TIDMMBH
RNS Number : 0171I
Michelmersh Brick Holdings PLC
19 March 2018
19 March 2018
Michelmersh Brick Holdings Plc
("MBH" or the "Group")
FINAL RESULTS
Landmark year for the Group as Carlton acquisition gives growth
and opportunity
Michelmersh Brick Holdings (AIM:MBH), the specialist brick
manufacturer, is pleased to report its audited final results for
the year ended 31 December 2017, representing a strong performance
and continued progress.
Financial Highlights
-- Revenue up 26% to GBP37.9 million (2016: GBP30.1 million);
-- Underlying(1) Operating profit increased by 42% to GBP6.5 million (2016: GBP4.6 million);
-- Underlying(1) EPS at 5.9 pence up 34% over 2016
-- Underlying(1) EBITDA increased 42% to GBP8.0 million (2016: GBP5.6 million)
-- Cash generated by operations of GBP6.9 million (2016: GBP5.7
million), representing 141% of Operating profit; and
-- After paying the first ever Interim dividend this year, total
dividend increased by 7.5% to 2.15 pence per share for the
period.
Operational Highlights
-- Acquisition of Carlton for a net consideration of GBP31.2 million;
-- Completed sale of former Dunton brickworks site for GBP2.7 million;
-- Strengthened board with the appointment of Stephen Bellamy as non-executive director;
-- Built forward order book to 60 million units; and
-- Strong showing at the BDA awards including the BDA Supreme award.
Martin Warner, Chairman at Michelmersh Brick Holdings,
commented: "The Group's position has been significantly
strengthened in 2017 with the addition of the Carlton plant. Our
geography, product range, scale and market presence have all been
enhanced as a result and there is further scope to benefit from
this acquisition as the management teams work together to maximise
the performance of the Group.
"The UK construction industry remains stable with a level of
activity that keeps UK brick manufacturing operating at capacity
with limited options for expansion. The Group's order book is
strong and 2018 promises to be busy."
(1) Underlying results reflect the statutory results excluding
one-off items that arose in connection with the acquisition of
Carlton and the amortisation of intangible assets generated by the
fair value exercise.
A presentation for analysts will be held today, 19 March 2018,
at 09:30am at 1 Cornhill, London, EC3V 3ND.
Contacts:
Michelmersh Brick Holdings
Plc
Frank Hanna, Joint CEO
Stephen Morgan, Finance 01825
Director 430 412
Cenkos Securities plc
Bobbie Hilliam (NOMAD) 020 7397
Harry Hargreaves 8900
07747
Yellow Jersey PR 788 221
07555
Charles Goodwin 159 808
Abena Affum
About Michelmersh Brick Holdings PLC:
Michelmersh Brick Holdings PLC is a business with six market
leading brands: Blockleys, Carlton, 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 over 100 million clay bricks, tiles and pavers per annum.
Michelmersh 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 environment by adding value to the architectural
landscape for generations to come.
CHAIRMAN'S STATEMENT
INTRODUCTION
I am very pleased to report on a landmark year for the Group,
which has significantly expanded following the acquisition of
Carlton Main Brickworks Limited ("Carlton") in June 2017, for a net
consideration of GBP31.2m. Carlton is an established and highly
regarded brick manufacturer based in South Yorkshire, which
increases the scale and reach of the Group and fits our business
model and culture perfectly. This acquisition is a decisive step
forward, which will yield a range of benefits over the coming
years. The impact of the acquisition affects all areas of the
financial statements as you will see in the coming pages.
FINANCIAL HIGHLIGHTS
The results include a part year contribution from Carlton from
23 June 2017, but the exceptional charges and amortisation of
associated intangibles have disrupted the statutory format. A
reconciliation of the reported results and the underlying
performance is given below:
Summary Results Reported Adjustments Underlying(4) Reported
2017 2017 Increase 2017 2016
GBP000 GBP000 GBP000 GBP000
Revenue 37,867 - 26% 37,867 30,057
Gross profit 13,418 480(1) 34% 13,898 10,348
35.4% 36.7% 34.4%
Administrative
expenses (8,610) 1,173(2) 28% (7,437) (5,833)
Other income 49 - 49 36
Operating Profit 4,857 1,653 6,510 4,551
EBITDA(3) 7,338 42% 7,965 5,617
(1) The brick stocks acquired with Carlton were fair valued at
GBP480,000 in excess of their book value and hence no profit arose
on their disposal. This adjustment reflects valuing the brick
stocks at cost and taking the profit when the bricks are sold
during the period.
(2) Administrative expenses include amortisation of
GBP1,036,0000 on intangible assets associated with the acquisition
of Carlton and are disclosed separately below and GBP137,000
one-off reorganisation costs relating to the integration of Carlton
which are included under exceptional items.
(3) EBITDA is computed as Operating profit excluding
depreciation, amortisation and exceptional items.
(4) Underlying results reflect the statutory results excluding
one-off items that arose in connection with the acquisition of
Carlton and the amortisation of intangible assets generated by the
fair value exercise.
The Group reports a 43% increase in underlying operating profit
before taxation of GBP6.5 million (2016: GBP4.6 million) and a
similar rate of increase in underlying EBITDA to GBP8.0m (2016:
GBP5.6m).
Turnover and underlying operating profit increased with the
inclusion of Carlton, the full effect of which will be seen in 2018
with a full year of trading from all Group brick plants. Earnings
per share on the underlying results amount to 5.87 pence (2016:
4.38 pence) represent an improvement of 34%.
CASH AND BORROWINGS
At 31 December 2017, the Group had net debt of GBP17.5 million
(at 31 December 2016: cash of GBP4.7 million). The acquisition of
Carlton required the Group to seek new funding and after a
competitive process, which resulted in the appointment of HSBC Bank
plc as the Group's principal banker. HSBC has provided a range of
facilities for a six-year term to meet the funding of the
acquisition and provide working capital facilities for the Group.
These facilities are described in more detail in the notes to the
financial statements.
The net debt figure also includes some interest bearing deferred
consideration (GBP1.75 million) of the original amount of GBP3.5
million, which formed part of the total acquisition consideration
for Carlton. The first instalment of GBP1.75 million was due for
repayment in June 2018, but surplus funds allowed this to be repaid
early in November 2017. The remaining balance is due in equal
instalments in June 2019 and June 2020.
Net cash generated by operations was GBP6.9 million, an increase
of 22% over the previous year and 41% more than reported operating
profit. This inflow was enhanced by receipt of GBP2.68 million for
the sale of the Dunton landfill site in June 2017.
ASSETS AND WORKING CAPITAL
Gross assets held by the Group have increased during 2017
principally in respect of the Carlton acquisition. The total
Carlton consideration of GBP38 million exceeded the historic net
book value of the Company by GBP25 million and a valuation exercise
has attributed a fair value to plant and machinery, land and
buildings, stocks and intangible assets including GBP4.6 million
goodwill.
Investment in fixed assets amounted to GBP1 million during the
year. A number of projects are in the feasibility assessment stage
and are projected to commence over the next two years.
DIVID
On 30 June 2017, the Group paid a dividend in respect of 2016 of
2.0 pence per share after doubling the dividend paid in respect of
the 2015 financial year. Over recent years, the Group has striven
to reward shareholders by lifting dividends to a meaningful level
on an appropriate distribution of earnings taking into account the
Group's desire to also reduce debt and invest in the business for
the long-term.
On 12 January 2018, the Group paid an interim dividend of 0.7
pence per share in respect of 2017 earnings. The Board has
considered the final dividend against the underlying earnings of
the Group so that exceptional and amortisation costs relating to
the acquisition of Carlton do not adversely affect the balance of
payments. It proposes a final dividend of 1.45 pence per share,
bringing the total dividend for 2017 to 2.15 pence per share
representing a 7.5% increase over 2016.
LAND ASSETS
Following an arduous and technically challenging planning
process, the sale of the former Dunton Brickworks site was
completed in June 2017 and proceeds of GBP2.68 million were
received.
The Directors assess the value of the Group's land and buildings
annually with guidance from independent experts on a rolling basis.
A net revaluation surplus of GBP1.7 million was recognised as at 31
December 2017, which reflected assessments of all Group properties,
given specific assumption on their future prospects and activity at
each site, and included surpluses and deficits over book value as
appropriate.
The Group continues to evaluate and enhance the future cash
returns from its land assets over and above the brick manufacturing
operations. The planning conditions around the remediation of the
quarry at Charnwood has been revised and the Board expects further
commercial evaluation of the site alongside the continuation of our
brickmaking activities. At Telford, the plans to relocate the
public road running through the site have progressed well, which
will eventually unlock the possibility to develop an area of
surplus land.
BOARD AND EMPLOYEES
With Eric Gadsden stepping down from the board in May 2017, a
recruitment process was undertaken to appoint a further
non-executive director, which culminated in Stephen Bellamy joining
the Board in February 2018. Stephen has extensive financial and
operational experience and is enthusiastic to bring the benefits of
his abilities to Michelmersh. I welcome Stephen to the Board and
look forward to working with him.
I would like to thank the efforts of our employees who have
risen to the challenge of acquisition and integration of Carlton. I
also welcome the Carlton employees to the Group who I am sure will
benefit from being part of a wider business and the opportunities
that this brings.
OUTLOOK
The Group's position has been significantly strengthened in 2017
with the addition of the Carlton plant. Our geography, product
range, scale and market presence have all been enhanced as a result
and there is further scope to benefit from this acquisition as the
management teams work together to maximise the performance of the
Group. Since the year end, we have also taken a decision to change
the operational structure at the Michelmersh plant which addresses
operational challenges at this plant and reduces risk going
forward. The Group's order book is strong and 2018 promises to be
busy.
The UK construction industry remains stable with a level of
activity that keeps UK brick manufacturing operating at capacity
with limited options for expansion. Statistics show that demand was
strong and increased in 2017, whilst production capacity grew at a
lower rate. Industry brick stocks have fallen and imported product
continues to have a place in the market. Despite this balance of
supply and demand, industry prices over 2016 were flat. At some
point, inflationary pressures should lead to increases in prices
and margin improvement. During the most recent economic recession
insufficient margin led to a lack of investment in the UK brick
manufacturing sector. During the cycle we have seen ageing plant
along with the exhaustion of local mineral result in the closure of
some of the historic industry capacity. Medium to long term margin
improvement is therefore a necessity. This will in turn ensure
realistic investment to secure a positive well balanced brick
output that is sufficient to support any future housing growth in
the UK.
I look forward with confidence to the coming year against a
positive construction industry backdrop.
Martin Warner
Chairman
19 March 2018
CEO'S STATEMENT
CLAY PRODUCTS
The Group continued to benefit from positive construction
fundamentals during 2017. There were three key positive areas: RMI
(repair, maintenance and improvement), private housing and urban
regeneration schemes, all of which contributed to the Group's
success. The Group also achieved significant success in the
specification and commercial sector. From a political standpoint,
the Group notes that all parties continue to support the need for
more house building. As such, the forward fundamentals continue to
be positive as the UK strives to meet housing needs through new
builds and the refurbishment of the ageing housing stock.
The Office for National Statistics ("ONS") noted that brick
production rose just over 4% from the previous year, whilst brick
deliveries rose 11%, with 2017 being the strongest year for
despatches since 2007. ONS also noted brick stocks falling by
nearly 28% towards the end of the year against a background of flat
pricing.
2017 saw the combined Group's highest forward order intake for a
12-month period and, along with the acquisition of Carlton
mid-year, the Group despatched the highest ever number of bricks in
a 12 month period, setting the tone for Group targets in 2018.
Michelmersh continued its focus and core ambition to lead the
premium brick and Terra Cotta sector. Another central theme of 2017
was the Group's continued support of the distribution sector,
whereby we ensured a well-managed timely supply of product to sites
and merchant yards.
PERFORMANCE
Group revenue for the year to 31 December 2017 of GBP37.9
million (2016: GBP30.1 million) reflects the uplift provided by
Carlton. Excluding Carlton, brick turnover grew by 3% achieved with
a 2% increase in sales volumes and modest price inflation.
Gross margins on a Group level have been enhanced by the
addition of the Carlton works. As the Group's largest site, it can
generate higher margins which will feed through into 2018 as it
contributes for a full 12 months. Investment in plant is being
considered in order to further improve output and production
efficiencies.
Production volumes excluding Carlton increased by 2% through
increased plant utilisation efficiencies at Blockleys.
The Michelmersh plant in Romsey had a difficult year. This plant
has one of the smallest capacities in the Group in an industry
where scale is a significant factor. Despite considerable
management input and investment in the plant, 2017 saw continued
deterioration in results. Turnover fell as average selling price
and volumes struggled, while cost of production increased, and the
plant contributed a net deficit compared to modest profitability in
2016. Following a detailed analysis of performance and future
prospects, the Group decided to restructure operations in February
2018. Unfortunately, a number of employees were made redundant as a
result of this change, but following a comprehensive consultation
and outplacement process we are pleased that the majority of
affected staff have found alternative employment. The recent
changes are already improving margin at the plant and this is set
to continue, moving the site back into a positive underlying
contribution for 2018.
Our Charnwood factory in Leicestershire is expected to benefit
from the changes at Michelmersh where traditionally, within the
product ranges, there have been some competing market forces.
At 31 December 2017, the business and operating assets of
Carlton were 'hived-up' into Michelmersh Brick UK Limited and
Carlton now operates as a plant within the existing Group
structure. The production management teams have been fully
integrated and will both benefit with shared experience and
resource. The sales and administration teams have been amalgamated
to provide greater geographical and product coverage.
Since acquisition, the Carlton plant has exceeded expectations
not only in terms of operational performance but also through
integration into the Michelmersh Group. A pre-planned extended
shutdown of the plant over the Christmas period caused loss of
output and sales in December and into January. The shutdown
included a significant reconditioning of the kiln and a range of
backlog maintenance that should reduce risk of breakdowns and
improve future operational performance.
During 2017 the Group saw a continuation of its "balanced market
approach". Strong customer service and, as alluded to earlier, a
strong support of the distribution network on both a national and
regional basis drove a smooth, robust flow of deliveries throughout
the whole year. The Group's RMI and housing orders remained
particularly strong throughout the year and this trend has
continued into 2018. Quality housing and urban regeneration was
again a key sector during 2017, with the Group supplying products
to many notable house builders such as Crest Homes, Berkeley Group,
Croudace, Countryside Properties PLC.
The year saw tremendous success in supplying and completing
award winning projects. As in previous years, our commitment to
enhancing the built environment came to the fore. The Group won
orders to supply bespoke Blockleys products for the iconic
Battersea Power Station redevelopment. Dujardin Mews, Enfield won
the Brick Development Association (BDA) Supreme Award using
Freshfield Lane products, whilst South Gardens in South East London
picked up the BDA award for Best Urban style. This project was also
utilised to enhance our digital offering with a data and image rich
environment to serve self-builders, architects, specifiers,
contractors, house builders and students.
Enhanced and engaging social media coupled with an increase in
BIM (Building Information Modelling) website traffic improved the
Group's 2017 online profile, underlining the Group's drive to
provide free technical data and quality information for the sector
as a whole. Continuing to inspire architects and designers is at
the forefront of the Group's online ethos, with the digital content
and data always helping to shape and enhance our future built
environment.
Hathern Terra Cotta had another strong year in the specialist
terra cotta restoration sector. Notable projects included Dulwich
College, the BBC Television Centre and remedial work to The GAP
store in Leeds.
Other notable Group projects included the stunning IfAM building
at the University of Nottingham. A further example of the Group's
ability to supply innovative contemporary high quality products can
be seen at the Ronald Mcdonald House near London Bridge where our
i-line Charnwood bricks have enhanced the architectural details and
elevations.
The Group has improved its online presence with a new revised
website and updated BIM files incorporating all the products on
offer from the latest Carlton acquisition. The new clean succinct
style was developed to enhance our digital offering with a data and
image rich environment to serve self-builders, architects,
specifiers, contractors, house builders and students.
MANAGEMENT SYSTEMS
During 2017 we completed the integration of our quality and
environmental systems for the existing four manufacturing sites
giving us one combined system. The integration of Carlton into this
group system commenced during the second half of the year.
Alongside this process we also commenced updating our ISO 9001 and
ISO 14001 documentation to comply with the revised standards. The
Group delivered compliance with EU-ETS carbon emission and our
successful ISO 50001 Energy management objectives achieved ESOS
compliance.
In May 2017, the Group was honoured and delighted to be invited
as a guest of RoSPA, to the Queen's Garden Party at Buckingham
Palace. The Group is a member of RoSPA and supports the excellent
work that it does. The invitation was in recognition of this and
the health and safety performance demonstrated during RoSPA's
audits of the Group's factories.
STAFF DEVELOPMENT
The planned enhancement of our Group HR department was completed
with the redeployment of existing staff. The new focused team
embarked on a very successful series of roadshows around the Group
engaging and consulting with all staff on various HR matters, not
least the promotion of the workplace pension. It is pleasing to
note that very few employees chose to opt out of the Group pension
scheme.
The Group added to its operations team towards the end of the
year, bringing in specialist skills to focus on materials
procurement and product development. This decision is already
delivering material input cost savings, manufacturing synergies and
innovation of new and exciting products for future markets.
LANDFILL AND LAND ASSETS
There were no landfill operations in the existing void of our
New Acres facility in Telford during 2017. This is in line with the
Group's strategy to maximise future mineral reserves for
brickmaking. Plans for the relocation of the Hadley Road are
progressing well with construction likely to commence in 2019. When
complete this will supply the Blockleys factory with mineral for
around 20 years while expanding the void space further for
recommencement of landfill operations in due course. In addition,
it will open transport links to the already restored land.
Planning permission was granted at the Charnwood quarry to allow
for the importation of clay minerals, which will enable the Group
to import clay commercially, adding to and extending the existing
reserves. The permission also includes a re-worked low-level
restoration scheme that will be beneficial for future alternative
development.
The acquisition of Carlton brings further underlying long term
value to the Group's land portfolio adding 93 acres to the land
bank. The current adjacent quarry that forms 47 acres, has a void
of around 2.7 million cubic metres and large clay mineral reserves
of around 3 million cubic metres.
OUTLOOK
The Board is confident that the actions taken at the Michelmersh
and Carlton plants provide the foundations for a much stronger
business in the coming years. The Group's plants operate close to
capacity and, as such, we continue to seek to make advances through
yield improvement and production cost reduction. A range of
operational reviews are under way that are expected to improve
output and the cost of production.
The Group has historically been able to outperform industry
pricing, even at the more difficult high end, by reacting to the
market by bringing new products to market and entering new market
segments. UK brick manufacturing is facing stock shortages, with
demand exceeding supply, and cost inflation. Any margin
improvements that result from these forces will benefit the
Group.
A number of strategic projects are being evaluated with a view
to continuing the development of the Group.
Frank Hanna, Peter Sharp
Joint Chief Executives
19 March 2018
Consolidated Income Statement
For the year ended 31 December 2017
2017 2016
GBP'000 GBP'000
Revenue 37,867 30,057
Cost of sales (24,449) (19,709)
--------------------------------- --------- ---------
Gross profit 13,418 10,348
Administrative expenses
Underlying (7,437) (5,830)
Exceptional reorganisation (137) -
costs
Amortisation of intangibles (1,038) (3)
--------------------------------- --------- ---------
(8,610) (5,833)
Other income 49 36
--------------------------------- --------- ---------
Operating profit 4,857 4,551
Exceptional item - acquisition (1,195) -
costs (see note 3)
Finance (costs)/income (323) 18
--------------------------------- --------- ---------
Profit before taxation 3,339 4,569
Taxation (1,127) (1,010)
Profit for the financial year 2,212 3,559
--------------------------------- --------- ---------
Basic earnings per share 2.64 p 4.38 p
Diluted earnings per share 2.60 p 4.36 p
Consolidated Statement of Comprehensive Income
For the year ended 31 December 2017
2017 2016
GBP'000 GBP'000
Profit for the financial year 2,212 3,559
Other comprehensive income/(expense)
Items which will not subsequently
be classified to profit and
loss
Revaluation surplus of property,
plant and equipment 2,069 1,369
Revaluation deficit of property, (322) -
plant and equipment
Deferred tax on movement (170) 49
----------------------------------------- -------- --------
1,577 1,418
---------------------------------------- -------- --------
Total comprehensive income
for the year 3,789 4,977
----------------------------------------- -------- --------
Consolidated Balance Sheet
As at 31 December 2017
2017 2016
GBP'000 GBP'000
Assets
Non-current assets
Intangible assets 24,086 2,469
Property, plant and equipment 52,626 40,794
-------------------------------- --------- ---------
76,712 43,263
Non-current asset held for
resale - 2,542
Current assets
Inventories 9,161 7,193
Trade and other receivables 6,934 5,052
Cash and cash equivalents 4,128 4,720
-------------------------------- --------- ---------
Total current assets 20,223 16,965
-------------------------------- --------- ---------
Total assets 96,935 60,770
Liabilities
Current liabilities
Trade and other payables 6,462 4,702
Interest bearing liabilities 1,791 -
Corporation tax payable 900 373
Total current liabilities 9,153 4,441
-------------------------------- --------- ---------
Non-current liabilities
Interest bearing liabilities 19,809 -
Deferred tax liabilities 8,590 4,052
-------------------------------- --------- ---------
28,399 4,052
------------------------------- --------- ---------
Total liabilities 37,552 9,127
Net assets 59,383 53,643
-------------------------------- --------- ---------
Equity attributable to equity
holders
Share capital 17,234 16,294
Share premium account 11,495 11,495
Other reserves 20,816 18,410
Retained earnings 9,838 7,444
-------------------------------- --------- ---------
Total equity 59,383 53,643
-------------------------------- --------- ---------
Consolidated Statement of changes in equity
For the year ended 31 December 2017
Share Share Merger Share Revaluation Retained Total
Capital option reserve premium reserve earnings
reserve
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
As at 1 January
2016 16,247 177 979 11,495 15,694 4,627 49,219
Profit for the
year - - - - - 3,559 3,559
Revaluation surplus - - - - 1,369 - (1,369)
Deferred taxation
on revaluation - - - - 49 - 49
---------------------- --------- --------- --------- --------- ------------ ---------- --------
Total comprehensive
income - - - - 1,418 3,559 4,977
Share based payment - 212 - - - - 212
Shares issued
during the year 47 - - - - - 47
Transfer to retained
earnings - (70) - - - 70 -
Dividend paid - - - - - (812) (812)
---------------------- --------- --------- --------- --------- ------------ ---------- --------
At 31 December
2016 16,294 319 979 11,495 17,112 1,422 53,643
Profit for the
year - - - - - 2,212 2,212
Revaluation deficit - - - - (322) - (322)
Revaluation surplus - - - - 2,069 - 2,069
Released on sale
of land - - - - (1,811) 1,811 -
Deferred taxation
on revaluation - - - - (170) - (170)
---------------------- --------- --------- --------- --------- ------------ ---------- --------
Total comprehensive
income - - - - (234) 4,023 3,789
Shares issued
during the year 940 - 2,444 - - - 3,384
Share based payment - 196 - - - - 196
Dividend paid - - - - - (1,629) (1,629)
---------------------- --------- --------- --------- --------- ------------ ---------- --------
At 31 December
2017 17,234 515 3,423 11,495 16,878 9,838 59,383
---------------------- --------- --------- --------- --------- ------------ ---------- --------
Consolidated Statement of cash flows
For the year ended 31 December 2017
2017 2016
GBP'000 GBP'000
Cash flows from operating activities
Profit before taxation 3,339 4,569
Loss/(profit) on sale of fixed
assets 3 (8)
Finance costs 323 (18)
Depreciation 1,455 1,063
Amortisation 1,038 3
Profit on disposal of intangible (13) -
assets
Market value adjustment on
intangible assets - 4
Share based payment charge 196 212
--------------------------------------- --------- --------
Cash flow from operations before
changes in working capital 6,341 5,825
(Increase)/decrease in inventories (50) 35
Decrease/(increase) in receivables 1,346 (744)
(Decrease)/increase in payables (768) 537
--------------------------------------- --------- --------
Net cash generated by operations 6,869 5,653
Taxation paid (1,760) (905)
Net cash generated by operating
activities 5,109 4,748
--------------------------------------- --------- --------
Cash flows from investing activities
Purchase of subsidiary undertaking (23,698) -
net of cash acquired (see note
3)
Purchase of property, plant
and equipment (1,002) (2,254)
Proceeds of sale of investments - 30
Proceeds of sale of intangibles 155 -
Proceeds of sale of land 2,680 -
Proceeds of disposal of property,
plant and equipment 11 8
--------------------------------------- --------- --------
Net cash used in investing
activities (21,854) (2,216)
--------------------------------------- --------- --------
Cash flows from financing activities
Proceeds of loan drawdown 24,000 -
Interest (paid)/received (323) 18
Repayment of interest bearing (5,899) -
borrowings
Proceeds of share issue 4 47
Dividend paid (1,629) (812)
--------------------------------------- --------- --------
Net cash generated by/(used
in) financing activities 16,153 (747)
--------------------------------------- --------- --------
Net (decrease)/increase in
cash and cash equivalents (592) 1,785
Cash and cash equivalents at
the beginning of the year 4,720 2,935
--------------------------------------- --------- --------
Cash and cash equivalents at
the end of the year 4,128 4,720
--------------------------------------- --------- --------
Cash and cash equivalents comprise:
Cash at bank and in hand 4,128 4,720
Bank overdraft - -
-------------------------------------- --------- --------
4,128 4,720
-------------------------------------- --------- --------
NOTES TO THE FINANCIAL STATEMENTS
1. ACCOUNTING POLICIES
The consolidated financial statements have been prepared in
accordance with International Financial Reporting Standards as
adopted by the European Union ("IFRSs as adopted by the EU"), IFRS
Interpretations Committee interpretations and with those parts of
the Companies Act 2006 applicable to companies reporting under
IFRS. There have been no changes to the accounting policies adopted
since the last consolidated financial statements were
published.
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 2017 or 2016. The
financial information has been extracted from the Group's statutory
financial statements for the years ended 31 December 2017 and 2016.
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 2016 have
been delivered to the Registrar of Companies, whereas those for the
year ended 31 December 2017 will be delivered to the Registrar of
Companies following the Company's Annual General Meeting.
The financial information is presented in sterling and all
values are rounded to the nearest thousand pounds (GBP000) except
when otherwise indicated.
3. ACUISITION OF SUBSIDIARY
On 23 June 2017, the Group acquired 100% of the issued share
capital of Carlton Main Brickworks Limited ("Carlton"). Carlton is
a clay brick manufacturer based in Barnsley, South Yorkshire and
the acquisition has significantly increased the Group's
manufacturing capacity and provided access to a wider geographical
market for the expanded Group output.
The amounts recognised in respect of the identifiable assets
acquired and liabilities assumed are set out in the table
below:
GBP000
---------------------------------------------- --------
Inventory 1,391
Debtors and prepayments 3,708
Property, plant and equipment 10,600
Identifiable intangible assets 18,186
Cash in hand 7,453
Financial liabilities (3,253)
Deferred taxation (4,665)
---------------------------------------------- --------
Total identifiable net assets 33,420
Goodwill 4,611
---------------------------------------------- --------
Total consideration 38,031
---------------------------------------------- --------
Satisfied by:
Cash 31,151
Shares in Michelmersh Brick Holdings
Plc 3,380
Deferred consideration 3,500
---------------------------------------------- --------
38,031
---------------------------------------------- --------
Cash outflow arising on acquisition 31,151
Cash acquired (7,453)
---------------------------------------------- --------
Net cash outflow on acquisition 23,698
---------------------------------------------- --------
Acquisition related costs of GBP1.2 million
are disclosed as an exceptional item in the
Income Statement.
4. EARNINGS PER SHARE
Basic
The calculation of earnings per share from continuing operations
based upon the profit for the year of GBP2,212,000 (2016:
GBP3,559,000) and 83,913,140 (2016: 81,259,280) 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 GBP2,212,000
(2016: GBP3,559,000) and 85,051,210 (2016: 81,638,385) weighted
average number of ordinary shares.
5. REPORT & 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 and from the Company's registered office at
Freshfield Lane, Danehill, Haywards Heath, West Sussex RH17
7HH.
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR JFMTTMBABBBP
(END) Dow Jones Newswires
March 19, 2018 03:00 ET (07:00 GMT)
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