Last checked at 11 Mar 2022 07:00
Brickability Group PLC
LEI: 213800SK28MWXB3K3P26
11 March 2022
Brickability Group plc
("Brickability" or "the Group")
Roof Tile Joint Venture
Brickability Group plc (AIM: BRCK), the leading construction materials distributor, is pleased to announce the formation of a joint venture with La Perla Participaties B.V. ("La Perla") and Mr Harold Kock for the manufacture of clay roof tiles via a jointly-owned joint venture vehicle Schermbecker Building Products GmbH (the "Joint Venture") operating from a factory in Germany leased from Falzziegelwerke Gebr. Nelskamp GmbH & Co. KG ("Nelskamp"), a leading German tile manufacturer and producer of roofing materials.
Highlights
· | The Joint Venture, once fully operational, is expected to produce approximately 45,000 tonnes of clay roof tiles annually for distribution into the UK and European markets. The Group currently imports around 25,000 tonnes of clay roof tiles annually.
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· | This production will, when fully operational, provide around 22 million additional clay roof tiles annually for the Group which will generate approximately £9 million of incremental annualised revenue for the Group.
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· | The production of clay roof tiles for the UK market is expected to start-up in Autumn 2022 once the necessary modifications to the factory have been fully commissioned.
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· | Brickability to hold 50% interest in the Joint Venture company following a Eur 0.5 million investment by the Group.
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· | Brickability will provide a term loan into the Joint Venture of Euro 3.5 million, due for repayment at the end of June 2025, to fund Joint Venture working capital, the purchase of assets and new capital investment required to produce tiles for the UK market.
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Alan Simpson, CEO, Brickability Group plc, said:
"This strategic partnership with Nelskamp will provide a much needed solution to the severe shortage of clay roof tiles in the UK, in doing so further strengthening the Group's position in the market and further demonstrating both Brickability's expertise in procurement and the long and strong relationships we enjoy with our partners."
Joint Venture Agreement
In forming the Joint Venture, the Group has entered into a joint venture agreement (the "JV Agreement") with La Perla and Mr. Harold Kock. Under the terms of the JV Agreement, Brickability will have an interest of 50% of the Joint Venture's issued share capital and La Perla and Mr. Kock holding 40% and 10% interests in the Joint Venture respectively. Under the JV Agreement, joint contributions of an aggregate of Euro 1.0 million will be made to capitalise the Joint Venture, pro-rated to the participants respective shareholdings in the Joint Venture.
In addition, the Group has agreed to provide a Euro 3.5 million term loan to the Joint Venture to fund Joint Venture working capital, the purchase of assets and new capital investment required to produce tiles for the UK market (the "Term Loan"). The Term Loan, which is secured on the assets of the Joint Venture and carries a coupon of 3.0% per annum above Bank of England base rate, will mature on 30 June 2025.
Mr Kock, Sales Director of Dachziegelwerke Nelskamp GmbH will represent the Nelskamp group's interest in the Joint Venture. Mr. Kock and Arnold van Huet, Managing Director of Brickability's wholly owned subsidiaries which make up the Crest Group of companies, will serve as Co-Managing Directors of the Joint Venture. In his capacity as Managing Director of the Crest Group of companies, Arnold van Huet was, at the time of the formation of the Joint Venture but ahead of the execution of the Term Loan, the sole shareholder and director of La Perla in order to provide control of Schermbecker Building Products GmbH for the Group.
Mr. van Huet has since resigned as a director of La Perla and transferred the entire issued share capital of La Perla to Mr Kock for nil consideration. However, and as a result of Mr. van Huet's previous legal interest in La Perla on entry by the Group into the JV Agreement with La Perla, the entry of the JV Agreement is considered to be a related party transaction pursuant to Rule 13 of the AIM Rules for Companies. Mr. van Huet has not, and will not, receive any economic benefit or beneficial interest in or resulting from the formation of the Joint Venture.
The Brickability directors (all of whom are regarded as being independent) consider, having consulted with the Group's nominated adviser, that the entry of the joint venture agreements is fair and reasonable in so far as shareholders are concerned.
ENDS
For further information please contact:
Brickability Group plc John Richards, Chairman Alan Simpson, CEO Mike Gant, CFO | via Montfort Communications |
Cenkos Securities plc (Nominated adviser and broker) Ben Jeynes, Max Gould (Corporate Finance) Julian Morse, Alex Pollen (Sales) | +44 (0) 20 7397 8900 |
Montfort Communications James Olley Georgia Colkin | +44 (0) 203 514 0897 |
About Brickability
Brickability is a leading construction materials distributor, serving customers across the UK and Europe for over 36 years through its national and local networks. The company supplies over 500M bricks annually and has 41 locations across the country with over 500 employees.
Across its 3 divisions the Group supplies bricks, roofing, timber, cladding, heating, flooring, doors and windows to meet demand from both housebuilders and contractors.