Michelmersh Brick Holdings Plc (LON:MBH) reported a 6% increase in first half turnover and said it expects a strong second half following its acquisition of Carlton Main Brickworks.
The brick maker said turnover in the six months ended 30 June 2017 rose to £16.2mln from £15.3mln the same period a year earlier, supported by an increase in average selling prices and a seven-day contribution from Yorkshire-based Carlton.
WATCH: Michelmersh boss expecting strong second half following Carlton acquisition
Underlying earnings (EBIDTA) was flat at £3.0mln and pre-tax profit dropped to £2.4mln from £2.6mln, as expenses rose 7% on its £31.2mln purchase of Carlton, higher employment costs and cost inflation.
The integration of the newly acquired business is on track and is expected to boost second half earnings.
“Output will increase to over 100 million bricks and turnover and EBITDA will significantly increase with immediate effect,” said chairman Martin Warner.
In late June the group also completed the sale of the former Dunton Brothers brickworks at Chesham in Buckinghamshire for £2.68mln in cash.
The company used £3mln of the proceeds of the sale to repay part of its loan facility for the acquisition of Carlton.
Net debt stood at £20.7mln at the end of the period, compared to net cash of £2.8mln last year.
While the company is in a debt position after buying Carlton, it proposed an interim dividend of 0.7p per share as it expects increased earnings of the enlarged group.
Warner said the group is well placed for the rest of the year with a "strong, well balanced" forward order book of more than 55 million bricks spread across repair maintenance and improvement, housing and commercial sectors.
“This is a transformational period for the business, which will further benefit our customers and shareholders in the future,” he said.
“We look forward to a busy second half of 2017 with a strong contribution from Carlton.”