26 November 2024
Brickability Group PLC
("Brickability" or the
"Group")
Interim Results for the six
months ended 30 September 2024
Brickability Group PLC (AIM:
BRCK), leading distributor and provider of specialist products and
services to the UK construction industry, today announces its
unaudited interim results for the six months ended 30 September
2024 ("H1 FY25").
H1 FY25 Financial Summary
|
|
H1 FY25
|
H1 FY24
|
% Change
|
|
|
£m
|
£m
|
|
Revenue
|
330.9
|
324.8
|
1.9
|
|
|
|
|
|
|
Adjusted results (1) (2)
(3)
|
|
|
|
|
Gross profit
|
63.0
|
55.0
|
14.5
|
|
Gross profit margin
|
19.0%
|
16.9%
|
210bps
|
|
Adjusted EBITDA
|
27.9
|
25.6
|
9.0
|
|
Adjusted EBITDA margin
|
8.4%
|
7.9%
|
50bps
|
|
Adjusted profit before
tax
|
21.9
|
21.8
|
0.5
|
|
Adjusted EPS
|
5.03p
|
5.30p
|
(5.1)
|
|
|
|
|
|
|
Net debt (4)
|
56.3
|
30.9
|
82.2
|
|
|
|
|
|
|
Interim dividend -
declared
|
1.12p
|
1.07p
|
4.7
|
|
|
|
|
|
|
Statutory results (5)
|
|
|
|
|
Profit before tax
|
7.0
|
16.0
|
(56.3)
|
|
EPS
|
1.33p
|
3.78p
|
(64.8)
|
Half year highlights
|
·
|
Resilient, in line performance
despite sustained macroeconomic conditions, with revenue growth of
1.9% or a like-for-like (LFL)(6) reduction of
7.4%
|
|
·
|
Improvement in Adjusted EBITDA
margin of 50 bps validating the benefits of the recent strategic
and structurally higher margin acquisitions
|
|
·
|
Strong revenue performance in the
Contracting and Distribution divisions, driven by a doubling of
sales of solar PV in Upowa, highlighting the benefit of the Group's
diversification strategy
|
|
·
|
FY24 full-service specialist
cladding installation and remediation contracting acquisitions of
Topek and TSL are performing well and trading in line with the
pre-acquisition investment case
|
|
·
|
Streamlined senior leadership
team, focused on growth and operational outperformance
|
|
·
|
Investment underway in IT systems
upgrades and process efficiencies
|
|
·
|
Increase in the interim dividend
reflects the performance in the first half and the Board's
confidence in the longer-term outlook for the Group
|
Outlook
|
·
|
Trading for the first six weeks of
the second half is in line with the Board's expectations
|
|
·
|
New build housing market remains
soft heading into the new calendar year
|
|
·
|
Medium-term housing market
fundamentals are strong, with a structural housing deficit and the
new Government's commitment to 1.5 million new homes during this
parliament
|
|
·
|
Recent increased order intake is
encouraging, particularly within the Bricks and Building Materials
division
|
|
·
|
Profitability is expected to be
first half weighted due to phasing of project work in the
Contracting division, and the Board is confident in achieving
market expectations for the full year(7)
|
Frank Hanna, Chief Executive Officer,
commented:
"This has been a positive half for the business, and I view
the future with cautious optimism. Enquiry levels are picking up,
the order intake is encouraging, and importantly, well represented
across each of our four divisions. We remain confident in a
recovery of the new build housing market, and Brickability is well
positioned to significantly benefit when it
happens.
"Having now been in the business for six months I've been
able to take a detailed look at the Group. My initial impressions
remain intact, this is a great business with a strategy of
diversification, providing high quality specialist products and
services for our customers. The Group has significantly evolved
from predominantly being a brick distributor, and is now a
diversified group of scale with strong foundations. My focus has
been on improving the fundamentals of the business, ensuring
through cycle resilience whilst retaining the entrepreneurialism
spirit at our core, and I look forward to the future with
confidence in our ability to deliver excellent results when market
growth returns."
|
(1)
|
Adjusted EBITDA is earnings before
interest, tax, depreciation, amortisation and other items (See
Financial Review and note 5).
|
|
(2)
|
Adjusted profit before tax is
statutory profit before tax excluding other items.
|
|
(3)
|
Adjusted EPS is adjusted profit
after tax (statutory profit after tax before other items) divided
by the weighted average number of shares in the year.
|
|
(4)
|
Bank borrowings, excluding
arrangement fees, less cash.
|
|
(5)
|
Statutory measures derived from
accounting under IFRS.
|
|
(6)
|
Like-for-like ("LFL") revenue is a
measure of growth in sales, adjusted for the impact of
acquisitions.
|
|
(7)
|
The Company considers market
expectations for FY25 to be revenue of £630m and Adjusted EBITDA of
£47m.
|
|
Enquiries:
|
|
|
Brickability Group
PLC
John Richards, Chairman
Frank Hanna, Chief Executive
Officer
Mike Gant, Chief Financial
Officer
|
via Montfort
Communications
|
|
Peel Hunt LLP (Nominated Adviser and
Broker)
Ed Allsopp
Tom Graham
Charlotte Sutcliffe
|
+44 (0) 20 7418 8900
|
|
Montfort Communications
James Olley
Alex Everett
|
+44 (0) 203 514 0897
brickability@montfort.london
|
About Brickability
Brickability Group PLC is a
leading distributor and provider of specialist products and
services to the UK construction industry. The business comprises
four divisions: Bricks and Building Materials, Importing,
Distribution and Contracting. With an agile, de-centralised,
capital-light business model, supported by a strong balance sheet,
Brickability leverages the skills of its people company-wide to
effectively service the complex and evolving needs of the
construction industry.
Founded in 1985, the Group has
grown organically through product diversification and geographic
expansion, as well as through the acquisition of specialist
businesses that support its long-term strategy for growth. Today,
the Group encompasses a diverse portfolio of market-leading brands
and a dedicated team of over 800 skilled and experienced personnel,
led by a management team with deep-rooted knowledge and experience
in the UK and European construction industries.
The Group is committed to building
better communities throughout the supply chain and supporting the
delivery of sustainable developments that enhance the built
environment for future generations, while delivering continuous
value for shareholders.
Interim Report for the six months ended 30 September
2024
Chairman's Statement
Overview
I am pleased to report our
financial results for the six months ended 30 September 2024. These
results continue to validate our strategy of diversification, which
is focused on creating a resilient, broad based and added-value
speciality products distribution and services business with
multiple growth opportunities. As a result of strong operational
execution, we have been able to deliver an increase in H1 FY25 in
revenue, gross margin and Adjusted EBITDA.
Of particular note in the first
half within the Distribution division, we have seen a doubling of
sales at Upowa, our renewable energy business, which provides
products and services including solar panels, battery storage and
renewable heating. Specialist solar PV systems for new build homes
are the major contributor to Upowa's sales growth, driven by
revisions to Part L of the Building Regulations, which cover
mandatory energy efficiency requirements. Part L is now applicable
to all new housing starts, underlining the UK's structural shift to
sustainable development.
Within the Contracting division,
we have also enjoyed a strong first half at our specialist cladding
and fire remediation business where revenue on a LFL basis has
increased by approximately 9%. The momentum in this business, which
comprises our recent Topek and TSL acquisitions, is a result of the
urgent requirement for remediation of unsafe cladding, a
significant market where demand for our services will persist for
many years.
The growth drivers behind these
higher margin revenue streams are distinct from our traditional
brick import and distribution activities, the performance of which
is closely correlated to new housing starts.
Our financial results for H1 FY25
were resilient, through a period in which the new build housing and
residential and commercial RMI markets remained subdued, and
underlines the valuable contribution from our diversified revenue
streams. Group revenues grew to £330.9 million (H1 FY24:
£324.8 million) and Adjusted EBITDA increased to £27.9 million (H1
FY24: £25.6 million). Group revenues on a LFL basis were 7.4%
lower, which demonstrates the important contribution from recent
acquisitions.
Whilst the new build housing,
residential and commercial RMI markets remain challenging, we are
seeing early indications of recovery, for example, in brick order
intakes, roofing orders and other product enquiries. As the market
improves, we continue to view the Group's brick sourcing and
distribution activities as exciting, owing to our differentiated
position in the UK brick market. Our network of premium European
manufacturers ensures we are able to offer a market leading breadth
of brick types including clay bricks, which are favoured by
planners, developers and homeowners in parts of the UK such as the
Southeast.
There is structural demand in the
UK for imported clay stock bricks as current UK production is
mainly focused on wire-cut manufactured bricks. Additionally, UK
wire-cut brick manufacture has finite capacity increasing the
requirement for imports. Once new build housing is in recovery, and
UK brick demand exceeds manufacturing capacity, the brick market
will become more reliant on imported bricks once again,
particularly whilst UK manufacturing capacity remains below
historic norms. We are ideally positioned to satisfy that demand
owing to the strength of our established relationships with
brickmakers across Europe.
The mid to long-term fundamentals
of the UK housing market remain robust, with the historical under
supply of housing evidenced through the Government's commitment to
1.5 million homes under its parliament, presenting a significant
potential for growth within the housebuilding supply chain. We are
encouraged by the improving interest rate environment, a slowing
inflation trend, and by initiatives from the Government to support
both private sector and social housing.
Acquisitions
The Board's acquisition strategy
complements the Group's organic growth initiatives and remains
focused on diversifying product offering, services and geographic
reach. Our most recent acquisitions were TSL in January 2024 and
Topek in October 2023. Both of these acquisitions, in the
complementary high growth verticals of cladding remediation, are
trading well and in line with the pre-acquisition investment
case. Both businesses have contributed meaningfully in the
period, and represent a conscious effort to drive the Group's
blended margin.
Whilst the current focus is on
de-gearing the balance sheet, the Group continues to evaluate
potential acquisition opportunities with a particular emphasis on
focused growth in our existing four divisions.
Since the IPO in August 2019, our
acquisition strategy has brought together a family of specialist
businesses focused on providing a range of services to our
customers, and on scaling the Group. We are currently progressing a
systems and data project aimed at standardising business processes
to improve efficiency and analytics, and to create a platform for
the integration of future acquisitions. We look forward to
providing further updates on this project in due course, which we
believe will deliver multiple benefits for Brickability going
forward.
Board and Environmental, Social and
Governance
Frank Hanna joined the Group as
Chief Executive Officer on 15 April 2024, bringing considerable
industry and management expertise to help lead Brickability on the
next stage of its growth journey. I would like to record my thanks
to Frank for his valuable input to date. I would also like to thank
all colleagues within Brickability for their commitment and hard
work throughout the first half.
Our environmental, social and
governance strategy is at the heart of our business and we are
committed to making continued progress across all three areas.
During the first half we have laid out plans to deepen our Scope 3
reporting, initiate energy-saving trials and conduct a materiality
assessment with customers to keep our ESG strategy aligned with the
evolving market. It is also gratifying that as a business we have
supported over 80 youth sports clubs nationwide over the last few
months through our Charitable Foundation.
Dividend
The Board is pleased to declare an
increase in the interim dividend to 1.12 pence per share (H1 FY24:
1.07 pence), in line with the Group's progressive dividend policy,
which reflects the performance of the business in the half year and
the Board's confidence in the future.
Outlook
The third quarter of FY25 has
started positively for the Group, and whilst wider sector headwinds
prevail, we are benefiting from diversification and remain
confident of meeting market expectations for the current financial
year. Enquiries and order intake are gaining momentum, and together
with a well-balanced forward order book, favourable operational
gearing within the business and an improving macroeconomic outlook,
the Board is increasingly positive about the near, medium- and
long-term prospects for the Group.
John Richards
Chairman
26 November 2024
Chief Executive's Review
Introduction
Since joining Brickability as CEO
in April this year, I have been hugely impressed by the unique
nature of the Group within the wider specialist construction
materials sector and by our potential to grow organically, through
cyclical recovery and through targeted strategic
acquisitions.
We are differentiated by our
ability to source and supply added-value building products for the
total building envelope, and are set apart by the specialism in
everything we do. We have a pivotal role, sitting between building
product manufacturers and brand owners, and the construction
industry customers whom we provide with sourcing, procurement and
advisory expertise leading to strong and long standing
relationships.
What is clear is that Brickability
adds value to our customers through our specialised support and
procurement in a construction industry with increasingly complex
and demanding regulatory, planning and sustainability
requirements.
My initial review of the Group has
enabled me to focus on two vital aspects of the business: people
and processes. We now have a streamlined Senior Leadership Team to
drive the Group forward. We are investing in, and enhancing our IT,
through improving systems and processes to create a robust platform
for future growth. This will help identify and allow us to
deliver on organic growth opportunities, and will provide a
stronger platform from which to quickly integrate and generate
value from future acquisitions.
A strong commercial and
customer-focused culture is at the heart of our business, which has
been a significant characteristic of the businesses acquired since
IPO. It is important to retain this culture throughout the
organisation, however, we are taking the opportunity to consolidate
some of the back office systems to improve the efficiency of the
Group and enhance the quality of management information alongside
our internal Health & Safety and sustainability
infrastructure.
Brickability is a cash generative,
margin-focused, capital-light business and we are benefiting from a
strategy of diversification, with bricks currently representing
less than half of Group sales. In particular, our recently acquired
specialist fire remediation and cladding business and our Upowa
renewable energy business are both
high-margin businesses operating in end markets
of structural growth, resulting in a more resilient through cycle
Group.
It is well documented that house
builders, which represent approximately half of our customer base,
are at trough output, but we are encouraged by the momentum in our
order book, the improving interest rate environment and by the
Government's target of constructing 1.5 million homes over the
parliament.
Not only are we well placed for a
recovery in end markets, but the specific role that the Group plays
in moving construction towards a more sustainable future will be a
significant driver of future growth. We are a business with strong
ESG credentials. Environmental sustainability and social value are
hallmarks of our portfolio of products and services, underlining
our corporate commitment to Building Better Communities.
Group financial results
It is pleasing to report that
Brickability's strategy to diversify revenues across four
divisions, with a focus on margin growth has been reflected in the
first half results. Against a backdrop of wider market challenges,
with UK housebuilding largely on hold, whilst interest rates have
been elevated for a significant period of time, the Group has
performed in line with the Board's expectations during the first
half of the year.
Revenue increased, on a reported
basis, by 1.9% (H1 FY24: -7.9%), reflecting the impact of the
strategic acquisitions made in FY24 and the growth in our
Distribution division. On a LFL basis, revenues were down 7.4%, a
much lower rate of contraction versus the prior year comparative
(H1 FY24: -14.4%).
Gross profit of £63.0m (H1 FY24:
£55.0m) has grown by £8.0m, or 14.5% over the period. Gross Profit
margin at 19.0% (H1 FY24: 16.9%) has increased by 210 basis points,
reflecting the impact of the specialist cladding and fire
remediation acquisitions. These in turn have also positively
impacted Group Adjusted EBITDA margin which, compared with the
prior period, has grown by 50 basis points to 8.4%.
Divisional Update
Bricks and Building Materials Division
This division incorporates the
sale of superior quality building materials to all sectors of the
construction industry including national house builders,
developers, contractors, general builders and retail to members of
the public. From the beginning of the financial year, the E. T.
Clay business unit moved into the division from Importing which
better reflects the nature of the business.
In line with our expectations and
reflecting the anticipated softness in the housing market, revenues
decreased 9.4% to £219.9m (H1 FY24: £242.6m), during the period.
The Adjusted EBITDA margins across products fell 80 basis points,
which was largely a result of exposure to bricks, with the average
selling price 8% lower than last year.
The market for UK brick despatches
was at a similar level to the comparative period last year.
Divisional volumes were down around 5% reflecting the challenging
trading conditions, particularly in businesses with higher exposure
to premium brick sales, such as the private housebuilding and the
merchant sector. Trading with social housing-led developers has
been more resilient.
Primarily as a result of the
softness in bricks, the first half saw a greater proportion of
revenues generated from the cladding supply and timber businesses.
The performance of our cladding supply business was resilient
although trading has to some extent been impacted by project
delays, in part due to the Building Safety Act ('BSA'). Timber
revenue was broadly flat when compared to the comparative period,
with volume growth from our UK stock sites broadly outweighing the
average selling price reductions of 4%.
To support growth of our timber
and cladding supply businesses, our new central London showroom in
Clerkenwell continues to progress well with an official launch
expected before the end of the financial year in March. This is a
further investment in the specification sector with the new
facility over three times the size of the previous one and it will
showcase all the products in the Taylor Maxwell and SBS
portfolios.
Importing Division
This division is
primarily responsible for strategic importing of
building products, the majority of which are on an exclusive basis
to the UK market, to complement traditional and contemporary
architecture.
As anticipated, the division's
revenue was impacted by the lower levels of activity in the UK
market for imported bricks and roof tiles, falling by 10.6% to
£35.6m (H1 FY24:
£39.8m) during the period. Imported brick volumes fell by around 7%
whilst the average selling price was 11% lower than last year,
impacting Adjusted EBITDA margin, which fell 270 basis
points.
Trading conditions remain
challenging with high exposure to the merchant sector as well as
private housebuilding but it remains our expectation that the
performance and profitability of the division will improve as the
overall brick market gathers pace alongside the capacity
constraints of domestic manufacture.
Distribution Division
This division focuses on the sale and distribution of a wide range of
products, including windows, doors, radiators and associated parts
and accessories.
Revenue in the first half grew by
1.5% to £33.7m (H1 FY24: £33.2m) driven by
a doubling of revenue from our solar business, Upowa. However, the
weaker activity in the housing market has significantly impacted
sales in almost all of the other businesses in the division. This
impact has driven an adverse variance in business unit profit mix
together with negative operational leverage leading to a fall of
320 basis points in Adjusted EBITDA margin.
In addition to the significant
growth in solar panel installations, the division continues to
expand its sales of other energy efficient solutions such as
electric radiators, hot water heat pump cylinders, and underfloor
heating.
Contracting Division
This division provides cladding, fire remediation, flooring and roofing
installation services within the residential construction sector
and commercial sector.
Revenue in the first half grew by
128.3% to £53.5m but was down 4.7% on
a LFL basis during the period. Revenue growth was driven by the
inclusion of Topek and TSL, the specialist cladding and fire
remediation acquisitions within the division. As expected, the
softness in the housing market seen over the last two years is now
being reflected in the results of the roofing businesses in the
division.
Overall, the inclusion of Topek
and TSL, structurally higher margin business has significantly
increased the divisional Adjusted EBITDA margin, up 880 basis
points to 24.6% from 15.8% in the prior period.
Continental Tile Joint Venture
As noted in September's AGM
statement, the Board has decided against issuing a further loan to
its German tile manufacturing joint venture, allowing the Group to
focus on other investment opportunities and capital allocation
priorities, which are expected to generate better returns for
shareholders. The factory is expected to cease operations in the
coming weeks. Whilst various options for the sale of the business
and its assets are being evaluated, the Group has recognised the
full impairment of the loans to the joint venture of £5.3m, which
has been treated as a non-cash one-off exceptional item.
Summary
There has been positive progress
in H1 FY25 as we use current markets as an opportunity to enhance
the fitness of the business ahead of a market recovery. It is our
belief that greater attention to process will help drive
efficiencies and facilitate profitable future growth and this will
be an important area of focus for the Group as we move forward. We
already operate a capital-light model, and with the operational
leverage of the Group, an improvement in end markets will benefit
near-term profitability and deliver strong returns for
shareholders.
Whilst interest rates may take
time to come down sufficiently to boost the housing market, and we
remain cautious, inorganic growth will continue to be a driver of
Brickability's expansion and the Group continues to evaluate its
M&A pipeline where there are a number of earnings enhancing
opportunities.
Against a softer market backdrop,
the results show the benefits of product diversification with
revenue and Adjusted EBITDA growth. The business remains committed
to growing in a sustainable manner, the Board's outlook for the
2025 full year remain unchanged, and is consistent with market
expectations.
We look to the future with
cautious optimism and are cognisant of the Government's commitment
to new housing starts in the UK, the requirement for more energy
efficient and low carbon home, as well the recent Budget stating
that up to £22.4bn would be spent to rectify dangerous cladding,
all of which are significant tailwinds for Brickability.
Frank Hanna
Chief Executive
26 November 2024
Financial Review
Revenue
The Group delivered revenue of
£330.9 million in the first 6 months of FY25 (H1 FY24: £324.8
million, an increase of 1.9% or £6.1 million. Group LFL revenue
decrease was 7.4% when compared to H1 FY24.
Revenue by division is analysed as
follows:
|
|
H1 FY25
£'000
|
H1 FY24
£'000
|
% Change
|
LFL %
Change
|
|
Bricks and Building
Materials
|
219,936
|
242,632
|
(9.4)%
|
(9.4)%
|
|
Importing
|
35,560
|
39,782
|
(10.6)%
|
(10.6)%
|
|
Distribution
|
33,717
|
33,227
|
1.5%
|
1.5%
|
|
Contracting
|
53,470
|
23,421
|
128.3%
|
(4.7)%
|
|
Group eliminations
|
(11,754)
|
(14,222)
|
(17.4)%
|
(17.4)%
|
|
Total
|
330,929
|
324,840
|
1.9%
|
(7.4)%
|
Gross Profit
Gross profit for the first 6
months of FY25 increased to £63.0 million (H1 FY24: £55.0 million).
Gross profit margin has increased by 210 basis points to 19.0% (H1
FY24: 16.9%) driven by the impact of the
two acquisitions in the second half of FY24.
Adjusted EBITDA
Adjusted EBITDA for the first 6
months of FY25 increased by 9.2% to £27.9
million (H1 FY24: £25.6 million). Adjusted EBITDA as a percentage
of revenue has increased to 8.4% (H1 FY24: 7.9%), due to the
acquisitions completed in FY24 as noted above.
Adjusted EBITDA by division is
analysed as follows:
|
|
H1 FY25
£'000
|
H1 FY25 EBITDA as %
Revenue
|
H1 FY24
£'000
|
H1 FY24 EBITDA as %
Revenue
|
|
Bricks and Building
Materials
|
11,228
|
5.1%
|
14,321
|
5.9%
|
|
Importing
|
2,784
|
7.8%
|
4,188
|
10.5%
|
|
Distribution
|
4,198
|
12.5%
|
5,229
|
15.7%
|
|
Contracting
|
13,178
|
24.6%
|
3,690
|
15.8%
|
|
Central
|
(3,473)
|
-
|
(1,861)
|
-
|
|
Total
|
27,915
|
8.4%
|
25,567
|
7.9%
|
Statutory And Adjusted Profit
Statutory profit before tax of
£7.0 million (H1 FY24: £16.0 million) includes other items of £15.0
million (H1 FY24: £5.8 million), which are not considered to be
part of the Group's underlying trading operations. These are
analysed as follows:
|
|
H1 FY25
£'000
|
H1 FY24
£'000
|
|
Statutory profit before tax
|
6,951
|
15,970
|
|
Acquisition costs
|
-
|
23
|
|
IT transformation costs
|
103
|
-
|
|
Earn-out consideration classified
as remuneration under IFRS 3
|
310
|
2,695
|
|
Share-based payment
expense
|
536
|
830
|
|
Amortisation of acquired
intangible assets
|
6,720
|
4,315
|
|
Impairment of loan to joint
venture
|
5,318
|
-
|
|
Unwinding of discount on
contingent consideration
|
1,861
|
832
|
|
Share of post-tax profit of equity
accounted associates
|
(15)
|
(97)
|
|
Fair value losses/(gains) on
contingent consideration
|
130
|
(2,815)
|
|
Total other items before tax
|
14,963
|
5,783
|
|
Adjusted profit before tax
|
21,914
|
21,753
|
|
Depreciation and
amortisation
|
3,216
|
2,606
|
|
Finance income
|
(249)
|
(208)
|
|
Finance expense
|
3,034
|
1,416
|
|
Adjusted EBITDA
|
27,915
|
25,567
|
During the period, the Group
recognised an impairment of £5.3 million (H1 FY24: £nil) of the
loan to its joint venture, following the joint venture company
appointing administrators. Further details are outlined in note 10.
The impairment is considered to be one-off in nature and over and
above the Group's typical level of impairment recognised from its
ongoing operations. Accordingly, the impairment has been included
within other items and excluded from Adjusted profit before
tax.
Earnings per share
Basic EPS was 0.92 pence per share
(H1 FY24: 3.78 pence), while adjusted basic EPS was 5.03 pence per
share (H1 FY24: 5.30 pence). Adjusted EPS is an underlying EPS,
based on the adjusted profit as noted above.
Dividends
The Board has declared an interim
dividend of 1.12 pence per share (H1 FY24: 1.07 pence) to
shareholders on the register as at 24 January 2025. The ex-dividend
date and payment date for the dividend will be 23 January 2025 and
20 February 2025 respectively.
Cash flow and net debt
In the first six months of FY25,
the Group generated operating cash flows before movements in
working capital of £26.3 million (H1 FY24: £22.6 million). The
increase of £3.7 million is predominately driven by increases in
Group revenue and profit margins as noted above. Cash generated
from operations increased to £19.3 million (H1 FY24: £3.4 million).
The working capital outflow of £7.1 million (H1 FY24: £19.3
million) has decreased largely due to reduced activity in the
Bricks and Building Materials division in the first 6 months of
FY25 as compared to the first 6 months of FY24.
At 30 September 2024, the net debt
position was £56.3 million compared to £30.9 million at 30
September 2023, and has decreased from £56.5 million at 31 March
2024. The main components of the movement in net debt for the first
6 months of FY25 are: movements in working capital of £7.1 million
((H1 FY24: £19.3 million), corporation tax paid of £5.5 million (H1
FY24: £5.0 million), property, plant and equipment sale proceeds of
£2.9 million (H1 FY24: £0.0 million), interest paid of £3.5 million
(H1 FY24: £1.8 million), payment of deferred consideration, in
relation to previous acquisitions, of £3.1 million (H1 FY24: £4.7
million) and dividends paid of £7.3m (H1 FY24: £6.5m). The Group is
expected to remain cash generative into the future.
Bank facilities
The Group refinanced in October
2023 to a £100 million RCF on a club basis with HSBC and Barclays
for an initial term of 3 years, with an option to extend for
another year and then another option to extend for a further year.
The level of the facility reduces over the term of the facility to
£80m. At H1 FY25, the RCF facility had reduced to £96m and the
Group had utilised £59.5 million of the facility.
Mike Gant
Chief Financial Officer
26 November 2024