Brick manufacturer Michelmersh nearly doubled its profits in the first half of the year while its brick prices increased by 9%, the Group confirmed.
In the six months ended 30 June 2015, the Group said it had generated an operating profit of £2.7 million (2014: £1.4 million) and a profit before taxation of £2.5 million, almost doubling of that achieved in the first half of 2014 and not far short of the full year’s profit in 2014.
Turnover for the first six months of 2015 was 13% higher than the equivalent period in 2014 as a result of a combination of volume increases and improved average selling price, Michelmersh said.
Gross margin increased by 5.3% to 38.6% against the equivalent period in 2014 as a result of selling price increases. Administration costs have been held close to 2014 levels as opportunities to manage costs are continually explored.
Volumes of Michelmersh bricks sold in the first half rose to 36 million (H1 2014: 34 million), just over half of the annual capacity for the year.
Production in the period also increased from 34 to 35 million which means that stock levels have fallen further to circa 6 weeks sales, levels that cannot fall further whilst still able to provide a timely and reliable service to our customers, the company added.
Increased production is both a result of the increased capacity at Freshfield Lane along with strong production performances from all other sites. Average selling prices of the bricks achieved in the first half of the year were £422 per thousand, compared to £387 per thousand in the same period last year.
Eric Gadsden, chairman of Michelmersh Brick Holdings Plc, said: “The results for the first half of 2015 demonstrate that Michelmersh continues to make progress in the market.
“The sound financial base and strong management structures that have been developed over the past few years are now set to deliver continued and meaningful profits, cash flow and allow a continuing dividend stream.
“The Board is set to respond to the opportunities to increase productivity and efficiency through investment in plant and processes.”