TIDMMBH
RNS Number : 0460F
Michelmersh Brick Holdings PLC
25 July 2016
25 July 2016
Michelmersh Brick Holdings Plc
("MBH", the "Company", or the "Group")
Half Year Results for the six months ended 30 June 2016
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 2016.
HIGHLIGHTS
Financial Highlights:
-- PBT increased to GBP2.6 million (H1 2015: GBP2.5 million)
-- Operating profit of GBP2.6 million (H1 2015: GBP2.7
million)
-- 4% Increase in EPS 2.57 pence (H1 2015: 2.47 pence)
-- Turnover steady at GBP15.3 million (H1 2015: GBP15.3
million)
-- Net cash balance GBP2.7 million against a net debt of GBP0.8
million at June 2015
Operational Highlights:
-- Good performance in a flat market
-- Average selling prices increase 2% over H1 2015
-- Landfill License completes consultation period which will
lead to economic realisation of Dunton site
-- Commenced kiln replacement project at Michelmersh - expected
completion in autumn 2016
-- The Group ended the period well ahead of intake target with a
forward order commitment over 47 million bricks
-- Well positioned for a stronger H2 2016 operational and
financial performance
Commenting on the results, Eric Gadsden, Chairman of Michelmersh
Brick Holdings Plc, said:
"The Company performed well in the first half despite the
expected weaker market, and is on track to deliver its targets for
the full year. We continue to invest in our plants to increase
efficiency, which over the medium term will enable us to outperform
the market with on-going creative development of products,
investment in process and encouragement of the efforts of its
employees. The business is profitable, cash generative and
supported by a strong and long-term asset base"
EU Referendum Outcome
Whilst it is too early to know the full long-term impacts of the
UK's exit from the EU, the Board feels that the Company is well
positioned to manage any effects within the brick manufacturing and
housing industry. The Board do not believe the outcome of the
referendum in itself results in any material change in the outlook
for the Group's near term financial results or future growth
prospects.
Enquiries:
Michelmersh Brick Holdings
Plc
Frank Hanna, Joint CEO
Stephen Morgan, Finance 01825
Director 430 413
Cenkos Securities plc
Bobbie Hilliam (NOMAD)
Harry Pardoe 020 7397
Alex Aylen (Sales) 8900
Yellow Jersey PR
07747
Charles Goodwin 788 221
07768
Dominic Barretto 357 739
About Michelmersh Brick Holdings PLC:
Michelmersh Brick Holdings PLC is a business with five market
leading brands: Blockleys, Charnwood, Freshfield Lane, Michelmersh
and Hathern Terra Cotta. These divisions operate within a fully
integrated business combining the manufacture of clay bricks, tiles
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 approximately 72 million clay bricks, tiles and pavers
per annum. MBH currently owns most of the UK's premium
manufacturing 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 built 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 and
www.bimbricks.com
Chairman's Statement
I am pleased to present the Group's results for the six months
ended 30 June 2016 in which the Group has maintained its position
within its marketplace. The Group generated a profit before tax of
GBP2.6 million (2015: GBP2.5 million). Turnover for the first six
months of 2016 was level with the equivalent period in 2015 despite
a small volume decrease offset by a 2% increase in average selling
price. Gross margin fell back slightly from 38.6% to 37.3% as a
result of some short-term production problems at one of our sites.
Administration costs have fallen slightly despite increased
expenditure on IT systems. The interest burden of recent years has
been replaced by modest interest income as we maintained a cash
positive position throughout the 6 months.
Dividend
The final dividend of 1.0 (2014: 0.5) pence per share for 2015
was paid on 30 June 2016. It is not the Board's current policy to
pay an interim dividend but it does intend to propose a full year
dividend out of 2016 earnings payable in June 2017. The Board
recognises the need to provide a meaningful yield to shareholders
and has therefore adopted a progressive dividend policy for future
years.
Assets
Final consultation on the landfill license at the Dunton site
has been completed and we await issue of the final license by the
Environment Agency. We expect conclusion of this process within
weeks and are actively considering options to activate the site in
2016.
Operational Review
Volumes of bricks sold fell slightly in the first half to 35.1
million (H1 2015: 35.7 million) in what is a very competitive
market. The Group did however achieve low single digit average
selling price increases of 2% that allowed us to maintain turnover
at lower volume. With a full period of the expanded capacity at
Freshfield Lane, production in the period increased from 34.8 to
35.2 million allowing stock levels to return to circa 10 weeks
sales, a level at which we can provide a timely and reliable
service to our customers.
Increased production at our two biggest plants, Freshfield Lane
and Blockleys, was offset by shortfall in output from the
Michelmersh site in Romsey as yields were affected by clay
geological issues in the existing quarry as delays in working
through ecological and archaeological issues restricted expansion
into the new available reserves. These issues have now been
resolved and the effect on the remainder of the year is expected to
be minimal and our GBP1m investment in a new kiln will be
operational in the second half.
Cost of production has been affected by the Michelmersh
performance and the Group's gross profit has fallen by 1.3% to
37.3%.
As also reported in the equivalent 2015 period, the energy costs
have fallen in the period despite the increase in output. The Group
has continued to hedge forward into winter 2017 to lock into the
benign energy market and secure ongoing production costs. Recent
rises in energy cost indicators will have limited effect on future
costs for the Group.
The first six months of 2016 have seen a robust level of order
intake across the Group, particularly at our southern plants. The
Group ended the period well ahead of intake target with a forward
order commitment over 47 million bricks. Again, the emphasis is to
ensure a good well balanced mix of forward orders. This strategy
was reflected in our product and delivery mix across the various
market sectors. The Group aims to continue this theme during
2016.
Strong deliveries in the key repair, maintenance and improvement
market ("RMI") via key national and regional builders merchants
have been complemented with deliveries to quality housing and
regeneration projects. Commercial specification work made up the
balance, enhanced by BIM and a number of high end bespoke blends
from both our i-Line and Synthesis ranges.
A number of recently supplied notable projects have been the
RIBA London Award winning Banham Group, Thornsett Road, Wandsworth,
the Riverside building for Waveney District Council and Millgate's
spectacular Englemere, Ascot development. Ongoing future
developments include Crest Nicholson's Longcross, Chertsey and the
inspiring, sustainable Citu Little Kelham project in Sheffield.
The Group has seen a significant level of traffic and data
downloads through it's BIMBricks.com branded website. It has been
very positive to see the impact of BIM on project management and
order intake.
Hathern Terracotta continues to improve its contribution to the
Group and has exceeded the exceptional performance in H1 2015.
Current orders and prospects suggest that operational performance
will proceed ahead of historic levels.
Outlook
We appraise a wide range of economic, construction survey and
brick industry statistics against which we measure and plan our
business. This information is filtered through our experience and
real-time feedback from our markets. Over the past few months there
are number of conflicting trends that have been further confused by
pre and post Brexit market movements.
Industry statistics suggest that brick manufacturing is largely
steady and delivery volumes slightly, but not significantly, up and
this is reflected in flat pricing. Imports seem to be falling from
recent increased levels with currency and local economy factors
indicating that this reduction will continue. Most commentators
recognise the release of pressure from imports and the long term
increasing demand for housing and this leads to a steady and
growing demand for bricks. Whilst this may not be apparent in
markets yet, the direction of travel is established.
The Company performed well in the first half, despite the
expected weaker market, and is on track to deliver its targets for
the full year. We continue to invest in our plants to increase
efficiency which over the medium term will enable us to outperform
the market with on-going creative development of products,
investment in process and encouragement of the efforts of its
employees. The business is profitable and cash generative and
supported by a strong and long-term asset base.
Eric Gadsden
Chairman
25 July 2016
Consolidated Income Statement
6 months 6 months 12 months
ended ended ended
30 30 31
June June December
2016 2015 2015
GBP'000 GBP'000 GBP'000
Unaudited Unaudited Audited
Revenue 15,292 15,327 29,071
Cost of sales (9,581) (9,411) (17,961)
Gross profit 5,711 5,916 11,110
Administration expenses (3,126) (3,244) (6,468)
Other income 13 41 68
Operating profit 2,598 2,713 4,710
Finance income/(costs) 8 (209) (153)
------------ ------------ ----------
Profit before taxation 2,606 2,504 4,557
Taxation (521) (501) (951)
------------ ------------ ----------
Profit for the period 2,085 2,003 3,606
------------ ------------ ----------
Basic earnings per share 2.57 2.47 p 4.44
p p
Diluted earnings per share 2.55 2.46 p 4.42
p p
Consolidated Statement of Comprehensive Income
6 months 6 months 12 months
ended ended ended
30 June 30 June 31 December
2016 2015 2015
GBP'000 GBP'000 GBP'000
Unaudited Unaudited Audited
Profit for the financial period 2,085 2,003 3,606
---------- ---------- -------------
Other comprehensive income
Items which will not subsequently be reclassified to profit or loss
Revaluation surplus of property, plant & equipment - - 1,163
Revaluation deficit of property, plant & equipment - - (2,771)
Deferred tax on revaluation - - 804
---------- ---------- -------------
Other comprehensive income for the period net of tax - - (804)
---------- ---------- -------------
Total comprehensive income for
the financial period 2,085 2,003 2,802
---------- ---------- -------------
Consolidated Balance Sheet
As at As at As at
30 June 30 June 31 December
2016 2015 2015
GBP'000 GBP'000 GBP'000
Unaudited Unaudited Audited
Assets
Non-current assets
Intangible assets 2,475 2,475 2,476
Property, plant and equipment 41,354 42,472 40,810
---------- ---------- -------------
43,829 44,947 43,286
Current assets
Inventories 7,278 6,239 7,195
Trade and other receivables 6,045 8,198 4,308
Investments 30 30 30
Cash and cash equivalents 2,747 132 2,935
---------- ---------- -------------
Total current assets 16,100 14,599 14,468
---------- ---------- -------------
Total assets 59,929 59,546 57,754
---------- ---------- -------------
Liabilities
Current liabilities
Trade and other payables 4,899 4,840 4,165
Provisions - 6 -
Interest bearing borrowings - 906 456
Corporation tax payable 521 871 -
---------- ---------- -------------
5,420 6,623 4,621
---------- ---------- -------------
Non-current liabilities
Deferred tax liabilities 3,914 4,593 3,914
---------- ---------- -------------
Total liabilities 9,334 11,216 8,535
---------- ---------- -------------
Net assets 50,595 48,330 49,219
========== ========== =============
Equity attributable to equity holders
Share capital 16,247 16,247 16,247
Share premium account 11,495 11,495 11,495
Reserves 16,953 17,564 16,850
Retained earnings 5,900 3,024 4,627
---------- ---------- -------------
Total equity 50,595 48,330 49,219
========== ========== =============
Consolidated Statement of Changes in Equity
Share Share Merger Share Revaluation Retained Total
Capital Option Reserve Premium Reserve Earnings Equity
Reserve
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
As at 1 January
2015 16,247 48 979 11,495 16,503 1,422 46,694
Profit for
the period - - - - - 2,003 2,003
-------- -------- -------- -------- ------------ --------- --------
Total comprehensive
income - - - - - 2,003 2,003
Share based
payment - 39 - - - - 39
Dividends
paid - - - - - (406) (406)
Transfer to
retained earnings - - - - (5) 5 -
As at 30 June
2015 16,247 87 979 11,495 16,498 3,024 48,330
Profit for
the period - - - - - 1,603 1,603
Revaluation
surplus - - - - 1,163 - 1,163
Revaluation
deficit - - - - (2,771) - (2,771)
Deferred tax
on revaluation - - - - 804 - 804
-------- -------- -------- -------- ------------ --------- --------
Total comprehensive
income - - - - (804) 1,603 799
Share based
payment - 90 - - - - 90
As at 31 December
2015 16,247 177 979 11,495 15,694 4,627 49,219
Profit for
the period - - - - - 2,085 2,085
Total comprehensive
income - - - - - 2,085 2,085
Share based
payment - 103 - - - - 103
Dividends
paid - - - - - (812) (812)
As at 30 June
2016 16,247 280 979 11,495 15,694 5,900 50,595
======== ======== ======== ======== ============ ========= ========
Consolidated Statement of Cash Flows
6 months 6 months 12 months
ended ended ended
30 June 30 June 31 December
2016 2015 2015
GBP'000 GBP'000 GBP'000
Unaudited Unaudited Audited
Net cash generated by
operating activities 1,628 2,799 5,778
---------- ---------- --------------
Cash flows from investing
activities
Purchase of property,
plant and equipment (1,004) (958) (1,734)
Proceeds from sale of - - -
investment
Proceeds from sale of
land - - 1,500
Proceeds on disposal
of property, plant and
equipment - - 7
---------- ---------- --------------
Net cash used in investing
activities (1,004) (958) (227)
---------- ---------- --------------
Cash flows from financing
activities
Repayment of interest
bearing borrowings - (5,000) (5,000)
Dividends paid (812) (406) (406)
Repayment of finance
lease obligations - (2) (5)
---------- ---------- --------------
Net cash used in financing
activities
(812) (5,408) (5,411)
---------- ---------- --------------
Net (decrease)/increase
in cash and cash equivalents (188) (3,567) 140
Cash and cash equivalents
at beginning of period 2,935 2,795 2,795
---------- ---------- --------------
Cash and cash equivalents
at end of period 2,747 (772) 2,935
========== ========== ==============
Cash and cash equivalents
comprise:
Cash at bank and in
hand 2,747 132 2,935
Bank overdraft - (904) -
---------- ---------- ----------------
2,747 (772) 2,935
========== ========== ================
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 the AIM Market 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.
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 European Union. 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 European Commission. The financial information has been
prepared on the basis of IFRS that the Directors expect to be
adopted by the European Union and applicable as at 31 December
2016.
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 2015 have been filed with the Registrar of
Companies. The report of the auditors on those statutory accounts
was unqualified, did not draw attention to any matters by way of
emphasis 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 2016
and 30 June 2015 is unaudited.
3. EARNINGS PER SHARE
The calculation of earnings per share is based on a profit of
GBP2,085,000 (six months ended 30 June 2015 -GBP2,003,000; 12
months ended 31 December 2015-GBP3,606,000) and 81,234,656 being
the weighted average number of ordinary shares in issue.
Diluted
At 30 June 2016 there were 483,147 dilutive shares under option
leading to 81,717,803 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.
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR SEWFIEFMSEIW
(END) Dow Jones Newswires
July 25, 2016 02:00 ET (06:00 GMT)
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