Michelmersh Brick Holdings Plc (LON:MBH) posted strong annual results as a first meaningful contribution from recent acquisition Carlton coincided with a strong market for premium bricks.
Carlton cost £31.2mln in June and was largely behind the 26% jump in revenue to £37.9mln in 2017. Organic growth was 3%.
WATCH: Michelmersh Brick boosted by acquisition and healthy brick market
Underlying profits [EBITDA] rose by 42% to £7.33mln., though pre-profits fell to £3.34mln due to the cost of integrating Carlton.
Prospects for the year ahead are even better, Michelmersh added.
UK brick manufacturing is facing stock shortages with demand exceeding supply and cost inflation, said the AIM-listed company, which should help margins.
Michelmersh has traditionally been able to command a premium thanks to product innovation and a focus on new markets
The Office for National Statistics recently stated brick production rose just over 4% from the previous year, while brick deliveries rose 11%, with 2017 being the strongest year for despatches since 2007.
Brick stocks also fell by nearly 28% towards the end of the year against a background of flat pricing.
“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,” said chairman Martin Warner.
The dividend for the year is 2.15p, a 7.5% increase.