contractors we collaborate with, and the enduring
quality of our materials. These awards reaffirm our commitment to producing
sustainable, high-quality clay products that enrich the built environment and
demonstrate the beauty and diversity of the Group's brickmaking.
Charity
We continue to believe in the importance of our charitable commitments and
2025 represented another year in which we increased our charitable giving to
both local and national charities. Our people remain very engaged in how we
allocate our charitable support and we were very pleased with the response
from our colleagues at the beginning of the year with a total of fifteen
different charities receiving nominations for support this year. Following a
review, we selected the Lighthouse Construction and Band of Builders charities
as our two principal charities for the year with increased support not just in
monetary terms but in also through raising awareness for their charities
through social media and other platforms. Alongside the support for our two
principal charities we also allocated monetary donations to the other
nominated charities in recognition of the important work that they all
undertake in their annual activities.
Both the Lighthouse Construction and Band of Builders charities are focused on
the provision of support for construction workers in the areas around mental
health and we are acutely aware of the specific challenge our industry faces
in this area. As a business we take the issue of mental health very
seriously, not just for our colleagues, but also within the broader sector by
looking to support those charities who are doing incredible work through their
support for the construction sector specifically.
Again throughout 2025, in addition to the annual staff nominations, we also
supported numerous community events local to our manufacturing facilities as
well as donating to individual staff charity fundraisers throughout the year.
Supporting education
Supporting education and skills development remains a core element of the
Group's social strategy. During the year the Group donated 110,000 bricks in
support of vocational training and community initiatives across the UK under
our ongoing Pledge 100 initiative.
Alongside the product donations, we also provided further education colleges
with materials to support bricklaying and construction training programmes
which enabled over 1,200 students to develop practical, industry-relevant
skills using high-quality products. This continued investment reflects the
Group's long-standing commitment to addressing the well-documented skills
shortage within the construction sector and supporting the next generation to
enter our industry.
In addition to the more formalised educational support, the Group also
provided products to support local families and community-led youth clubs and
groups, helping to deliver practical improvements where financial resources
are often more constrained. These donations focused on initiatives that
provide safe, constructive environments for young people and support
communities located close to our manufacturing locations.
Through our ongoing commitment to education, skills development and community
support, the Group continues to deliver meaningful social value while
strengthening long-term resilience within the construction sector's broader
community.
Group Results
Financial Highlights
Year ended Year ended
31 Dec 2025 31 Dec 2024 Change
Revenue £68.9m £70.1m (1.7%)
Gross margin 34.5% 35.8% (1.3%)
Adjusted* EBITDA(1) £12.4m £14.0m (11.4%)
Adjusted* operating profit £8.4m £10.1m (16.8%)
Operating profit £4.7m £8.2m (42.7%)
Adjusted* profit before tax £8.1m £9.9m (18.2%)
Profit before tax £4.3m £8.0m (46.3%)
Adjusted* basic earnings per share 7.50p 8.18p (8.3%)
Basic earnings per share 4.02p 6.59p (39.0%)
Dividend per share 4.60p 4.60p -
(*)The Directors believe that adjusted measures provide a more useful
comparison of business trends and performance. Adjusted results exclude
exceptional items, costs associated with acquisitions and aborted corporate
transactions, 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 these reported results in the Chief Executive Officer's Statement below.
(1) EBITDA is defined as earnings before interest, tax, depreciation and
amortisation.
The lack of momentum and consistent demand within the construction market, the
timing of our capital improvement works, and our continued programme of phased
integration of our pre-fabrication business have combined to affect the
trading performance in the business in 2025, with the Group being impacted
across all of our profit metrics.
Revenue for the year declined by 1.7% to £68.9 million over the equivalent
year in 2024 (2024: £70.1 million) which was largely as a result of specific
trading challenges within our Floren and FabSpeed brands, with our brick UK
performance showing an improvement year on year. Taking the UK first, this
performance over the year included low single digit increases in our
despatches. At the same time, consistent with our approach to pricing for the
last two years, we continued to maintain stable portfolio pricing to support
diversity in our forward order book and this approach contributed to stable
average selling prices despite, what was, and remains a very competitive
pricing environment. On the continent, our Floren brand was significantly
impacted by the domestic macro market which was very challenging throughout
the year. The Belgium building permits granted in 2025 declined again during
the year and the broader market remains over a third below the levels from
2022. Since our acquisition of the site, Floren products have been well
recognised by architects and specifiers, particularly in London and the South
East, but unfortunately these established markets were equally challenged by
changes in planning. As a result, our Floren despatches and revenue were
significantly impacted with an approximate 20% decline in both metrics. Given
the dynamics of Floren's end markets we temporarily stopped production twice
during the year in Q1 and Q3 which facilitated planned and brought forward
capital improvement works. As with our other production pauses in the Group at
Carlton and Michelmersh at the start of the year, we prioritised our inventory
planning and manufacturing scheduling to try to ensure there was minimal
impact on the planned despatches across our Floren customer base in both the
UK and on the Continent.
The overall construction environment remains very challenging which we measure
through the sector wide UK brick despatches which are still some 20% below
their last peak in 2022. However, as we highlighted last year, we have not
seen this level of decline across the Group and we remain very focused on
maintaining our market share in this current environment. We see maintaining
our market position in our key end channels as an important indicator
reflecting the overall resilience of our business model. Our order intake
volumes remain a very important barometer for us and whilst we continue to see
intake ahead of normalised capacity it is important to highlight that it is
harder to predict the timing of call-offs than it has been previously. We know
that our customers remain enthusiastic about our portfolio and this reflects
the benefits of our product portfolio's broad reach and the strong customer
loyalty and distributor relationships we have across our end markets. Whilst
our order intake and order book remain very important to us, the visibility
and certainty that this has traditionally provided has been somewhat diluted
by the consistency of call-offs. As a result, we start 2026 remaining watchful
of our production volumes in the UK and Floren and remain ready for the
potential for further facility downtime in the short-term.
Due to the timing of our capital improvement activities, the interruption
caused to production through the relocation and closure of our Watlington
leasehold site, and more broadly the market challenges in the UK and in
Europe, our profit metrics were negatively impacted in the year. Adjusted
operating profit of £8.4 million was down 16.8% on the comparative 2024 year
(2024: £10.1 million) and adjusted profit before tax of £8.1 million was
down 18.2% (2024: £9.9 million). The extended shutdown at Carlton by
two-weeks and the subsequent commissioning period, combined to reduce our
manufacturing volumes by three million units in the year at this key site, and
this one-off impact was not recovered in the second half as expected, which
was a significant drag on profits.
We continue to manage our input costs on a risk-based approach and as such, we
have secured over 75% of our energy requirements for 2026. As with 2025 we see
this as an appropriate hedged balance as we continue to see some opportunity
in the potential for improvements in the pricing of utilities supported by the
contracts we have secured beyond 2026. As such, energy contracts are also in
place for broadly 50% of our expected requirements in 2027 with further
contracts into 2028 in line with this approach. Despite the one-off challenge
with Carlton in the first half of FY25 the Group's strategy remains focused on
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.
Adjusted EBITDA of £12.4 million was 11.4% lower than 2024 (2024: £14.0
million). This lower margin of 18.0% compared to our 2024 exit margin of 20.0%
largely reflecting the impact of our Carlton production delays, the
challenging trading at Floren and the interruption in production for our
pre-fabricated operations.
On a reported basis, the results include the impact of the amortisation of
acquired intangibles and some exceptional one-off items incurred over the year
which we believe are more helpful to exclude from those costs which relate to
ongoing operational performance. The adjustment of £1.4 million for the
amortisation of intangibles is in line with 2024. Separately, during the year
we have incurred exceptional items of £2.4 million. These relate to £1.4m of
costs incurred due to the closure of our Watlington operation including all
wind-down operating costs, redundancy costs, dilapidation and decommissioning
and non-repeating site overheads. £0.4m of one-off costs are associated with
the closure of our Hathern Terra Cotta brand and the remainder all related to
other Group restructuring costs. As a result, operating profit of £4.7
million was 42.7% below 2024 with profit before tax reflecting the same
performance also down 46.3% at £4.3 million.
After a tax charge of £0.7 million (2024: £1.9 million), the Group recorded
a profit for the year after tax of £3.6 million (2024: £6.1 million). The
tax rate of 15.9% (2024: 24.5%) is lower than our normalised tax rate of 25.0%
due to some prior year tax credits.
Adjusted basic earnings per share decreased by 8.3% to 7.50p (2024: 8.18p).
Basic earnings per share decreased by 39.0% to 4.02p (2024: 6.59p) reflective
of the drop through of our revenue reductions and cost increases during the
year.
The table below (Adjusted Performance Measures) provides a clear
reconciliation of the adjusted performance to the reported numbers.
Adjusted performance measures:
Year ended Year ended Change
31 Dec 31 Dec 2024
2025
£000 £000
Operating profit 4,689 8,171 (42.7%)
Adjustments:
Exceptional costs 2,374 -
Aborted corporate transaction costs and exceptional items - 543
Amortisation of acquired intangibles 1,373 1,372
Adjusted operating profit 8,436 10,086 (16.8%)
Depreciation 3,969 3,924
Adjusted EBITDA 12,405 14,010 (11.4%)
Finance income/(expense) (349) (211)
Depreciation (3,969) (3,924)
Adjusted profit before taxation 8,087 9,875 (18.2%)
Basic earnings per share 4.02p 6.59p (39.0%)
Adjusted basic earnings per share (a) 7.50p 8.18p (8.3%)
(a) The calculation of adjusted basic earnings per share is based on the
adjusted profit before tax of £8,087,000, which excludes amortisation of
acquired intangibles and exceptional items, then deducting taxation at the
effective group rate of 15.9%, and the weighted average number of ordinary
shares in issue, below in note 3.
Group Cash and Working Capital
Cash generated from operations for the year was £10.9 million, compared to
£10.2 million in the prior year. Operating cash conversion from adjusted
EBITDA was 87.9%, ahead of our like for like comparison in 2024 of 72.9%,
which is more in line with our typical rhythm of +90%. This was largely the
result of the tight management of our working capital cycle and broadly
matching our production output to our expected despatch volumes as we
carefully monitored our inventory position as we targeted investing in the
right inventory mix. As we highlighted in September, we run ahead of our
normalised run rate for capital expenditure for the year given the scale of
works we have undertaken over the last 12 months particularly and we still
expect the investment profile to normalise in our 2026 financial year.
We believe in the quality of our underlying fundamental cash-generating
ability in the business and we expect operating cash conversion to hold at
these normalised levels as we look into the new year and this continues to
underpin the approach to our capital allocation priorities for the Group.
Year ended Year ended
31 Dec 2025 31 Dec 2024
Net cash generated from operations £10.9m £10.2m
Tax paid (£1.9m) (£2.3m)
Interest paid/(received) (£0.3m) (£0.2m)
Proceeds from loan drawdown £2.0m -
Purchase of property, plant and equipment (£5.5m) (£5.6m)
Exceptional payments (£2.4m) -
Aborted corporate transaction costs - (£1.0m)
Proceeds from sale of land £0.1m -
Own shares acquired (£2.1m) -
Settlement for exercised share options - (£1.0m)
Lease payments (£0.9m) (£0.8m)
Dividend paid (£4.3m) (£4.2m)
Other (£0.3m) (£0.1m)
Net (decrease)/increase in cash and cash equivalents (£4.7m) (£5.0m)
Net cash £1.3m £6.0m
At the year end the Group had net debt of £0.7 million (2024: net cash of
£6.0 million).
Our operating cash generation, small net debt position and £20 million
Sterling and Euro denominated bank facility provides the Group with
considerable financial resilience and flexibility to pursue our capital
allocation policy. We renewed our bank facility in August and as a reminder
this is committed until August 2028 with a further two 1-year extension
options.
Property, plant and equipment
Our capital expenditure in the year highlights our continued focus on
proactively maintaining well invested and efficient manufacturing facilities.
The principal expenditure over the year was focused on Carlton, Floren and
Michelmersh with the ongoing works carried over from 2024 continuing as the
three facilities were closed from the start of 2025 with Floren temporarily
stopping production again in Q3 and the integration work at Michelmersh
occurring over the summer. Taking each site in turn, Carlton was offline for
all of January facilitating the completion of works started in November 2024.
The works took two weeks longer than we originally planned given the
unfortunate delay on the manufacture of a key element of tooling. Michelmersh
was closed for all of January and February as we undertook and completed major
kiln refurbishment works and key equipment upgrades. Floren remained closed to
the end of February as we concluded the major upgrades to improve the
environmental efficiency of our manufacturing processes through the
installation of a new exhaust scrubber system. The changes to the Floren
exhaust system also facilitated changes in our input materials mix to
importantly extend the life of our mineral reserves significantly which we
successfully trialled in March with very satisfactory results. We paused
production at Floren again in Q3 to bring forward some planned roof
improvement work over the main factory alongside significant improvements to
the brick yard.
We also took the decision to accelerate our planned integration of our
FabSpeed brand where we completed the installation of a new facility at our
Michelmersh site as well as expanding the scale of our operations at Charnwood
which allowed us to relocate our existing Watlington operations. With the
relocation work completing over the summer, we are grateful to the staff at
Watlington who remained with us after cessation of production operations to
undertake the extensive decommissioning work ahead of the successful handover
to the landlord at the end of December.
Purchase of own shares
In April 2025 we announced the renewal of our share buyback programme which we
first launched in November 2022 to reduce the share capital of the Group and
to return value to shareholders. The scheme continued to run until the end of
December at which point we had fulfilled the original allocated consideration
of £2.0 million purchasing an additional 2,132,427 shares, taking the total
shares purchased to date to 4,357,427. The shares continue to be held as
treasury shares.
Dividend
The Board is pleased to continue to commit to a dividend policy reflecting a
balanced approach to generating and returning value to our shareholders, and
as such, the Board is recommending a final dividend of 3.00 pence per share
(2024: 3.00 pence per share), which, together with the 1.60 pence per share
interim dividend (2024: 1.60 pence per share), gives a total dividend of 4.60
pence per share (2024: 4.60 pence per share), in line with last year. The
proposed dividend will be paid on 8 July 2026 to members on the register on 5
June 2026 with shares being marked ex-div on 4 June 2026.
Outlook
The prolonged downturn in construction activity in the UK and northern Europe
continues to test our strategy and the robustness of our business model. In
our principal regions, our key measure of the demand dynamics is the volume of
brick despatches, and these are still over 20% below the most recent high of
2022. Our response to these very challenging market dynamics has been
consistent through focusing on our core competencies by continuing to invest
in well-maintained and efficient operations that manufacture the highest
quality premium brick products for our customers. We believe that our business
has remained resilient over the last three years of difficult trading and this
has largely been achieved through the quality of our people and our ability to
address a broad range of end markets, which we view as essential as we look to
make further strategic progress into 2026.
The confidence and predictability that we have historically drawn from our
order intake levels has moderated over the last 12 months which stems from the
weaker consumer confidence and the inability of our customers to be as clear
on project commencement dates and delivery scheduling. Notwithstanding this,
order intake remains an integral component in how we measure the enthusiasm of
our customers for our product portfolio. This has run ahead of our
manufacturing capacity throughout 2025 and has continued into the start our
new financial year. This order intake momentum is positive despite the
recovery in construction activity levels remaining uncertain. The fluctuations
in sector demand mean that we remain watchful of continued overcapacity in our
brick markets however our strong balance sheet allows us to plan our
production scheduling and inventory management and we will respond to the
changing market conditions accordingly. Commercially we are focused on staying
close to our customers and continuing to diversify across RMI, housing,
commercial, social and specification projects and this whole market strategy
continues to underpin our outlook.
Consumers continue to exercise caution in their decision making to move or
improve their homes but given our facilities and portfolio we remain well
placed at the premium end of the brick market in the UK and Benelux markets.
The UK Government continues to highlight its commitment to improving the
planning process alongside increasing the volume of new homes being delivered
to the market and they are clear that a positive construction sector will
support broader growth targets in the UK. These Government statements indicate
that the medium-term fundamentals of our markets have a more positive horizon
and alongside the inherent characteristics of our portfolio are hugely
supportive with brick continuing to be the façade material of choice due to
its longevity, sustainability and energy efficient qualities in use, low cost
and broad aesthetic appeal. We believe the investment in our facilities
throughout 2025, and the accelerated integration of our pre-fabricated
operations, contributes to us being better positioned operationally in our
current challenging markets but ultimately will help us benefit when we have
positive and consistent momentum from our customer base.
Active risk management of our cost base and the execution of integration
activities has supported our ability to maintain stable product pricing and
given the strength of competition in our markets we believe this approach will
support us in maintaining our market share and continue to generate order
intake momentum from a diverse and loyal customer base with demand from
specification, housing, RMI and commercial sectors.
We remain resolutely focused on delivering sustainable operational cash
generation, which has underpinned our liquidity position at the start of the
new year. Combining this with our £20 million borrowing facility provides the
Group with both considerable financial resilience and flexibility to pursue
our clear capital allocation framework as we focus on delivering further value
for our shareholders.
The medium term fundamental market drivers for our business are encouraging
and we continue to be well positioned, however there are ongoing challenges in
our sector stemming from a lack of confidence in consumers due principally to
affordability concerns. Despite this, we believe we have an attractive
portfolio of products which is in demand across the full breadth of our end
markets and it is these indicative fundamentals that underpin our view that we
remain resilient as a business and will continue to look to make progress
against our strategic initiatives into 2026 and beyond.
Ryan Mahoney
Chief Executive Officer
Consolidated Income Statement
for the years ended 31 December 2025 and 2024
2025 2024
£'000 £'000
Revenue 68,895 70,107
Cost of sales (45,144) (44,981)
Gross profit 23,751 25,126
Administrative expenses (17,822) (15,618)
Amortisation of intangibles (1,373) (1,372)
(19,195) (16,990)
Other income 133 35
Operating profit 4,689 8,171
Finance income/(expense) (349) (211)
Profit before taxation 4,340 7,960
Taxation (690) (1,856)
Profit for the financial year 3,650 6,104
Basic earnings per share attributable to the equity holders of the company 4.02p 6.59p
Diluted earnings per share attributable to the equity holders of the company 3.94p 6.46p
.
Consolidated Statement of Comprehensive Income
for the years ended 31 December 2025 and 2024
2025 2024
£'000 £'000
Profit for the financial year 3,650 6,104
Other comprehensive income/(expense)
Items which may subsequently be reclassified to profit or loss
Currency movements 277 (65)
Items which will not subsequently be reclassified to profit or loss
Revaluation deficit of property, plant and equipment (1,755) (2,325)
Revaluation surplus of property, plant and equipment 657 5,187
Tax credit on exercise of options 87 -
Deferred tax on revaluation movement (274) (969)
(1,008) 1,828
Total comprehensive income for the year 2,642 7,932
Consolidated Balance Sheet
as at 31 December 2025 and 2024
2025 2024
£'000 £'000
Assets
Non-current assets
Intangible assets 21,238 22,587
Property, plant and equipment 71,374 69,387
92,612 91,974
Current assets
Inventories 20,170 19,212
Trade and other receivables 10.819 9,772
Corporation tax receivable 127 -
Cash and cash equivalents 1,292 6,004
Total current assets 32,408 34,988
Total assets 125,020 126,962
Liabilities
Current liabilities
Trade and other payables 11,509 11,437
Lease liabilities 978 689
Interest bearing borrowings 2,000 -
Corporation tax payable - 1,061
Total current liabilities 14,487 13,187
Non-current liabilities
Lease liabilities 1,514 1,575
Deferred tax liabilities 15,982 16,269
17,496 17,844
Total liabilities 31,983 31,031
Net assets 93,037 95,931
Equity attributable to equity holders
Share capital 19,181 19,181
Share premium account 16,724 16,724
Reserves 22,078 22,764
Retained earnings 35,054 37,262
Total equity 93,037 95,931
Consolidated Statement of Changes in Equity
for the years ended 31 December 2025 and 2024
Share capital Other reserves Share premium Retained Total
earnings
£'000 £'000 £'000 £'000 £'000
As at 1 January 2024 19,181 21,615 16,724 35,324 92,844
Profit for the year - - - 6,104 6,104
Revaluation deficit - (2,325) - - (2,325)
Revaluation surplus - 5,187 - - 5,187
Deferred tax on revaluation - (969) - - (969)
Currency difference - (65) - - (65)
Total comprehensive income/(expense) - 1,828 - 6,104 7,932
Share based payment - 426 - - 426
Released on exercise of options - (960) - - (960)
Shareplan purchase - (41) - - (41)
Deferred tax on share options - (104) - - (104)
Dividend paid - - - (4,166) (4,166)
As at 31 December 2024 19,181 22,764 16,724 37,262 95,931
Profit for the year - - - 3,650 3,650
Prior year reserve transfer - 33 - (33) -
Revaluation deficit - (1,755) - - (1,755)
Revaluation surplus - 657 - - 657
Tax credit on exercise of options - - - 87 87
Deferred tax on revaluation - 274 - - 274
Currency difference - 277 - - 277
Total comprehensive income/(expense) - (514) - 3,704 3,190
Share based payment - 481 - - 481
Released on exercise of options - (224) - 224 -
Deferred tax on share options - (277) - - (277)
Sale of land - - - 112 112
Shareplan purchase - (152) - - (152)
Purchase of own shares - - - (1,974) (1,974)
Dividend paid - - - (4,274) (4,274)
As at 31 December 2025 19,181 22,078 16,724 35,054 93,037
Consolidated Statement of Cash Flows
for the years ended 31 December 2025 and 2024
2025 2024 Restated £'000
£'000
Cash flows from operating activities
Profit before taxation 4,340 7,960
(Loss)/profit on sale of fixed assets 139 (6)
Finance (income)/expense 349 211
Depreciation 3,969 3,924
Amortisation 1,373 1,372
Share based payment charge 481 426
Cash flows from operations before changes in working capital 10,651 13,887
Decrease/(increase) in inventories (958) (2,750)
Decrease/(increase) in receivables (1,047) (531)
(Decrease)/increase in payables 2,252 (420)
Net cash generated by operations 10,898 10,186
Exceptional payments (2,374) -
Aborted corporate transaction cost * - (958)
Taxation paid (1,858) (2,323)
Net cash generated by operating activities 6,666 6,905
Cash flows used in investing activities
Purchase of property, plant and equipment (5,546) (5,600)
Proceeds from sale of fixed assets 33 6
Proceeds from sale of land 112 -
Investment in intangible assets (24) (8)
Net cash used in investing activities (5,425) (5,602)
Cash flows used in financing activities
Lease payments (934) (821)
Proceeds from loan drawdown 2,000
Interest received/(paid) (349) (211)
Settlement for exercise of options - (960)
Own shares acquired (2,126) (41)
Dividend paid (4,274) (4,166)
Net cash used in financing activities (5,683) (6,199)
Net (decrease)/increase in cash and cash equivalents (4,442) (4,896)
Cash and cash equivalents at the beginning of the year 6.004 10,958
Foreign exchange differences (270) (58)
Cash and cash equivalents at the end of the year 1,292 6,004
Cash and cash equivalents comprise:
Cash at bank and in hand 1,292 6,004
Bank overdraft - -
1,292 6,004
*The aborted transaction costs for December 2024 have been reclassified from
financing activities to operating activities on the basis of where they were
classified in the income statement. This has resulted in the net cash used in
financing activities and the net cash (used in)/generated by operating
activities changing.
NOTES TO GROUP PRELIMINARY STATEMENT
1. Accounting Policies
The consolidated financial statements have been prepared in accordance
with UK-adopted international accounting standards and with those parts of
the Companies Act 2006 applicable to companies reporting under accounting
standards as adopted for use in the UK.
The consolidated financial statements are presented in sterling and all values
are rounded to the nearest thousand ("£000") except where otherwise
indicated.
2. Financial Information
The financial information set out in this Preliminary Announcement does not
constitute the Group's statutory financial statements for the years ended 31
December 2025 or 2024. The financial information has been extracted from the
Group's statutory financial statements for the years ended 31 December 2025
and 2024. The auditors have reported on those financial statements; their
report was unqualified, did not include references to any matters to which the
auditors drew attention by way of emphasis and did not contain a statement
under Section 498(2) or (3) of the Companies Act 2006.
The statutory accounts for the year ended 31 December 2025 will be filed
with the Registrar of Companies following the Company's Annual General
Meeting. The statutory accounts for the year ended 31 December 2024 have
been filed with the Registrar of Companies. The report of the auditors on
those statutory accounts was also unqualified, and also did not contain a
statement under section 498(2) or (3) of the Act.
3. Earnings Per Share
Basic
The calculation of earnings per share from continuing operations based upon
the profit for the year of £3,650,000 (2024: £6,104,000) and 90,659,952
(2024: 92,601,027) weighted average number of ordinary shares.
Diluted
The calculation of diluted earnings per share from continuing operations based
upon the profit for the year of £3,650,000 (2024: £6,104,000) and
92,542,587 (2024: 95,547,490) weighted average number of ordinary shares.
4. Dividend
The Board has recommended a final dividend for the year of 3.00 pence per
share, to be paid on 8 July 2026 to shareholders whose names appear of the
register of members at the close of business on 5 June 2026.
5. Annual Report and Accounts
Copies of this announcement are available and the Annual Report will be
available in due course on the Group's website www.mbhplc.co.uk
(http://www.mbhplc.co.uk/) and from the Company's registered office
at Freshfield Lane, Danehill, Haywards Heath, West Sussex RH17 7HH.
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Copyright 2019 Regulatory News Service, all rights reservedRecent news on Michelmersh Brick Holdings
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