Michelmersh Brick (MBH) H2 2025 earnings summary

Executive summary

• Revenue declined 1.7% year-over-year to £68.9m, reflecting robust UK sales offset by challenging European markets and operational disruptions from site relocations.

• Adjusted operating profit fell 16.8% to £8.4m, with adjusted EBITDA down 11.4% to £12.4m and margin at 18.0%.

• Maintained market share in the UK and continued to prioritize premium products and deep customer relationships.

• Net debt stood at £0.7m, maintaining a strong balance sheet with a £20m borrowing facility available.

• Emphasized adaptability and flexibility in response to ongoing macroeconomic and geopolitical uncertainties.

Financial highlights

• Gross margin decreased to 34.5% from 35.8% year-over-year.

• Adjusted profit before tax was £8.1m, down 18.2% from the prior year.

• Net assets at £93.0m, NAV per share at 102.6p, with shares trading at a significant discount.

• Net cash generated from operations was £10.9m, with operational cash flow conversion just under 90% of EBITDA.

• £4.4m paid in dividends and £2.0m returned via share buybacks, reducing EPS dilution by ~7% over three years.

Outlook and guidance

• Challenging pricing environment expected to persist into 2026, with stable pricing as a target.

• Order intake volumes at the start of 2026 are ahead of manufacturing capacity, but confidence in order predictability has weakened.

• Early signs of improvement in Belgian operations in Q1 2026, but not yet at 2022 levels.

• Over 75% of 2026 energy requirements hedged.

• CapEx expected to normalize at around £3m per year after two years of elevated investment.