Information  X 
Enter a valid email address

Michelmersh Brick (MBH)

  Print   

Wednesday 30 March, 2022

Michelmersh Brick

Final Results

RNS Number : 4719G
Michelmersh Brick Holdings PLC
30 March 2022
 

30 March 2022

Michelmersh Brick Holdings Plc

("MBH", the "Company", or the "Group")

Preliminary results for the year ended 31 December 2021

Strong performance surpassing record adjusted 2019 financial year and positive momentum into FY22

Michelmersh Brick Holdings Plc (AIM: MBH), the specialist brick manufacturer, is pleased to report its preliminary results for the year ended 31 December 2021.

Financial Highlights:

 

 

31 Dec 2021

 

 

31 Dec 2020

 

31 Dec 2019

 

Growth -  FY21 on FY20

Growth - FY21 on FY19

 

Statutory results

 

 

 

 

 

 

 

Revenue

 

  £59.5m

  £52.0m

  £53.5m

14.4%

11.2%

 

Gross margin

40.7%

41.3%

40.9%

(0.6%)

(0.2%)

 

Operating profit

£9.9m

£7.6m

£11.1m

30.3%

(10.8%)

 

Profit before tax

£9.7m

£6.9m

£10.4m

40.6%

(6.7%)

 

Basic earnings per share

6.50p

5.27p

9.41p

23.3%

(30.9%)

 

Cash from operations

£15.8m

£12.9m

£16.6m

22.5%

(4.8%)

 

Net cash/(debt)

£7.7m

£0.8m

(£6.3m)

up £6.9m on 31 Dec 2020

 

 

 

 

 

 

 

 

Adjusted results*

 

 

 

 

 

 

Adjusted EBITDA1

 

  £14.7m

  £12.3m

  £13.6m

19.5%

8.1%

 

Adjusted operating profit

   £11.1m

£8.8m

  £10.3m

26.1%

7.8%

 

Adjusted profit before tax

 

  £10.9m

  £8.0m

  £9.6m

36.3%

13.5%

 

Adjusted earnings per share

 

9.33p

6.28p

8.41p

48.6%

10.9%

 

                 

Strategic and Financial Highlights:  

· Excellent performance in 2021, with adjusted results for the year ahead of record 2019 pre-Covid-19 comparison across all key adjusted financial metrics

· Focused management of production efficiency and cost base supporting continued strong gross margin performance

· Strong operational cash generation supported capital investment with the completion of the new road at the Telford quarry to access long term clay mineral reserves  

· Published comprehensive sustainability report and road map to achieving carbon neutrality

· New £20.0m bank facility provides financing flexibility, capacity for further strategic investments and for pursuing acquisition opportunities

· Final dividend per share of 2.50p resulting in full year dividend of 3.65p, up 46% on 2020, demonstrating commitment to progressive dividend policy and the directors' confidence in the outlook of the Group

 

Outlook:

· Positive end market fundamentals expected to continue for new housing, commercial and key repair, maintenance and improvement (RMI) markets

· Energy price hedging in place with over 90% of our expected requirements secured for 2022

· FY21 EBITDA margin is reflective of our medium-term target of maintaining margins at or around 25.0%.

· Strong and well-balanced opening order book for 2022 with positive order intake momentum continuing in the first quarter of FY22.

Commenting on the results, Martin Warner, Chairman of Michelmersh Brick Holdings Plc, said:

"I am pleased to report on a very successful year for the Group, with the delivery of strong revenue and profit surpassing our 2019 pre-Covid-19 record adjusted results performance.

"We are operating in a sector which is fundamental to the post Covid recovery. We have entered 2022 with a strong and balanced order book and are continuing to see positive order intake momentum from our broad customer base with high demand across all our key markets. The ongoing Covid pandemic, together with the elevated inflation risks in the UK economy, mean that we operate in a more challenging environment as we enter the new financial year. However, we remain focused on delivering a quality product and service to our customers and have worked collaboratively to deliver price increases across our premium portfolio to offset higher cost inflation.   

"The positive momentum and the benefits from the longer-term fundamentals in our sector provide a resilient foundation given the current uncertain macroeconomic conditions and the Board remains confident in the strategic outlook of the business. "

* The Directors believe that adjusted measures provide a more useful comparison of business trends and performance. Adjusted results exclude exceptional items which include costs associated with acquisitions and the amortisation of acquired intangibles. The term adjusted is not defined under IFRS and may not be comparable with similarly titled measures used by other companies. .Adjusted performance results are reconciled with statutory results in the table below.

1 EBITDA is defined as earnings before interest, tax, depreciation and amortisation.

An analyst briefing will be held virtually at 9:30am today and can be accessed via the following link: https://event.webcasts.com/starthere.jsp?ei=1532779&tp_key=d72124d5a8  

Michelmersh Brick Holdings Plc

Frank Hanna, Joint Chief Executive Officer

Ryan Mahoney, Chief Financial Officer

Tel: +44 (0)1825 430 412

Canaccord Genuity Limited (NOMAD and Joint Broker)

Bobbie Hilliam

Max Hartley

Georgina McCooke

Tel: +44 (0)20 7523 8000

 

Berenberg (Joint Broker)

Richard Bootle

Detlir Elizi

Kate Hanshaw

Tel: +44 (0)20 3207 7800

Yellow Jersey PR

Charles Goodwin

Annabel Atkins

Tel: +44 (0)7747 788 221

Tel: +44 (0)7983 557 851

 

The information contained within this announcement is deemed to constitute inside information as stipulated under the UK Market Abuse Regulations. Upon the publication of this announcement, this inside information is now considered to be in the public domain.

About Michelmersh Brick Holdings PLC:

Michelmersh Brick Holdings PLC is a business with seven market leading brands: Blockleys, Carlton, Charnwood, Freshfield Lane, Michelmersh, Floren and Hathern Terra Cotta. These divisions operate within a fully integrated business combining the manufacture of clay bricks and pavers. The Group also includes a landfill operator, New Acres Limited, and seeks to develop future landfill and development opportunities on ancillary land assets.

 

Established in 1997, the Company has grown through acquisition and organic growth into a profitable and asset rich business, producing over 125 million clay bricks and pavers per annum. Michelmersh currently owns most of the UK's premium manufacturing brick brands and is a leading specification brick and clay paving manufacturer.

 

Michelmersh strives to be a well invested, long term, sustainable, environmentally responsible business. Opportunity, training and security for all employees, whilst meeting the needs of stakeholders are at the forefront of everything we do. We aim to lead the way in producing some of Britain's premium clay products and enhancing our environment by adding value to the architectural landscape for generations to come.

 

We are Michelmersh Brick Holdings PLC: we are "Britain's Brick Specialist".

 

Please visit the Group's websites at:   www.mbhplc.co.uk  and www.bimbricks.com

 

Joint Chief Executive Officers' Statement

We are delighted to present a very strong set of results for our 2021 financial year and to report on further progress against our key strategic objectives. These results have been supported by the backdrop of a buoyant construction sector and strong fundamentals in our end markets, which importantly remain well backed by Government policy due to the sustained shortage and requirement for quality new housing.

Whilst we continued to experience elements of disruption to our operations over the period, we successfully adapted to this 'new normal' in our operating rhythm. At various stages during 2021 we adhered to the 'working from home' guidance for our support service teams as we looked to prioritise the safety of our operational teams who remained on site throughout the year. Once again, we would like to thank all our staff for their support and enduring dedication. It is due to their commitment that we have been able to maintain production and despatch operations to support our customers and deliver consistent results throughout the year.

The production capacity of the UK brick manufacturing industry remains constrained when set against the wider demand and with record low stocks these sector dynamics are very supportive of our medium-term strategy. The Group continues to focus on manufacturing and delivering the highest quality brick and paver premium centric products to our customers. This underpins our average selling prices consistently being at a premium to the wider market and ensures our ability to consistently sell all the product we make, underlining our strong and sustainable profit margins. The strength of our customer relationships was also a key factor in successfully introducing measured forecast price increases across our portfolio at the start of September 2021. Working closely with our customers throughout this process, we continue to see strong demand from across our customer base.  

As we enter 2022, the ongoing higher inflation environment continues to impact supply chain and input costs and the Group is working hard to manage these costs. Given the high energy requirements for brick manufacturing, our energy price hedging policy remains incredibly important to ensure that we are well placed to manage the impact of gas price volatility over the medium term, with our requirements materially hedged for 2022 with further contracts into 2024. We will remain watchful of higher input costs and will respond in collaboration with our customers, if necessary, to ensure that we are well placed to manage any further margin pressures.  

The backdrop of the supportive trading environment, our financial performance and strong balance sheet have allowed us to deliver on our core business priorities and ensure that we can continue to invest in the Group and have highly efficient manufacturing facilities. We completed the work on the new road at Telford over the summer and this investment allows access to the remaining clay reserves which will support brick manufacturing at Blockleys for decades to come. In January 2021 the option agreement for mineral in land adjacent to the Michelmersh brickworks was exercised, securing minerals for at least 15 years of brickmaking on the site, whilst in the fourth quarter we started work to increase kiln drying capacity at Carlton which we completed at the start of 2022 to support further production efficiencies.

The business will continue to invest in projects that address our strategic objectives to expand the manufacturing capacity, support continuous improvements in production efficiency, de-risk processes and deliver long-term sustainability through enhanced reporting and a deliverable sustainability roadmap. Our new bank facility, which is available in both Sterling and Euro denomination, will provide us with further financial flexibility and means we are well positioned to respond quickly and pursue wider strategic initiatives, including value enhancing acquisitions.

The return to our progressive dividend policy with a record full year dividend of 3.65 pence per share underlines our confidence in the consistent cash generation capability and positive outlook for the business. All of this leaves us well positioned to deliver further strategic progress in 2022 and beyond.

Sustainability

The Group was proud to release our 2021 Sustainability Report. The Report offers an insightful and detailed account of our established practices and the plans for achieving Net Zero carbon emissions by 2050. We are determined to continue to be the sustainable face of clay brick manufacturing through a dedicated Sustainability Group and Net Zero Steering Group, we have already undertaken numerous projects to minimise environmental impact and increase already efficient production methods with state-of-the-art technology, reporting systems and quality standards. Measured, positive incremental changes will be the core focus on achieving the Groups ambitions.

Building on the platform of the "Think Longer" campaign, the Group released a timeline of progressive goals dedicated to reducing the carbon emissions created by brick production. With solar farms and wind turbines already supplying electricity at our facilities, our efforts are redoubled with the use of rainwater harvesting methods, as well as leading the industry with our reduction of plastic packaging. The Group is also championing the use of circular solutions where possible in production, where clay waste and other recycled materials can be put back into the production process, whilst also being recyclable once the production building has reached the end of its life. This further reduces the Group's impact on the environment by reusing waste and continuing to extend the life of our products. With brick's low level of maintenance and operational carbon, coupled with efforts to de-carbonise the production and therefore the embodied carbon, the full life cycle assessment of the Group's clay bricks will be significantly reduced and there will be no match that is as environmentally friendly in the construction market.

Award Winning

2021 was another successful year in terms of industry award recognition. We were delighted to be involved in the coveted Stirling Prize winning project this year with Kingston University by Grafton Architects, proudly showcasing our Freshfield Lane First Quality Multi products on its prominent facades.

In addition, London's Spitalfield Fruit and Wool Exchange demonstrates how successful off-site modern methods of construction have evolved for highly dense urban sites. This 460,000 square feet, 6 storey high-quality office and retail space features our Charnwood handmade Thulston Winnington blend and Renovated Steel Grey bricks for the design by Bennet Associates and Sheppard Robson Architects into pre cast panels to provide superior quality.

Awarded BREEAM excellent rating for sustainability the University of Winchester uses our Freshfield Lane products in the design by Design Engine Architects which has been coined the "new iconic gateway building to the city".

As Britain's Brick Specialists, the Group aims to inspire beautiful, comfortable safe and sustainable architecture that will enhance our built environment for generations to come.

Charity

We have built a long track record of the importance we place in our commitment to charities and we continue to see this as one of the fundamental ongoing principles of our Corporate and Social Responsibility (CSR). As we highlighted last year, we introduced a new initiative at the beginning of the year where staff could nominate two principal charities for the year. The charities selected by our people were Mind, the England and Wales charity specialising in supporting anyone experiencing mental health problems; and The Trusell Trust a charity focusing on the nationwide food bank network to support people in food poverty. We were very pleased to support these two staff nominated charities both of whom received donations and promotion via our social media platform. 

Alongside the two key charities discussed above we also supported twelve other charities during 2021 with contributions to national and local charities across the country donating funds, food products, children's toys, resources and range of our own clay products to various charities and institutions across the UK.

 

Supporting Education

The Group was proud to announce its continued funding for educational institutions via its 'Pledge 100' initiative. Supporting industry education and training, including bricklayers and architectural design courses, remains one of our core commitments

Having supported colleges for many years, the Group officially launched its initiative 'Pledge 100' in 2020 to encourage youth training in skill-based occupations and those embarking on careers in the construction industry. With the industry facing a shortage of skilled labour, with gaps in funded support across all sectors of construction, additional assistance is vital in order to encourage the next generation to apply for construction-focused employment.

Yet again 2021 proved a very testing year for education with many colleges having to re-evaluate how they teach students due to COVID-19. Throughout the period we continued to provide funding and continued professional development support wherever possible and despite the challenges presented in 2021 the Group reached its goal of supplying 100,000 products, distributed to training centres across the UK.

In addition to offering product for students to use in practical applications, we also supplied hundreds of copies of the 'Guide to Successful Brickwork', to vocational training courses.

The Group was also delighted to be supporting the National Skill Build brick laying competitions.

Group Results

We have delivered a strong performance during the year across all of our key financial metrics compared to both the Covid-19-affected 2020 financial year and our more relatable 2019 results, which was a record year for the Group on an adjusted basis.

Financial Highlights

 

 

Year ended

31 Dec 2021

Year ended

31 Dec 2020

Year ended

31 Dec 2019

Growth - FY21 on FY20

Growth - FY21 on FY19

 

Revenue

 

£59.5m

  £52.0m

  £53.5m

14.4%

11.2%

 

Gross margin

40.7%

41.3%

40.9%

(0.6%)

(0.2%)

 

Adjusted* EBITDA1

 

£14.7m

  £12.3m

  £13.6m

19.5%

8.1%

 

Adjusted* operating profit

£11.1m

  £8.8m 

  £10.3m 

26.1%

7.8%

 

Operating profit

 

£9.9m

£7.6m

£11.1m

30.3%

(10.8%)

 

Adjusted profit before tax

 

£10.9m

  £8.0m

  £9.6m

36.3%

13.5%

 

Profit before tax

 

£9.7m

£6.9m

£10.4m

40.6%

(6.7%)

 

Adjusted* basic earnings per share

 

9.33p

6.28p

8.41p

48.6%

10.9%

 

Basic earnings per share

 

6.50p

5.27p

  9.41p

23.3%

(30.9%)

 

                           

 

* The Directors believe that adjusted measures provide a more useful comparison of business trends and performance. Adjusted results exclude exceptional items which include costs associated with acquisitions and the amortisation of acquired intangibles. The term adjusted is not defined under IFRS and may not be comparable with similarly titled measures used by other companies. Adjusted performance results are reconciled with statutory results in the table below.

1 EBITDA is defined as earnings before interest, tax, depreciation, and amortisation

Revenue for the year increased by 14.4% to £59.5 million compared to 2020 (2020: £52.0 million), which, as a reminder, included the impact of the 4-week manufacturing shutdown due to Covid-19, and by 11.2% against the more comparable 2019 financial year (2019: £53.5 million).

This strong revenue growth supported enhanced operational leverage in combination with the focused management of our input costs in the year to deliver operating profit of £9.9 million, which was up 30.3% on 2020 (2020: £7.6 million), and profit before tax of £9.7 million was up 40.6% (2020: £6.9 million). The decrease in operating profit and profit before tax of 10.8% and 6.7% respectively when compared to 2019 was due to the inclusion of the one-off accounting adjustment to reflect the bargain purchase treatment of our Floren acquisition. These results underline the Company's core operating fundamentals of focusing on production efficiency and generating maximum returns from the existing business, as well as the benefit of reduced finance costs from the voluntary repayment of £10.0 million of borrowings at the end of the 2020 financial year and a further £10.0 million at the end of the third quarter of 2021. 

On a reported basis, the results include the impact of the amortisation of acquired intangibles, and on an adjusted basis to remove the impact of these items, adjusted EBITDA of £14.7 million is ahead by 19.5% and 8.1% against 2020 and 2019 respectively (2020: £12.3 million, 2019: £13.6 million), supporting a strong adjusted EBITDA margin of 24.7%. The EBITDA margin is reflective of our medium-term target of maintaining our margins at or around 25.0% and particularly this year includes managing the significant inflation increases in our cost inputs as well as the benefits of our energy hedging policies. 

After a tax charge of £3.6 million (2020: £1.9 million), the Group recorded a profit for the period after tax of £6.1m (2020: £4.9 million). The tax rate of 36.8% includes the impact from the adjustment of the Group's net deferred tax liabilities following the change announced in the UK Government's 2021 Budget that will increase the standard rate of UK corporation tax from 19% to 25% which is effective from 1 April 2023, offset by the super deduction on qualifying capital expenditure in the year. Excluding these timing differences the adjusted tax charge was £2.1m, representing an effective tax rate of 21.5% which is more indicative of the Group's expected annual tax rate.

As a result, basic earnings per share increased by 23.3% to 6.50p (2020: 5.27p) and on an adjusted basis the like-for-like comparison to 2019 was an increase of 10.9% to 9.33p (2019: 8.41p).

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

Year ended

Growth - FY21 on

FY20

Growth -

 

31 Dec

2021

31 Dec 2020

31 Dec 2019

FY21 on FY19

 

£000

£000

£000

 

 

Operating profit

9,920

7,584

11,065

30.3%

(10.8%)

Adjustments:

 

 

 

 

 

Floren acquisition a

-

-

(1,907)

 

 

Amortisation of acquired intangibles b

1,198

1,170

1,166

 

 

Adjusted operating profit

11,118

8,754

10,324

26.1%

7.8%

Depreciation

3,583

3,544

3,313

 

 

Adjusted EBITDA

14,701

12,298

13,637

19.5%

8.1%

Finance costs

(223)

(713)

(698)

 

 

Depreciation

(3,583)

(3,544)

(3,313)

 

 

Adjusted profit before taxation

10,895

8,041

9,626

36.3%

13.5%

 

 

 

 

 

 

Basic earnings per shares

6.50p

5.27 p

9.41 p

23.3%

(30.9%)

Adjusted basic earnings per share b

9.33p

6.28 p

8.41 p

48.6%

10.9%

 

 

 

 

 

 

a Includes adjustments to cost of sales and exclusion of Floren acquisition related costs and bargain purchase.

b Includes adjustments to exclude amortisation of acquired intangibles

Net Cash and Working Capital

Cash generated from operations for the year was £15.8 million, compared to £12.9 million in 2020, benefiting from the consistent positive trading across the year and the resolute focus on maximising our working capital efficiency. Operating cash conversion from adjusted EBITDA was 107.5% compared to 104.8% and 122.1% in 2020 and 2019 respectively, reflecting the consistent quality of the fundamental cash generating ability of the business. 

 

 

Year ended

31 Dec 2021

Year ended

31 Dec 2020

Year ended

31 Dec 2019

 

 

 

Net cash generated from operations

 

£15.8m

  £12.9m

  £16.6m

 

 

 

Tax paid

(£2.3m)

(£2.5m)

(£2.1m)  

 

 

 

Interest paid

 

(£0.2m)

  (£0.7m)

  (£0.7m)

 

 

 

Purchase of property, plant and equipment

(£4.2m)

  (£1.2m) 

(£2.4m) 

 

 

 

Proceeds from debt drawdowns

 

-

£3.0m

£5.1m

 

 

 

Debt repaid

 

(£10.7m)

  (£13.0m)

  (£2.0m)

 

 

 

Proceeds from share issue

 

£0.4m

£0.1m

£4.7m

 

 

 

Acquisition of Floren (net of cash)

 

-

-

(£6.2m)

 

 

 

Lease payments

 

(£0.5m)

(£0.7m)

(£0.6m)

 

 

 

Dividend paid

 

(£1.9m)

(£0.8m)

(£2.5m)

 

 

 

Net (decrease)/increase in cash and cash equivalents

 

(£3.6m)

(£2.9m)

£9.9m

 

 

 

Net cash/(debt) before lease liabilities

 

£7.7m

£0.8m

  (£6.3m)

 

 

 

                       

 

At the year end the Group had net cash of £7.7 million being cash of £8.5 million less bank debt of £0.8 million (2020: £0.8 million; 2019: debt of £6.3 million). As we indicated during our half year results, the Group repaid the remaining UK borrowings with the early repayment of the remaining £10.0 million of debt at the end of our third quarter. The bank debt of £0.8 million represents the remaining borrowings in Floren which we will continue to amortise in line with our scheduled repayments given the current interest rate environment in Europe.

During the year we entered into a new Sterling and Euro denominated bank facility of £20.0 million (2020: £9.0 million), which is committed to 22 December 2024, with a further two 1-year extension options.

As we enter 2022, our consistent operating cash generation, net cash position and strong balance sheet provide us with the capacity to continue to invest in the business to support both capital initiatives and our commitment to maintaining our progressive dividend policy. Alongside the decision to withdraw the scrip dividend we will be commencing a programme to fund the purchase of our own shares, through an 'Employee Benefit Trust' ("EBT"), in order to meet the future obligations of the LTIP and SAYE schemes rather than these obligations being settled through new share issuances as they have been previously.

Our long-term policy is to maintain a strong financial position and keep the target ratio of net debt to adjusted EBITDA under one and a half times.  

Property, plant and equipment

Capital expenditure in the year was principally focused on the completion of the new road at Telford. The works, which began at the end of 2020, were completed over summer and this construction activity and investment is fundamental to the Group as the road diversion will facilitate the release of the remaining mineral reserves on the site to support the long-term operations at the Blockleys plant, as well as releasing land for alternative use. Additionally, at the start of the year we exercised an option agreement for mineral land adjacent to the Michelmersh brickworks securing minerals for at least 15 years of brickmaking on the site and in the final quarter we commenced the project to add more kiln drying capacity at our site at Carlton which we completed in the first quarter of 2022.

Dividend

Following the disruption caused by Covid-19 and the resulting wider uncertain economic outlook, the Board took the decision to cancel the final dividend for 2019 and was pleased to announce the return to our progressive dividend policy with the proposal alongside our 2020 year-end results of a single dividend of 2.5 pence per ordinary share to shareholders in respect of 2020.

Reflecting the continued commitment to our progressive dividend policy and our confident outlook for the business, the Board is recommending a final dividend of 2.50 pence per share, which, together with the 1.15 pence per share interim dividend, gives a total dividend of 3.65 pence per share, up 46% on last year. The proposed dividend will be paid on 13 July 2022 to members on the register on 6 June 2022. After reviewing the take-up rate of the scrip alternative dividend option, the Company has decided to withdraw this option effective from the final 2021 dividend onwards .  

The Board

At the AGM on 3 June 2021, and announced in our 2020 annual report and accounts, Bob Carlton-Porter and Stephen Morgan, two long-standing and valued members of the Board, retired from the Company. Once again, we would like to thank them for their support and contribution over a combined 28 years' service to the Company.

Alongside the retirements of Bob and Stephen, Ryan Mahoney was appointed to the Board as Chief Financial Officer. We are delighted to welcome Ryan to the Group; his significant financial and operational experience and expertise will be highly valuable in helping the business continue on its growth path. Ryan joined us from Avon Protection, the FTSE 250 defence engineering and manufacturing group, where he had been Deputy Chief Financial Officer since April 2018. Prior to that, Ryan had been Group Financial Controller for Unite Students, the FTSE 250 property group, since November 2015, and before then held other senior finance roles within the business.

The Board has been through a period of significant transition with both Paula Hay-Plumb and Tony Morris joining the Board in 2020, and with Ryan's appointment in June of this financial year. We look forward to a period of stability in the Board membership as we look to continue to grow the business and deliver on the wider strategy.

Outlook

We have built a strong record of consistently delivering against our strategic priorities of overseeing well-maintained and efficient operations that manufacture the highest quality premium brick products for our customers. Our positive medium-term outlook is underpinned by the quality of our product portfolio and the strength of our customer and distributor relationships and, as a result, we enter 2022 with a strong well-balanced forward order book, covering multiple channels from RMI, housing to commercial, social and specification projects.

We are very well placed at the premium end of the brick market in the UK and Benelux markets. The long-term fundamentals of these markets are positive, with brick continuing to be the façade material of choice due to its longevity, sustainable and energy efficiency qualities, low-cost base and broad aesthetic appeal. The inherent brick manufacturing shortfall in the UK market continues to support our premium centric product portfolio and the Government is consistently targeting construction targets that are set at historic highs.

Importantly, the strength of our balance sheet provides us with financial resilience and also gives us flexibility to pursue acquisition opportunities where they meet our commercial and financial criteria as we target attractive opportunities that complement the existing portfolio.

The Group's 2021 positive performance has continued into the early part of 2022, with the positive wider sentiment in our end markets from both new UK housing and the RMI market expected to continue. With the elevated inflation risks across our manufacturing cost base we will continue to monitor the appropriateness of our portfolio pricing to ensure that we are in a position to offset any further margin pressures. Hedging the costs of our future expected energy requirements remains an important strategy for the Group to mitigate the inflation risks and we have secured over 90% of the Group's energy requirements for 2022 with further energy contracts in place for a portion of our expected requirements in 2023 and 2024 in line with this risk based approach.

The Group continues to operate on the basis of maintaining a strong, well-balanced forward order book, loyal customer and distributor relationships supported by the ongoing demand from the specification, housing, RMI and commercial sectors. Given the current uncertain macroeconomic conditions these quality fundamentals in our business provide resilience and underpin our outlook and as a result we are well placed to continue our strategic progress in 2022 and beyond.

Frank Hanna and Peter Sharp

Joint Chief Executive Officers

 

 

Consolidated Income Statement

for the year ended 31 December 2021

 

 

2021

 

 '000

2020

 

£'000

Revenue
 

 

59,524

52,044

 

Cost of sales

 

(35,369)

(30,525)

 

Gross profit

 

24,155

21,519

Administrative expenses

 

(13,398)

(12,840)

Amortisation of intangibles

 

(1,198)

(1,170)

 

 

(14,596)

(14,010)

Other income

 

361

75

Operating profit

 

9,920

7,584

Finance expense

 

(223)

(713)

Profit before taxation

 

9,697

6,871

Taxation

 

(3,568)

(1,938)

Profit for the financial year

 

6,129

4,933

Basic earnings per share attributable to the equity holders of the company

 

6.50p

5.27p

Diluted earnings per share attributable to the equity holders of the company

 

6.27p

4.95p

 

 

 

Consolidated Statement of Comprehensive Income

for the year ended 31 December 2021

 

 

2021

 '000

2020

£'000

Profit for the financial year

 

6,129

4,933

Other comprehensive income/(expense)

 

 

 

Items which may subsequently be reclassified to profit or loss

 

 

 

Currency movements

 

(216)

66

Items which will not subsequently be reclassified to profit or loss

 

 

 

Revaluation deficit of property, plant and equipment

 

(2,855)

(3,710)

Revaluation surplus of property, plant and equipment

 

4,125

  1,571

Tax credit on exercise of options

 

274

-

Deferred tax on revaluation movement

 

(1,404)

280

 

 

(76)

(1,793)

Total comprehensive income for the year

 

6,053

3,140

 

 

 

Consolidated Balance Sheet

as at 31 December 2021

Assets

 

 

 

Non-current assets

 

 

 

Intangible assets

 

20,222

21,420

Property, plant and equipment

 

63,205

60,948

 

 

83,427

82,368

Current assets

 

 

 

Inventories

 

10,060

10,046

Trade and other receivables

 

10,551

11,189

Corporation tax receivable

 

190

-

Cash and cash equivalents

 

8,467

12,243

Total current assets

 

29,268

33,478

Total assets

 

112,695

115,846

Liabilities

 

 

 

Current liabilities

 

 

 

Trade and other payables

 

11,636

12,049

Lease liabilities

 

491

530

Interest bearing borrowings

 

143

986

Corporation tax payable

 

-

240

Total current liabilities

 

12,270

13,805

Non-current liabilities

 

 

 

Interest bearing borrowings

 

642

10,487

Lease liabilities

 

117

240

Deferred tax liabilities

 

14,542

11,663

 

 

15,301

22,390

Total liabilities

 

27,571

36,195

Net assets

 

85,124

79,651

Equity attributable to equity holders

 

 

 

Share capital

 

19,127

18,789

Share premium account

 

16,536

15,827

Reserves

 

21,763

21,581

Retained earnings

 

27,698

23,454

Total equity

 

85,124

79,651

 

 

 

 

Consolidated Statement of Changes in Equity

for the year ended 31 December 2021

 

Share capital

Other reserves

Share premium

Retained
earnings

Total

 

£'000

£'000

£'000

£'000

£'000

As at 1 January 2020

18,498

23,192

15,545

18,868

76,103

Profit for the period

-

-

-

4,933

4,933

Revaluation deficit

-

(3,710)

-

-

(3,710)

Revaluation surplus

-

1,571

-

-

1,571

Deferred tax on revaluation

-

280

-

-

280

Currency difference

-

66

-

-

66

Total comprehensive income

-

(1,793)

-

4,933

3,140

Transfer between reserves

-

66

-

(66)

-

Share based payment

-

1,099

-

-

1,099

Released on maturity of options

200

(983)

-

783

-

Shares issued during the year

44

-

86

-

129

Dividend paid

47

-

196

(1,064)

(821)

As at 31 December 2020

18,789

21,581

15,827

23,454

79,651

Profit for the period

-

-

-

6,129

6,129

Revaluation deficit

-

(2,855)

-

-

(2,855)

Revaluation surplus

-

4,125

-

-

4,125

Tax credit on exercise of options

-

274

-

-

274

Deferred tax on revaluation

-

(1,404)

-

-

(1,404)

Currency difference

-

(216)

-

-

(216)

Total comprehensive income

-

(76)

6,129

6,053

Share based payment

-

882

-

-

882

Released on maturity of options

160

(624)

-

464

-

Shares issued during the year

114

-

307

-

421

Dividend paid

64

-

402

(2,349)

(1,883)

As at 31 December 2021

19,127

21,763

16,536

27,698

85,124

 

 

 

Consolidated Statement of Cash Flows

for the year ended 31 December 2021

 

 

2021

 '000

2020

£'000

Cash flows from operating activities

 

 

 

Profit before taxation

 

9,697

6,871

Loss on sale of fixed assets

 

-

119

Finance expense

 

223

713

Depreciation

 

3,583

3,544

Amortisation

 

1,198

1,170

Share based payment charge

 

882

899

Cash flows from operations before changes in working capital

 

15,583

13,316

Decrease/(increase) in inventories

 

12

(234)

Decrease/(increase) in receivables

 

638

(2,422)

(Decrease)/increase in payables

 

(412)

2,223

Net cash generated by operations

 

15,821

12,883

Taxation paid

 

(2,250)

(2,501)

Net cash generated by operating activities

 

13,571

10,382

Cash flows from investing activities

 

 

 

Purchase of property, plant and equipment

 

(4,228)

(1,241)

Net cash used in investing activities

 

(4,228)

(1,241)

Cash flows from financing activities

 

 

 

Proceeds of loan drawdown

 

-

3,000

Lease payments

 

(530)

(656)

Repayment of interest-bearing liabilities

 

(10,688)

(12,977)

Interest paid

 

(223)

(713)

Proceeds of share issue

 

421

129

Dividend paid

 

(1,883)

(821)

Net cash used in financing activities

 

(12,903)

(12,038)

Net increase in cash and cash equivalents

 

(3,560)

(2,897)

Cash and cash equivalents at the beginning of the year

 

12,243

15,140

Foreign exchange differences

 

(216)

-

Cash and cash equivalents at the end of the year

 

8,467

12,243

Cash and cash equivalents comprise:

 

 

 

Cash at bank and in hand

 

8,467

12,243

Bank overdraft

 

-

-

 

 

8,467

12,243

 

 

 

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 2021 or 2020. The financial information has been extracted from the Group's statutory financial statements for the years ended 31 December 2021 and 2020. 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 2021 will be filed with the Registrar of Companies following the Company's Annual General Meeting. The statutory accounts for the year ended 31 December 2020 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 6,129,000 (2020: 4,933,000) and 94,305,964 (2020: 93,680,537) 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 6,129,000 (2020: 4,933,000) and 97,684,101 (2020: 99,368,224) weighted average number of ordinary shares.

 

4.  Dividend

 

The Board has recommended a final dividend for the year of 2.5 pence per share, to be paid on 13 July 2022 to shareholders whose names appear of the register of members at the close of business on 6 June 2022. 

 

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  and from the Company's registered office at  Freshfield Lane, Danehill, Haywards Heath, West Sussex RH17 7HH.

 

 

 

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact [email protected] or visit www.rns.com.

RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our Privacy Policy.
 
END
 
 
FR UKSRRUKUOUUR

a d v e r t i s e m e n t