23rd Mar 2015 08:59
LONDON (Alliance News) - Michelmersh Brick Holdings PLC reinstated its dividend payout on Monday after the company's pretax profit surged in 2014 as revenue increased but costs were kept broadly flat.
The brick manufacturer and landfill company said its pretax profit for the year was GBP2.6 million, compared to a GBP407,000 profit a year earlier. Revenue increased to GBP28.5 million from GBP25.9 million, but the group's operating margin improved significantly as its cost of sales rose only slightly to GBP19.8 million from GBP19.2 million.
Michelmersh said it sold a total of 70 million bricks over the year, with production hitting 67.5 million and with average selling prices up 13.5% year-on-year. The group also said the expansion of its Freshfield Lane facility has now been completed, increasing its production capacity by 6 million bricks a year.
As a result of the good results, the company said it would reinstate dividend payments and is proposing a 0.5 pence dividend for the year. "Net debt is likely to be positive by the end of 2015," Michelmersh said, "and the board will seek to make dividend payments out of trading cash flow annually to establish and maintain a prudent level of dividend cover."
"With a strong financial footing, and in a market that seems set for continued prosperity, we can be confident of robust profitability and meaningful shareholder returns going forward. We have had a strong start to 2015 and, with our well-invested plants, feel well positioned for the year ahead," said Chairman Eric Gadsen.
Shares in Michelmersh were up 3.2% to 71.2 pence on Monday.
By Sam Unsted; [email protected]; @SamUAtAlliance
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