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Michelmersh profits pile up on the back of Carlton acquisition
AIM-quoted tile and paver manufacturer Michelmersh Brick returned a solid annual report card on Monday as a result of a strong showing by its most recent acquisition and an improved premium bricks market.
Carlton, which cost Michelmersh a total of £31.2m back in June 2017, was the main driving force behind the firm's 26% jump in revenue to £37.9m over the year ended 31 December, and the 42% higher EBITDA of £7.33m.
Although pre-tax profits fell to £3.34m due to costs associated with the Carlton plant's integration, Michelmersh added that prospects for the year to come were even stronger, having already built its forward order book to 60m units.
Brick manufactures across the UK have been facing shortages of stock as demand continues to exceed supply and cost inflation, according to Michelmersh, which the group - that was already capable of charging a premium due to its historical product innovation - said should help its margins moving forward.
Earnings per share increased 34% over the prior trading period to 5.9p.
As of 31 December, Michelmersh had net debt of £17.5m, a marked increase from the £4.7m reported twelve months earlier.
After the resignation of Eric Gadsden from the group's board in May 2017, Michelmersh kicked off a recruitment process aimed at appointing a further non-executive director, which culminated in Stephen Bellamy's addition post-period end in February 2018.
Martin Warner, chairman of Michelmershsaid, "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," he concluded.
Michelmersh upped its dividend for the trading year by 7.5% to 2.15p.
As of 0920 GMT, shares had grown 7.69% to 84.00p.