Brickability Group
PLC
LEI: 213800SK28MWXB3K3P26
16 July 2024
Brickability Group
PLC
("Brickability", the "Company" or the "Group")
Unaudited preliminary
results for the year ended 31 March 2024
Further strategic progress
in a challenging year; well positioned when end markets
improve
Brickability Group PLC (AIM:
BRCK), a leading distributor and provider of specialist products
and services to the UK construction industry, is pleased to
announce its unaudited preliminary results for the twelve-month
period ended 31 March 2024.
Financial Summary
|
|
(Unaudited)
2024
|
(Audited)
2023
|
% Change
|
|
|
£m
|
£m
|
|
Revenue
|
594.1
|
681.1
|
(12.8)%
|
|
Gross profit
|
105.8
|
112.9
|
(6.3)%
|
|
Adjusted EBITDA
(2)
|
44.9
|
51.5
|
(12.8)%
|
|
Profit before tax
|
21.4
|
34.5
|
(38.0)%
|
|
Adjusted profit before tax
(3)
|
35.3
|
44.6
|
(20.9)%
|
|
EPS
|
5.06p
|
9.26p
|
(45.4)%
|
|
Adjusted EPS
(4)
|
8.66p
|
11.93p
|
(27.4)%
|
|
Net (debt)
(5)
|
(56.5)
|
(8.0)
|
|
|
Final
proposed dividend
|
2.28p
|
2.15p
|
6.0%
|
|
Total
dividend for the year
|
3.35p
|
3.16p
|
6.0%
|
|
|
•
|
Revenue decreased by 12.8% to
£594.1m (2023: £681.1m)
|
|
•
|
Group like-for-like(1)
revenue decline of 17.9% versus 2023
|
|
•
|
Gross profit decreased by 6.3% to
£105.8m (2023: £112.9m)
|
|
•
|
Gross profit margin of 17.8%
(2023: 16.6%)
|
|
•
|
Adjusted EBITDA(2)
decreased by 12.8% to £44.9m (2023: £51.5m)
|
|
•
|
Adjusted Profit before
tax(3) decreased by 20.9% to £35.3m (2023:
£44.6m)
|
|
•
|
Statutory Profit before tax
decreased by 38.0% to £21.4m (2023: £34.5m)
|
|
•
|
Statutory EPS decreased by 45.4%
to 5.06p (2023: 9.26p)
|
|
•
|
Adjusted EPS(4)
decreased by 27.1% to 8.66p (2023: 11.93p)
|
|
•
|
Net debt(5) as at 31
March £56.5m (2023: £8.0m)
|
|
•
|
Proposed final dividend of 2.28
pence per share, totalling 3.35 pence per share for the year, an
increase of 6.0% (2023: 3.16p)
|
Operational and strategic highlights
|
•
|
Resilient performance, despite a
challenging sector environment, reflecting the Group's strategic
position within the industry.
|
|
•
|
Acquisitions of Group Topek
Holdings Limited in October 2023 and Topek Southern Limited in
January 2024.
|
|
•
|
These strategic acquisitions bring
the Group full-service specialist cladding installation and
remediation contracting businesses with national presence, and
further diversification from its traditional housing
markets.
|
|
•
|
Good progress advancing our ESG
strategy.
|
Current trading and outlook
|
•
|
Trading in the current financial
year to date is in line with management's expectations.
|
|
•
|
Appointment of Frank Hanna to the
Board as CEO on 15 April 2024, succeeding Alan Simpson.
|
|
•
|
On 12 June 2024, the Group
completed the sale of a freehold property for consideration of £2.9
million.
|
|
•
|
The Board remains confident of the
Group's ability to deliver long-term shareholder value with the
business well positioned to recover strongly as market conditions
improve.
|
John Richards, Chairman of Brickability,
said:
"Over the past year there have been a number of
well-documented challenges impacting the housebuilding and RMI
markets. Against this macro backdrop, the Group has continued to
demonstrate resilience and deliver a robust financial performance.
It is particularly pleasing to see the Group's strategic focus on
diversification of products and end markets yielding benefits.
This, coupled with our capital-efficient business model and
continued focus on disciplined capital allocation and cost control,
has been a key driver of our resilience. The results we achieved
this year are thanks to the dedication and determination of our
people, who look to consistently deliver excellent service while
seizing opportunities as they arise."
|
(1)
|
Like-for-like revenue is a measure of growth in sales,
adjusted for the impact of acquisitions.
|
|
|
(2)
|
Earnings
before interest, tax, depreciation, amortisation and other
non-underlying items (See Financial Review and note 5).
|
|
|
(3)
|
Statutory
profit before tax excluding non-underlying items (see Financial
Review and note 5).
|
|
|
(4)
|
Adjusted
profit after tax (statutory profit after tax before non-underlying
items) divided by the weighted average number of shares in the
year.
|
|
|
(5)
|
Bank
borrowings less cash.
|
|
|
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
|
+44 (0) 207 418 8900
|
|
Montfort Communications (Financial PR)
James Olley
|
+44 (0)
203 514 0897
brickability@montfort.london
|
|
Ella Henderson
|
|
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 professionals, 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.
Chairman's Statement
Overview
Over the past year, there have
been a number of well-documented challenges impacting the
housebuilding and RMI markets. Against this macroeconomic backdrop,
the Group has continued to demonstrate resilience and deliver a
robust financial performance.
It is particularly pleasing to see
the Group's strategic focus on diversification of products and end
markets yielding benefits. This, coupled with our capital-efficient
business model and continued focus on disciplined capital
allocation and cost control, has been a key driver of our
resilience.
This year the Group expanded
further into the cladding remediation market, acquiring two
fantastic businesses that benefit from strong forward order books.
Through these acquisitions we have also brought in new,
high-quality individuals, increasing the bandwidth of our existing
management team. We have an active acquisition opportunity
appraisal process which positions the Group well for future
inorganic expansion and we remain committed to pursuing strategic
opportunities aligned with our long-term objectives of building a
sustainable business and delivering value to
shareholders.
Whilst activity levels in the
housebuilding sector remain subdued, the longer-term underlying
fundamentals of our chosen markets remain strong. The Board
believes that, with leading positions across a diverse portfolio
offering, the Group is well-positioned to benefit from a recovery
in volumes. Following the recent General Election results, the
Group awaits further details from the Labour Government of their
housing recovery plan to boost house building.
This has been another successful
year for the Group. The results achieved are mostly thanks to the
commitment and hard work of all our colleagues within the Group's
businesses.
Acquisitions
We continue to focus on
diversifying our product portfolio and associated end markets
through acquisition, and it is pleasing to see the benefits from
this strategy emerging.
In October 2023, we completed the
first of two strategic acquisitions of specialist cladding
installation and remediation contractors, Group Topek Holdings
Limited ("Topek"). As a result of the acquisition, the Group
significantly increased its exposure to public and commercial end
markets and now has a full range of cladding capabilities including
design, fabrication, supply, and installation.
The acquisition of Topek Southern
Limited ("TSL") in January 2024, further improved the Group's
positioning in the cladding market. TSL specialises in delivering
façade systems, fire remediation, roofing, and curtain wall
solutions for live and occupied sites, acting as principal
contractor for commercial and industrial projects across the
UK.
The requirement for cladding
remediation in the UK has been of huge importance since 2017, and
with the additions of Topek and TSL to our portfolio, the Group has
created a full-service specialist cladding installation and
remediation contracting business with a national
presence.
With these fantastic businesses
come fantastic people. It has been a pleasure to welcome our new
colleagues to the Brickability Group.
Environmental, Social and Governance (ESG)
As part of our developing ESG
strategy, we are committed to delivering real and lasting impact to
the communities and environments of our places of
operation.
This year we commenced a
partnership with Earth Trust, an environmental charity dedicated to
ensuring everyone across the UK has access to green space, to help
fund its 'Inspiring Future Green Leaders' programme. Funding from
our Foundation Trust will enable Earth Trust to work with 450 more
children across 15 schools, focusing initially on schools in
Reading - close to our Group headquarters in Bracknell. Our Charity
of the Year was 'Heel and Toe', providing a range of therapies and
support for young people with Cerebral Palsy and other
disabilities.
On governance, the Board
recognises that high standards of corporate governance are
fundamental to the long-term success of the Group. We have followed
the QCA Corporate Governance Code since entering the public markets
in 2019 and will comply with the new QCA Code as published at the
end of the last calendar year.
Board and leadership
I would like to take a moment to
give special thanks to Alan Simpson, who stepped down from the role
of Chief Executive Officer and from the Board. Alan has been
instrumental in building the Group into the highly successful
business it is today, overseeing the IPO in 2019 and multiple
transformative acquisitions since. On behalf of the Board, I thank
Alan for his invaluable years of service and congratulate him for
his immense achievements.
We are delighted to have our new
CEO, Frank Hanna, on board. Frank has over 30 years' experience in
the construction industry, and as such I have known Frank for a
long time and have every confidence that the Group will continue to
grow and deliver value to shareholders under his
leadership.
People
I would like to extend my thanks
to the many colleagues within the Brickability Group, for their
continued dedication, commitment and hard work throughout the
year.
Dividends
The Group paid an interim dividend
of 1.07 pence per share on 22 February 2024, which reflected the
performance of the business and the Board's confidence in the
longer-term outlook.
These financial results, coupled
with the strength of the balance sheet and the confidence in the
future performance of the Group, enables the Board to recommend a
final dividend for the year ended 31 March 2024 of 2.28 pence per
share, which would bring the total dividend for the year to 3.35
pence, representing a 6% increase over the prior year.
John Richards
Chairman
15 July 2024
Chief Executive's Review
I am pleased to be able to report,
early into my tenure as CEO, that the Group delivered a resilient
performance for the financial year. I consider this a notable
achievement against the backdrop of an uncertain economic
environment and a decline in volumes that continued throughout the
financial year. This stands as a testament to the hard work and
resilience of all Brickability employees, as well as the successful
execution of the Group's diversification strategy.
The Group successfully completed
two strategically significant acquisitions in the second half of
the financial year. These acquisitions continue the successful
diversification strategy of the Group, enabling the Group to become
a full-service specialist cladding installation and remediation
contracting business with national presence.
Whilst revenue fell compared to
prior year, gross profit margin was strong at 17.8% (2023: 16.6%).
The improvement was supported by a part-year contribution from the
higher margin acquisitions, but also improved revenue mix within
the existing business divisions, notably the full-year performance
of HBS NE (trading as UPOWA)
with its enhanced focus on higher margin solar
installations for new build homes.
The four divisions, now in the
second year of operation, continue to bring benefits in terms of
alignment of processes and routines. In
this agile, capital light structure, the
Group's four distinct business divisions are set out
below:
|
•
|
Bricks and Building Materials - 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;
|
|
•
|
Importing - 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;
|
|
•
|
Distribution - focuses on the
sale and distribution of a wide range of products, including
windows, doors, radiators and associated parts and accessories;
and
|
|
•
|
Contracting - provides
cladding, fire remediation, flooring and roofing installation
services within the residential construction sector and commercial
sector.
|
Full details of our divisions and
each of our businesses can be found at https://brickabilitygroupplc.com.
Bricks and Building Materials Division 68% (2023: 73%) of
Group Revenue
Revenue of £403.2 million
(including internal revenues of £5.7 million (2023: £8.1 million))
for the year ended 31 March 2024 was down £95.4 million on the
prior year (2023: £498.6 million), with like-for-like revenue
decline of 19.1%. Excluding timber, like-for-like revenue decline
was 20.0%. Adjusted EBITDA of £24.4 million for the year ended 31
March 2024 was down £5.7 million on the prior year (2023: £30.1
million).
The impact of weaker economic
conditions that have impacted the housing market, especially the
new build sector, is reflected in the results of the
division. Brick volumes have declined by 28%, which is in line
with the market reductions over the financial year. The benefits in
the first half of the year of annualised brick supplier price
increases helped partially mitigate the impact of volume
decline.
Whilst brick volumes are the main
driver of the division, the performance of other sectors and the
continued growth of higher margin cladding supply businesses led to
margins of the division being maintained.
Relative to the market, Taylor,
Maxwell & Co performed strongly due to focussed growth in the
commercial and social housing sectors. Growth was also seen in the
cladding sector, with near double-digit revenue growth in SBS
Cladding due to ongoing projects, which are anticipated to continue
into the new financial year. The performance of the Timber
division was recognised by the industry, winning both Timber Trade
of the Year and Softwood Trade: Importer of the year at this year's
Timber Trade Journal Awards.
During the financial year, the
buyout process for the defined benefit pension scheme was completed
and the full liability transferred to an insurance company. The
Group now only operates a defined contribution pension
scheme.
Importing Division 16% (2023: 17%) of Group
Revenue
Revenue of £94.8 million
(including internal revenues of £18.1 million (2023: £30.7
million)) for the year ended 31 March 2024 was down £22.8 million
on the prior year (2023: £117.6 million), with like-for-like
revenue decline of 34.3%. Adjusted EBITDA at £7.9 million for the
year ended 31 March 2024 was down £5.3 million on the prior year
(2023: £13.2 million).
The reported revenue was supported
by the full-year inclusion of the acquisitions made in the prior
financial year of Modular Clay Products, E. T. Clay Products and
Heritage Clay Tiles. The weaker economic conditions impacting the
housing market had a greater impact on the demand for strategically
imported bricks, as softer demand results in more availability of
domestically manufactured bricks. Imported brick volumes fell 40%,
broadly in line with the estimated industry
decline.
This decline in demand put
pressure on pricing, which resulted in margins declining 288 basis
points in the year. It remains our expectation that performance in
the division will improve when overall brick market demand reverts
to more favourable levels. Our flexible supply chain will allow us
to react quickly when this happens.
Distribution Division 11% (2023: 9%) of Group
Revenue
Revenue of £62.7 million
(including internal revenues of £1.1 million (2023: £0.4 million))
for the year ended 31 March 2024 was marginally down £0.3 million
on the prior year (2023: £63.0 million) with like-for-like revenue
decline of 0.4%. Adjusted EBITDA at £7.6 million for the year ended
31 March 2024 was down £1.3 million on the prior year (2023: £8.9
million).
Revenue growth was seen across the
majority of the businesses within the Distribution division, led by
UPOWA. UPOWA grew through the year, focussing on national
housebuilders as the demand for renewable forms of energy
expands.
Towelrads, after many years of
strong growth, saw a single-digit decline in revenue, with the
reduction in housing starts mitigated in part by growth from new
products and customers.
FSN Doors growth has continued in
the mid-range bracket of the market, along with Forum Tiles as it
continues to develop its product offering and grow its customer
base.
Contracting Division 10% (2023: 6%) of Group
Revenue
Revenue of £58.2 million
(including internal revenues of £0.0 million (2023: £0.2 million))
for the year ended 31 March 2024 was up £16.9 million on the prior
year (2023: £41.3 million) with like-for-like revenue growth of
1.9%. Adjusted EBITDA at £10.1 million for the year ended 31 March
2024 was up £4.5 million on the prior year (2023: £5.6
million).
The division grew both through
organic performance as well as through the significant acquisitions
made in the second half of the financial year. Topek was acquired
in October 2023, and TSL in January 2024. Together they complement
the Group's existing cladding portfolio, including Taylor Maxwell
Cladding, SBS Cladding, and Architectural Facades, meaning that the
Group now benefits from a full range of cladding capabilities
including design, fabrication, supply, and installation.
In addition, and reflecting the
Group's continued diversification strategy, the acquisitions
increase the Group's presence specialist areas in the cladding and
fire remediation sector. Both acquisitions are performing as
expected with integrations proceeding to plan, and both are
experiencing strong forward order books as part of the enlarged
Group.
The organic growth arose through
ongoing contracts with house builders, both in the new build sector
and with medium to high-end developers in the South East of
England, as well as being supported by one-off contract wins
resulting from a competitor going into administration. Margins have
continued to recover, driven by the recovery of material price
inflation. The division expects the unfavourable economic
conditions that have impacted house building to be felt in the
following financial year.
The margin of the division
increased 376 basis points on a reported basis reflecting the
margin recovery across the roofing business in addition to the
margin accretion driven by the acquisitions.
Outlook
The Group's 2024 results, set
against a challenging economic backdrop, highlight the strength and
growing resilience of the Brickability model. As the Group
continues to diversify, we increase our exposure to an expanding
range of specialist products and services to the UK construction
industry, and at the same time we remain committed to growing in a
sustainable manner. Brickability is able to successfully meet the
demands and requirements of customers through long-standing
relationships with customers and suppliers, consistently delivering
a high-quality service.
Whilst the short-term outlook for
the housing market sector is expected to experience further
softness despite some encouraging macro indicators, there remains a
fundamental and significant disconnect between house formations and
the building of new homes. As a Group, we remain cautious and our
priority remains unchanged as we aim to secure strong order intakes
with clear and sustainable margins. The Board believes that the
Group's diversified multi-business strategy positions it well to
benefit from improved economic conditions when they arise. Trading
in the current financial year to date is in line with management's
expectations.
Finally, I would like to
acknowledge the significant contribution Alan Simpson has made to
the Group and I am delighted to be able to take over the role of
CEO from him. Alan's continued support to the Group in a non-board
capacity will be invaluable, and I look forward to working with
him, the rest of the Board and all the employees in the coming
years to further develop and strengthen Brickability.
Frank Hanna
Chief Executive Officer
15 July 2024
Financial Review
The financial results for the year
reflect a combination of resilient performance across the
divisions, along with the contribution from acquisitions made in
the year and the annualisation of those acquisitions completed in
the prior year.
Revenue
Revenue totalled £594.1 million
for the year ended 31 March 2024. This represented a decrease of
12.8% compared to the previous year (2023: £681.1 million). Group
like-for-like revenue decrease was 17.9% versus growth of 4.0% in
2023.
|
Division
|
(Unaudited)
2024
|
(Audited)
2023
|
% Change
|
% Change
|
|
£m
|
£m
|
|
LFL
|
|
Bricks and Building
Materials
|
403.2
|
498.6
|
(19)%
|
(19)%
|
|
Importing
|
94.8
|
117.6
|
(19)%
|
(34)%
|
|
Distribution
|
62.7
|
63.0
|
(0)%
|
(0)%
|
|
Contracting
|
58.2
|
41.3
|
41%
|
2%
|
|
Group eliminations
|
(24.8)
|
(39.4)
|
(37)%
|
(37)%
|
|
Total
|
594.1
|
681.1
|
(13)%
|
(18)%
|
Gross Profit
Gross profit for the year
decreased to £105.8 million from £112.9 million. Gross profit
margin has increased notably by 120 basis points to 17.8%. This is
driven by the impact of the two acquisitions in the second half of
the financial year, together with improved gross profit mix across
the divisions.
Statutory and Adjusted Profit, and Adjusted
EBITDA
Statutory profit before tax of
£21.4 million (2023: £34.5 million) includes other items of £13.9
million (2023: £10.1 million), which are not considered to be part
of the Group's underlying operations. These are analysed as
follows:
|
|
(Unaudited)
2024
|
(Audited)
2023
|
|
£'000
|
£'000
|
|
Statutory profit before tax
|
21,444
|
34,527
|
|
Acquisition costs
|
828
|
281
|
|
Refinancing costs
|
111
|
-
|
|
IT transformational
costs
|
295
|
-
|
|
Earn-out consideration classified
as remuneration under IFRS 3
|
4,944
|
5,483
|
|
Share-based payment
expense
|
1,456
|
1,567
|
|
Amortisation of intangible
assets
|
10,233
|
8,399
|
|
Unwinding of discount on
contingent consideration
|
2,418
|
2,891
|
|
Share of post-tax profit of equity
accounted associates
|
(71)
|
(123)
|
|
Fair value (gains) on contingent
consideration
|
(6,352)
|
(8,432)
|
|
Total other items before tax
|
13,862
|
10,066
|
|
Adjusted profit before tax
|
35,306
|
44,593
|
|
Depreciation and
amortisation
|
5,672
|
4,715
|
|
Finance income
|
(584)
|
(143)
|
|
Finance expenses
|
4,538
|
2,365
|
|
Adjusted EBITDA
|
44,932
|
51,530
|
Adjusted EBITDA is defined as
earnings before interest, tax, depreciation, amortisation
and other non-underlying items.
Adjusted EBITDA decreased by 12.8%
to £44.9 million (2023: £51.5 million) for the year ended 31 March
2024. The impact of the economic slowdown in the new building
housing market was reflected in two of the divisions experiencing
like-for-like revenue decline in the year, with Distribution
broadly in line with the prior financial year and Contracting
marginally ahead. Earn-out consideration
classified as remuneration relates to Modular Clay Products and
Taylor Maxwell (2023: Modular Clay Products and Taylor Maxwell),
with both tracking in line with expectations. IT transformational
costs relate to external consultant costs in relation to a
strategic review of the Group's current IT architecture. Fair value
movements on contingent consideration result in a gain of £6.4
million (2023: gain of £8.4 million). This relates to the movements
in E. T. Clay Products and Heritage Clay Tiles being impacted by
lower levels of demand, as well as the slowdown in the building in
new homes further impacting UPOWA's anticipated growth
trajectory.
Taxation
The statutory charge for taxation
was £6.1 million (2023: £6.8 million), an effective rate of
taxation (Tax expense divided by Profit Before Tax) of 28.4% (2023:
19.8%). The effective rate for the year is higher than the
statutory rate of corporation tax of 25% mainly due to the effect
of non-deductible expenses from a tax perspective.
Earnings Per Share
Basic EPS for the year was 5.06p
(2023: 9.26p), a decrease of 45.4%. The Group also reported an
adjusted underlying EPS, which adjusts for the impact of the other
items analysed in the table above. Adjusted EPS for the year was
8.66 pence (2023: 11.93 pence) per share, a decrease of 27.4%. The
increase in the statutory rate of corporation tax reduced EPS by
0.63 pence, representing 5.3% of the 27.4% year-on-year
decrease.
Dividends
Following a resilient trading
performance for the financial year and also in recognition of the
strength of the balance sheet at the year-end, the Board is
recommending a final dividend of 2.28 pence per share, bringing the
full-year dividend to 3.35 pence per share.
Subject to approval by
shareholders, the final dividend will be paid on 26 September 2024,
with a record date of 30 August 2024 and an ex-dividend date of 29
August 2024.
Balance sheet
Inventories at £29.8 million
(2023: £33.2 million) decreased largely as a reflection of the
reduced trading levels. The decrease in both 'trade and other
receivables', and 'trade and other payables' on the balance sheet
were in line with expectations having taken into account the impact
of acquisitions, with the net cashflow impact reflecting similar
working capital movements to prior year.
Cash Flow and Net Debt
Operating cash flows before
movements in working capital decreased to £38.5 million from £46.2
million in 2023. Cash generated from operations decreased to £35.4
million from £44.9 million.
At 31 March 2024, the Group had
net debt (borrowings less cash) of £56.5 million which compares to
net debt of £8.0 million at the prior year-end. The main components
of the cash outflows are: additional investment in property, plant
and equipment of £6.1 million (2023: £7.2 million), tax paid of
£8.6 million (2023: £11.1 million), the initial payments for three
new subsidiaries net of cash acquired of £42.8 million (2023: £12.0
million), loans to the joint venture of £2.1 million (2023: £3.0
million), and the payment of deferred consideration, in relation to
prior year acquisitions, of £5.2 million (2023: £3.5 million).
Dividends of £9.9 million (2023: £9.1 million) were also paid in
the year. We continue to expect that the Brickability Group will
remain a business that is cash generative.
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
£80 million. As at the year end, the RCF facility has reduced to
£98 million and the Group had utilised £63.5 million of the
facility.
Post balance sheet events
In May 2024, the Group committed
to selling a property, and associated fixtures and fittings, that
had a carrying value of £2.6 million at the year end. The
consideration from the sale of the property is expected to be in
line with the carrying value of the assets.
On 12 June 2024, the Group
completed the sale of a freehold property for consideration of £2.9
million.
Going Concern
The Directors are confident,
having made appropriate enquiries, that the Company and the Group
have adequate resources to continue in operational existence for
the foreseeable future. Accordingly, they continue to adopt the
going concern basis in preparing the financial
statements.
Mike Gant
Chief Financial Officer
15 July 2024
Consolidated Statement of Profit or Loss and Other
Comprehensive Income
For
the year ended 31 March 2024
|
|
|
2024
(Unaudited)
|
|
2023
(Audited)
|
|
|
|
Adjusted
|
Other
|
Total
|
|
Adjusted
|
Other
|
Total
|
|
|
|
|
(note 5)
|
|
|
|
(note
5)
|
|
|
|
Note
|
£'000
|
£'000
|
£'000
|
|
£'000
|
£'000
|
£'000
|
|
Revenue
|
|
594,076
|
-
|
594,076
|
|
681,087
|
-
|
681,087
|
|
Cost of
sales
|
|
(488,240)
|
-
|
(488,240)
|
|
(568,220)
|
-
|
(568,220)
|
|
Gross
profit
|
|
105,836
|
-
|
105,836
|
|
112,867
|
-
|
112,867
|
|
|
|
|
|
|
|
|
|
|
|
Other
operating income
|
|
1,197
|
-
|
1,197
|
|
561
|
-
|
561
|
|
Administrative expenses
|
|
(66,130)
|
(17,867)
|
(83,997)
|
|
(64,281)
|
(15,730)
|
(80,011)
|
|
Comprising:
|
|
|
|
|
|
|
|
|
|
Depreciation and amortisation
|
|
(5,672)
|
(10,233)
|
(15,905)
|
|
(4,715)
|
(8,399)
|
(13,114)
|
|
Other
administrative expenses
|
|
(60,458)
|
(7,634)
|
(68,092)
|
|
(59,566)
|
(7,331)
|
(66,897)
|
|
Impairment losses on financial assets
|
|
(1,643)
|
-
|
(1,643)
|
|
(1,611)
|
-
|
(1,611)
|
|
Finance
income
|
|
584
|
-
|
584
|
|
143
|
-
|
143
|
|
Finance
expense
|
|
(4,538)
|
(2,418)
|
(6,956)
|
|
(2,365)
|
(2,891)
|
(5,256)
|
|
Share of
post-tax profit of equity accounted associates
|
|
-
|
71
|
71
|
|
-
|
123
|
123
|
|
Share of
post-tax loss of equity accounted joint ventures
|
|
-
|
-
|
-
|
|
(721)
|
-
|
(721)
|
|
Fair
value gains
|
|
-
|
6,352
|
6,352
|
|
-
|
8,432
|
8,432
|
|
Profit/(loss) before
tax
|
|
35,306
|
(13,862)
|
21,444
|
|
44,593
|
(10,066)
|
34,527
|
|
Tax
(expense)/credit
|
|
(8,993)
|
2,913
|
(6,080)
|
|
(8,924)
|
2,094
|
(6,830)
|
|
Profit/(loss) for the
year
|
|
26,313
|
(10,949)
|
15,364
|
|
35,669
|
(7,972)
|
27,697
|
|
|
|
|
|
|
|
|
|
|
|
Other comprehensive
income
|
|
|
|
|
|
|
|
|
|
Items
that will not be reclassified to profit or loss:
|
|
|
|
|
|
|
|
|
|
Remeasurements of defined benefit pension schemes
|
|
-
|
(16)
|
(16)
|
|
-
|
43
|
43
|
|
Deferred
tax on remeasurement of defined benefit pension schemes
|
|
-
|
4
|
4
|
|
-
|
(11)
|
(11)
|
|
Fair
value gain on investments in equity instruments designated as
FVTOCI
|
|
-
|
-
|
-
|
|
-
|
10
|
10
|
|
Other comprehensive
(loss)/income for the year
|
|
-
|
(12)
|
(12)
|
|
-
|
42
|
42
|
|
Total comprehensive
income/(loss)
|
|
26,313
|
(10,961)
|
15,352
|
|
35,669
|
(7,930)
|
27,739
|
|
|
|
|
|
|
|
|
|
|
|
Profit/(loss) for the year
attributable to:
|
|
|
|
|
|
|
|
|
|
Equity
holders of the parent
|
|
26,316
|
(10,949)
|
15,367
|
|
35,710
|
(7,972)
|
27,738
|
|
Non-controlling interests
|
|
(3)
|
-
|
(3)
|
|
(41)
|
-
|
(41)
|
|
|
|
26,313
|
(10,949)
|
15,364
|
|
35,669
|
(7,972)
|
27,697
|
|
|
|
|
|
|
|
|
|
|
|
Total comprehensive
income/(loss) attributable to:
|
|
|
|
|
|
|
|
|
|
Equity
holders of the parent
|
|
26,316
|
(10,961)
|
15,355
|
|
35,710
|
(7,930)
|
27,780
|
|
Non-controlling interests
|
|
(3)
|
-
|
(3)
|
|
(41)
|
-
|
(41)
|
|
|
|
26,313
|
(10,961)
|
15,352
|
|
35,669
|
(7,930)
|
27,739
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per
share
|
|
|
|
|
|
|
|
|
|
Basic
earnings per share
|
7
|
|
|
5.06
p
|
|
|
|
9.26 p
|
|
Diluted
earnings per share
|
7
|
|
|
4.96
p
|
|
|
|
9.10 p
|
|
Adjusted
basic earnings per share
|
7
|
8.66
p
|
|
|
|
11.93 p
|
|
|
|
Adjusted
diluted earnings per share
|
7
|
8.49
p
|
|
|
|
11.71 p
|
|
|
All results relate to continuing
operations.
Consolidated Balance Sheet
As
at 31 March 2024
|
|
|
(Unaudited)
2024
|
(Audited)
2023
|
|
|
Note
|
£'000
|
£'000
|
|
|
|
|
|
|
Non-current
assets
|
|
|
|
|
Property,
plant and equipment
|
|
26,859
|
24,783
|
|
Right of
use assets
|
|
21,483
|
18,553
|
|
Intangible assets
|
|
225,728
|
152,424
|
|
Investments in equity accounted associates
|
|
335
|
324
|
|
Investments in equity accounted joint ventures
|
|
-
|
-
|
|
Investments in financial assets
|
|
-
|
188
|
|
Trade and
other receivables
|
|
7,123
|
3,611
|
|
Total non-current
assets
|
|
281,528
|
199,883
|
|
|
|
|
|
|
Current
assets
|
|
|
|
|
Inventories
|
|
29,842
|
33,159
|
|
Trade and
other receivables
|
|
112,804
|
125,603
|
|
Contract
assets
|
|
6,532
|
-
|
|
Employee
benefit assets
|
|
390
|
646
|
|
Current
income tax assets
|
|
1,807
|
1,677
|
|
Cash and
cash equivalents
|
|
15,581
|
21,645
|
|
|
|
166,956
|
182,730
|
|
Assets
classified as held for sale
|
|
2,555
|
-
|
|
Total current
assets
|
|
169,511
|
182,730
|
|
Total
assets
|
|
451,039
|
382,613
|
|
|
|
|
|
|
Current
liabilities
|
|
|
|
|
Trade and
other payables
|
|
(116,798)
|
(131,419)
|
|
Loans and
borrowings
|
|
(8,620)
|
(12,624)
|
|
Lease
liabilities
|
|
(3,907)
|
(3,225)
|
|
Total current
liabilities
|
|
(129,325)
|
(147,268)
|
|
|
|
|
|
|
Non-current
liabilities
|
|
|
|
|
Trade and
other payables
|
|
(24,078)
|
(9,592)
|
|
Loans and
borrowings
|
9
|
(62,911)
|
(16,800)
|
|
Lease
liabilities
|
|
(15,137)
|
(12,967)
|
|
Provisions
|
|
(2,904)
|
(2,364)
|
|
Deferred
tax liabilities
|
|
(24,806)
|
(18,244)
|
|
Total non-current
liabilities
|
|
(129,836)
|
(59,967)
|
|
Total
liabilities
|
|
(259,161)
|
(207,235)
|
|
Net assets
|
|
191,878
|
175,378
|
|
|
|
|
|
|
Equity
|
|
|
|
|
Called up
share capital
|
|
3,195
|
3,003
|
|
Share
premium account
|
|
102,908
|
102,847
|
|
Capital
redemption reserve
|
|
2
|
2
|
|
Share-based payment reserve
|
|
4,864
|
3,509
|
|
Merger
reserve
|
|
20,548
|
11,146
|
|
Retained
earnings
|
|
60,495
|
55,002
|
|
Equity attributable to
owners of the Company
|
|
192,012
|
175,509
|
|
Non-controlling interests
|
|
(134)
|
(131)
|
|
Total
equity
|
|
191,878
|
175,378
|
Consolidated Statement of Changes in
Equity
For
the year ended 31 March 2024
Consolidated Statement of Cash Flows
For
the year ended 31 March 2024
|
|
|
(Unaudited)
2024
|
(Audited)
2023
|
|
|
Note
|
£'000
|
£'000
|
|
Operating
activities
|
|
|
|
|
Profit
for the year
|
|
15,364
|
27,697
|
|
Adjustments
for:
|
|
|
|
|
Depreciation of property, plant and equipment
|
|
1,736
|
1,566
|
|
Depreciation of right of use assets
|
|
3,901
|
3,101
|
|
Amortisation of intangible assets
|
|
10,268
|
8,447
|
|
Gain on
disposal of property, plant and equipment and right of use
assets
|
|
(131)
|
(314)
|
|
Foreign
exchange (gains)/losses
|
|
(64)
|
29
|
|
Share-based payment expense
|
|
1,292
|
1,567
|
|
Other
operating income
|
|
(1,066)
|
(365)
|
|
Share of
post-tax profit in equity accounted associates
|
|
(71)
|
(123)
|
|
Share of
post-tax loss in joint ventures
|
|
-
|
721
|
|
Fair
value changes in contingent consideration
|
|
(6,352)
|
(8,176)
|
|
Gain on
acquisition
|
|
-
|
(256)
|
|
Movements
in provisions
|
|
8
|
(141)
|
|
Finance
income
|
|
(584)
|
(143)
|
|
Finance
expense
|
|
6,956
|
5,256
|
|
Acquisition costs
|
5
|
939
|
281
|
|
Income
tax expense
|
|
6,080
|
6,830
|
|
Pension
charge in excess of contributions paid
|
|
267
|
196
|
|
Operating cash flows before
movements in working capital
|
|
38,543
|
46,173
|
|
|
|
|
|
|
Changes in working
capital:
|
|
|
|
|
Increase/(decrease) in inventories
|
|
3,323
|
(865)
|
|
Decrease
in trade and other receivables
|
|
14,404
|
19,331
|
|
Decrease
in trade and other payables
|
|
(20,861)
|
(19,765)
|
|
Cash generated from
operations
|
|
35,409
|
44,874
|
|
|
|
|
|
|
Payment
of acquisition expenses
|
|
(828)
|
(281)
|
|
Interest
received
|
|
557
|
125
|
|
Income
taxes paid
|
|
(8,581)
|
(11,074)
|
|
Net cash from operating
activities
|
|
26,557
|
33,644
|
|
|
|
|
|
|
Investing
activities
|
|
|
|
|
Purchase
of property, plant and equipment
|
|
(6,144)
|
(7,229)
|
|
Proceeds
from sale of property, plant and equipment
|
|
193
|
441
|
|
Purchase
of right of use assets
|
|
(38)
|
(2,525)
|
|
Purchase
of intangible assets
|
|
(325)
|
(478)
|
|
Acquisition of subsidiaries
|
8
|
(42,787)
|
(11,998)
|
|
Acquisition of interests in joint ventures
|
|
-
|
(442)
|
|
Loan to
Joint Venture
|
|
(2,056)
|
(2,960)
|
|
Proceeds
from sale of other investments
|
|
188
|
-
|
|
Dividends
received from associates
|
|
60
|
60
|
|
Net cash used in investing
activities
|
|
(50,909)
|
(25,131)
|
|
|
|
|
|
|
Financing
activities
|
|
|
|
|
Equity
dividends paid
|
6
|
(9,862)
|
(9,143)
|
|
Proceeds
from issue of ordinary shares net of share issue costs
|
|
82
|
719
|
|
Payment
of financing costs
|
|
(111)
|
-
|
|
Proceeds
from bank borrowings
|
|
262,500
|
115,400
|
|
Repayment
of bank borrowings
|
|
(216,351)
|
(123,000)
|
|
Payment
of lease liabilities
|
|
(3,623)
|
(2,791)
|
|
Payment
of deferred and contingent consideration
|
|
(5,240)
|
(3,499)
|
|
Interest
paid
|
|
(4,304)
|
(2,246)
|
|
Payment
of transaction costs relating to loans and borrowings
|
|
(700)
|
-
|
|
Net cash flows from/(used
in) financing activities
|
|
22,391
|
(24,560)
|
|
Net
decrease in cash and cash equivalents
|
|
(1,961)
|
(16,047)
|
|
Cash and
cash equivalents at beginning of year
|
|
9,021
|
25,028
|
|
Effect of
changes in foreign exchange rates
|
|
(99)
|
40
|
|
Cash and cash equivalents at
end of year
|
|
6,961
|
9,021
|
Notes to the Preliminary Results
Year ended 31 March 2024
1. General information
This announcement was approved by
the Board of Directors on 15 July 2024.
Brickability Group PLC is a
company incorporated in England and Wales (registration number
11123804). The address of the registered office is South Road,
Bridgend Industrial Estate, Bridgend, United Kingdom CF31
3XG.
The financial information set out
above does not constitute the Group's statutory financial
statements for the year ended 31 March 2024 or 2023 but is derived
from these financial statements. Statutory financial statements for
2023 have been delivered to the Registrar of Companies and those
for 2024 will be delivered by 30 September 2024. The auditor
reported on the statutory financial statements for the year ended
31 March 2023; their report was unqualified, did not draw attention
to any matters by way of emphasis and did not contain a statement
under Section 498(2) or (3) of the Companies Act 2006. The audit of
the statutory financial statements for the year ended 31 March 2024
is not yet complete. These financial statements will be finalised
on the basis of the financial information presented by the
Directors in this preliminary announcement and will be delivered to
the Registrar of Companies following the Group's Annual General
Meeting.
2. Basis of preparation
The financial information
has been prepared in accordance with UK adopted
international accounting standards in conformity with the
requirements of the Companies Act 2006.
The financial information
presented in pounds sterling, which is the functional currency of
the Company and Group. Amounts are rounded to the nearest thousand,
unless otherwise stated.
The financial information is
prepared on the historical cost basis, with the exception of
certain financial assets and liabilities which are stated at fair
value.
Going Concern
The key uncertainty faced by the
Group is the demand for its products and how these are impacted by
economic factors.
After reviewing the Group's
forecasts and risk assessments and making other enquiries, the
Board have come to the conclusion that for the period of review
there is a reasonable expectation that the Group has adequate
resources to continue in operational existence.
Budget scenarios have been
prepared to compare a number of outcomes where there is a
significant and prolonged drop in demand in the
industry.
For each scenario, cash flow and
covenant compliance forecasts have been prepared. A drop in revenue
of 56% with no adjustment to overheads would lead to a breach.
However, if overheads were cut by 13%, then a breach could be
avoided.
In another scenario, if revenue
dropped 61% and overheads remained the same, saving cash by £7m
p.a. through cutting discretionary Capex and a reduction in the
dividend would prevent a breach. These scenarios in terms of
revenue falling by these levels so rapidly are considered
remote.
Having taken into account the
scenarios modelled, the Directors are satisfied that the Group has
sufficient resources to continue to operate for a period of not
less than 12 months from the date of this report and until at least
30 Sept 2025. Accordingly, the consolidated financial information
has been prepared on a going concern basis.
New standards, interpretations and amendments not yet
effective from 1 January 2023
The following standards and
amendments became effective for the current financial
year:
|
•
|
Insurance Contracts (Amendments to
IFRS 17);
|
|
•
|
Disclosure of Accounting Policies
(Amendments to IAS 1 and IFRS Practice Statement 2);
|
|
•
|
Definition of Accounting Estimates
(Amendments to IAS 8);
|
|
•
|
Deferred Tax Related to Assets and
Liabilities arising from a Single Transaction (Amendments to IAS
12); and
|
|
•
|
International Tax Reform - Pillar
Two Model Rules (Amendments to IAS 12).
|
The amendments above did not have
a material impact on the amounts recognised in prior periods or the
current year.
New standards, interpretations and amendments not yet
effective
Certain new standards and
amendments have been issued by the IASB and will be effective in
future accounting periods. The standards and amendments that are
not yet effective, are likely to impact the Group and have not been
adopted early by the Group include:
Amendments effective from 1
January 2024:
|
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IFRS 16 Leases (Amendment -
Liability in a sale and leaseback);
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IAS 1 Presentation of Financial
Statements (Amendment - Classification of liabilities as current or
non-current);
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IAS 1 Presentation of Financial
Statements (Amendment - Non-current liabilities with covenants);
and
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IAS 7 Statement of Cash Flows and
IFRS 7 Financial Instruments: Disclosures (Amendment - Supplier
Finance Arrangements).
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Amendments effective from 1
January 2025:
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IAS 21 The Effects of Changes in
Foreign Exchange Rates (Amendment - Lack of
exchangeability).
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The amendments listed above are
not expected to have any significant impact on the amounts
recognised in prior periods, current or future periods.
3. Segmental analysis
For management purposes, the Group
is organised into segments based on its products and services. The
Group's four distinct business divisions are set out
below:
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Bricks and Building Materials - 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;
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Importing - 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;
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Distribution - focuses on the
sale and distribution of a wide range of products, including
windows, doors, radiators and associated parts and accessories;
and
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Contracting - provides
cladding, fire remediation, flooring and roofing installation
services, primarily within the residential construction
sector.
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The Group's segments are strategic
business units that offer different products and services.
Operating segments are reported in a manner consistent with the
internal reporting provided to the chief operating decision-maker
(CODM). The Group considers the CODM to be the senior management
team, including the Board of Directors, who are responsible for
allocating resources and assessing performance of the operating
segments.
The accounting policies of the
reportable segments are the same as the Group's accounting
policies. Segment performance is evaluated based on Adjusted
EBITDA, without allocation of depreciation and amortisation,
finance expenses and income, impairment losses, fair value
movements or the share of results of associates and joint ventures.
This is the measure reported to the Board for the purpose of
resource allocation and assessment of segment
performance.
The Group's revenue is primarily
generated in the United Kingdom. Of the revenue generated in
Europe, £914,000 (2023: £229,000) is included within revenue from
the sale of goods within the Bricks and Building Materials segment
and £25,000 (2023: £111,000) is included within revenue from the
sale of goods within the Importing segment. The balance of
£1,428,000 (2023: £2,462,000) is included within revenue from the
rendering of services within the Importing segment. All of the
revenue generated in Other geographic locations is included within
revenue from the sale of goods within the Bricks and Building
Materials segment.
Revenue from the sale of goods and
rendering of services is analysed by segment below. Revenue from
the rendering of services within the Importing segment relates to
the provision of transportation and distribution services. Revenue
from the rendering of services within the Distribution segment
relates to solar panel installation services.
No individual customer accounts
for more than 10% of the Group's total revenue.