LONDON (Alliance News) - Brick maker and landfill company Michelmersh Brick Holdings PLC said Monday that 2017 profit fell due to rise in costs and despite growth in revenue.
For 2017, Michelmersh said pretax profit dropped to GBP3.3 million from GBP4.6 million the year before due to a rise in administrative expenses to GBP7.4 million from GBP5.8 million, with GBP1.0 million added from the amortisation of intangibles, associated with the acquisition of Carlton Main Brickworks Ltd in June for GBP31.2 million.
Revenue saw double digit growth by 26% to GBP37.9 million from GBP30.1 million the prior year, reflecting the uplift provided by the acquisition of Carlton, which exceeded expectations in terms of operational performances.
Excluding Carlton, brick turnover for the year grew by 3.0% with a 2.0% increase in sales and a modest price inflation, while production volumes increased by 2.0% through increased plant utilisation efficiencies at Blockleys.
However, Michelmersh had a difficult year, as results continued to deteriorate as the cost of production increased with a fall in volumes and average selling price.
Michelmersh declared a 2.15 pence per share for 2017, up from 2.00p the prior year, after paying its first interim dividend of 0.7 pence.
"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," said Chairman Martin Warner.
"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," Warner added.
Shares in Michelmersh Brick were up 6.6% at 83.17 pence on Monday.
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