Q2 2026 Michelmersh Brick Holdings PLC Earnings Call

September 1, 2026

Speaker #1: Good morning, and welcome to the Michelmersh Brick Holdings PLC Investor Presentation. Today we are joined by Chief Executive Officer, Ryan Marney. Questions are encouraged throughout this webinar and can be submitted via the Q&A box situated on the panel on the right-hand side of your screen.

Operator: Good morning, and welcome to the Michelmersh Brick Holdings PLC investor presentation. Today, we are joined by Chief Executive Officer, Ryan Mahoney. Questions are encouraged throughout this webinar and can be submitted via the Q&A box situated on the panel on the right-hand side of your screen. I will now hand over to Ryan Mahoney to begin the presentation.

Speaker #1: I will now hand over to Ryan Marney to begin the presentation.

Speaker #2: Thank you. Good afternoon, everybody, and welcome to the 2026 half-year results for Michelmersh. I know there are quite a few of you on the call, and I just want to give you a bit of a plan and running order for the presentation.

Ryan Mahoney: Thank you. Good afternoon, everybody, and welcome to the 2026 half year results for Michelmersh. I know there are quite a few of you on the call, and I just want to give you a bit of a plan, running order of the presentation. I am just going to give a brief overview. I know lots of you will know us very well. Then, I'll try and cover the half year results in relatively quick order, give you a bit of an outlook, and then try and allow lots of time for questions. Those of you who joined, very kindly in March, will know that there was quite a lot of interest in terms of questions post-presentation. So we'll try and ensure that our facilitator never gets a chance to ask what they want to ask of me today. So, about Michelmersh.

Speaker #2: I am just going to give a brief overview. I know lots of you will know us very, very well. Then I'll try and cover the half-year results in relatively quick order.

Speaker #2: I'll give you a bit of an outlook, and then try to allow plenty of time for questions. Those of you who joined very kindly in March will know that there was quite a lot of interest in terms of questions after the presentation.

Speaker #2: So we'll try and ensure that that facilitator never gets a chance to ask what they want to ask of me today. So, about Michelmersh.

Speaker #2: We are a premium brick and prefabricated brick manufacturer. We operate throughout the UK, with a further facility in Belgium. We have four principal lifetime revenue sources, and really, that's reflective of the lifecycle of the nature of our quarries more than anything else.

Ryan Mahoney: We are a premium brick and a prefabricated brick manufacturer. We operate throughout the UK with a further facility in Belgium. We have four principal lifetime revenue sources, and really that's reflective of the life cycle of the nature of our quarries more than anything else. We start by digging the clay out of the ground to manufacture the bricks. We put those bricks into prefabricated brick components and systems. Once we've consumed what we need or want from the land, that becomes what we call non-core and surplus, and that becomes treated as investment land. Before that element, if we need to fill the holes back in from digging out the raw materials and the clay, we operate and have licenses at our sites for landfill operations, but they are all dormant, but those sites are currently active or in investment land status.

Speaker #2: So, we start on the ground to manufacture the bricks. We put those bricks into prefabricated brick components and systems. Once we’ve consumed what we need or want from the land, that becomes what we call non-core and surplus, and that becomes treated as investment land.

Speaker #2: And before that element, if we need to fill the holes back in from digging out the raw materials and the clay, we operate and have licenses at our sites for landfill operations. They are all dormant because all sites are currently active or in investment land status.

Speaker #2: We've got the capacity for 120 million bricks to be made across our manufacturing facilities. We're not quite at those levels at the moment. I'll give you a bit more detail on that through the presentation.

Ryan Mahoney: We've got the capacity for 120 million bricks to be made across our manufacturing facilities. We're not quite at those levels at the moment. I'll give you a bit more detail of that through the presentation. We operate six market leading premium brands, and we have about 180 core products within our range, and you can see on the right-hand side there our areas of operation. Just turning then to the page on the key elements of our strategy. Very much focused on the premium end of the market, and very much focused on innovation and sustainability within that space. That does cover, as I said, premium bricks, pavers, and special shaped bricks.

Speaker #2: We operate six market-leading premium brands. We have about 180 core products within our range, and you can see on the right-hand side there our areas of operation.

Speaker #2: Turning now to the page on the key elements of our strategy. We are very much focused on the premium end of the market, and very much focused on innovation and sustainability within that space.

Speaker #2: And that does cover, as I said, premium bricks, pavers, and special treads, special shaped bricks. We look to address the full market demand, and particularly in what has been a very long trough.

Ryan Mahoney: We look to address the full market demand, particularly in what has been a very long trough. Those of you who have had the opportunity to read the RNS, again, you can see that the broader market is circa 25% down from our recent highs in 2022. The manner in which we try and navigate those markets is very much focused on targeting new builds, RMI, so repairs, maintenance, and improvements, as well as then a bucket of others, which is architectural specifications, schools, hospitals. At any one time, our plan very much is any one time if one of those markets is quieter, we look to try and drive opportunities in one of the other two major pillars there. We tend to sell through distribution, again, that limits the size and scope of the commercial team.

Speaker #2: And those of you who've had the opportunity to read the RNS, again, you can see that the broader market is roughly 25% down from our recent highs in 2022.

Speaker #2: And the manner in which we try and navigate those markets is very much focused on targeting new builds, RMIs—so, repairs, maintenance, and improvements—as well as then a sort of bucket of others, which is architectural specification, schools, hospitals, and any one time where our plan very much is, at any one time, if one of those markets is quieter, we look to try and drive opportunities in one of the other two major pillars there.

Speaker #2: We tend to sell through distribution, and again, that limits the size and scope of the commercial team. And again, that's very much been the run of how we've sold for many, many years.

Ryan Mahoney: Again, that has been very much the run of how we have sold for many, many years. As a result of that, we have very long-standing customer distribution relationships, which again, we see that as a really crucial part of underpinning our resilience. Again, those of you who had the opportunity to see the RNS will see that word "resilience" in many places. Fundamentally, our strength is underpinned by a strong balance sheet that has allowed us to take lots of decisions over the last few years, particularly, as I say, the markets have been undulating and unpredictable given the state of the broader construction markets. But very focused on maintaining that balance sheet strength as we look out, again, I will come on to talk about that in a bit more detail.

Speaker #2: So as a result of that, we have very long-standing customer and distributor relationships, which, again, we see as a really crucial part of underpinning our resilience.

Speaker #2: And again, those of you who've had the opportunity to see the RNS will see that word 'resilience' in many faces. Fundamentally, our strength is underpinned by a strong balance sheet.

Speaker #2: That's allowed us to make lots of decisions over the last few years, particularly, as I say, since the markets have been undulating and unpredictable given the state of the broader construction markets.

Speaker #2: But we are very focused on maintaining that balance sheet strength as we look ahead. Again, I'll come on to talk about that in a bit more detail.

Speaker #2: Just in terms of our capital allocation framework, we really clarified this first and foremost in September 2024. Those of you who joined calls back then will remember me talking about this and really trying to just be very, very clear.

Ryan Mahoney: Just in terms of capital allocation framework, we really clarified this first and foremost in September 2024. Those of you who joined calls back then will remember me talking about this and really trying to just be very, very clear with shareholders and stakeholders about how to think about the business and how we allocate our capital. I have talked about the strong balance sheet. It underpins all decisions really, but first and foremost, maintaining safe and efficient plants is absolutely our major priority. You will have seen if you followed results in 2024 and 2025, we have had an above normal cadence of capital investments. We put GBP 11 million into our sites over those two years, and you will have seen, if you have seen to those results, that we are again back to that normal level. Normal level we talk about is GBP 3 million to 4 million, investing in enhancing our facilities.

Speaker #2: With shareholders and stakeholders, about how to think about the business and how we allocate our capital. I've talked about the strong balance sheet—it underpins all decisions, really.

Speaker #2: But first and foremost, maintaining safe and efficient plants is absolutely our major priority. You will have seen, if you followed results in '24 and '25, we've had an above-normal cadence of capital investments.

Speaker #2: We put £11 million into our sites over those two years. And you will have seen, if you’ve seen today’s results, that we’re again back to that sort of normal level.

Speaker #2: At a normal level, we talk about £3 to £4 million invested in enhancing our facilities. So that's really the number to think about as a sort of steady state.

Ryan Mahoney: Normal level we talk about is GBP 3 million to 4 million, investing in enhancing our facilities.

Ryan Mahoney: That is really the number to think about on a steady state. Very much focused and respecting regular returns to shareholders. You can see that while the dividend has not grown over the last two years, we have maintained the dividend. Again, I feel like there are not too many examples of that within the construction sector, where that dividend and maintaining that steady dividend yield, has been an important facet of what we have been really looking to try to achieve. Again, sitting alongside dividends is the more flexible share buyback program. Again, you can just see on the box on the right in terms of the target there, very much talking about returning excess.

Speaker #2: We remain very much focused on and committed to regular returns to shareholders. You can see that, while the dividend hasn't grown over the last two years, we've maintained the dividend.

Speaker #2: And again, I feel like there are not too many examples of that within the construction sector, where that dividend and maintaining that steady dividend yield has been an important facet of what we've been really looking to try to achieve.

Speaker #2: And again, sitting alongside dividends is the more flexible share buyback program. And again, you can just see in the box on the right in terms of the target there.

Speaker #2: Very much talking about returning excess. So what we mean by excess is once we're into a net cash position again. So really explaining why, in a low net debt position at the moment—albeit today, you can see in the morning statement—we flagged our expectation of returning to cash next year and the sort of the minus five that's on the balance sheet at the 30th of June.

Ryan Mahoney: What we mean by excess is once we are into a net cash position again, so really explaining why in a low net debt position at the moment, albeit today, you can see in the morning statement, we flagged our expectation of returning to cash next year, and that the minus 5 that is on the balance sheet at 30 June, we expect that to be a low point in terms of where that borrowing position is. The important bit really in terms of the interim results and the overview. The key messages, if you leave with nothing this afternoon, it is really about the fact that this is a self-help period of the business and has been really for the last 12 to 18 months.

Speaker #2: We expect that to be a low point in terms of where that borrowing position is. Now, the important bit, really, in terms of the interim results and the overview...

Speaker #2: The key message—if you leave with nothing else this afternoon—is really about the fact that this is a self-help period for the business, and has been for the last 12 to 18 months.

Speaker #2: This has really been about managing, adapting, and flexing the business model and the manner in which we manufacture and operate, to allow us to adjust to the market conditions.

Ryan Mahoney: This has really been about managing, adapting, and flexing the business model and the manner in which we manufacture and operate to allow us to adjust to the market conditions. I think by my reckoning, we have probably had five false dawns since the start of 2023 where we thought that recovery was building some momentum, only to be impacted by another major macro factor, which you will all know on the call what they are. In terms of the bit of detail and why we talk about that resilience, the broader market is now down back again over 25%. Really that is reflective of just how challenging the construction sector is, and we measure that number by UK brick despatches, which is the government statistic, so we know that is a good indicator of where we are.

Speaker #2: And I think, by my reckoning, we probably had five false dawns since the start of 2023, where we thought that recovery was building some momentum.

Speaker #2: Only to be impacted by another major macro factor—which you'll all know on the call what they are. So, in terms of a bit of detail and why we talk about that resilience, the broader market is now down back again. That's reflective of just how challenging the construction sector is.

Speaker #2: And we measure that number by UK brick dispatches, which is the government statistic. So we know that that is a good indicator of where we are.

Speaker #2: Within that performance, our own revenue, our own top line performance is down nine and a half percent. But just unpacking that number a little bit, this has really made up of three major items.

Ryan Mahoney: Within that performance, our own revenue, our own top-line performance is down 9.5%. Just unpacking that number a little bit, this is really made up of three major items. Our own despatches are down about 2% period on period. Again, if you see that delta in terms of 9% for the broader sector, that is really where that outperformance has come from and where the indications are of having grown market share against the absolute UK brick despatch volumes. The second part of that is average selling prices. Again, if you have known and joined me on previous calls, you will know that we have really been trying to target stability of selling prices for our own customers. We have had a small 2% drop on average selling prices, and that is in a market which is highly competitive.

Speaker #2: Our own dispatches are down about 2% period-on-period. And again, if you see that delta in terms of 9% for the broader sector, that's really where that outperformance has come from, and where the indications are of having grown market share against the absolute UK brick dispatch volumes.

Speaker #2: The second part of that is average selling prices. Again, if you've known and joined me on previous calls, you'll know that we've really been trying to target stability of selling prices for our end customers.

Speaker #2: We've had a small 2% drop in average selling prices, and that is in a market which is highly, highly competitive. There are about half a billion—so 550 million—bricks on the ground in terms of inventory volumes across all the manufacturers in the UK.

Ryan Mahoney: There are about half a billion, say 550 million bricks on the ground in terms of inventory volumes across all the manufacturers in the UK. That has really facilitated a lot of pricing competition in terms of the behaviors of the brick manufacturers as everybody tries to chase cash-generating opportunities and to gain market share in a difficult market. The third element, and again, we have tried to be really clear on this is about a little bit of product mix. London and the Southeast particularly, where our Freshfield Lane and Michelmersh sort of southern sites, which are both soft mud producing sites. London and Southeast has been difficult for about two and a half to three years, and that really started with the legislation changes that came off the back of the Grenfell tragedy.

Speaker #2: And that has really facilitated a lot of pricing competition in terms of the behaviors of the brick manufacturers, as everybody tries to chase cash-generating opportunities and to gain market share in a difficult market.

Speaker #2: The third element, and again, we've tried to be really clear on this—this is about a little bit of product mix. London and the Southeast, particularly where our Freshfield Lane and Michelmersh sort of southern sites—which are both soft mud producing sites—London and the Southeast has been difficult for about two and a half to three years.

Speaker #2: And that really started with the legislative changes that came off the back of the Grenfell tragedy. And what essentially that did under Gateway 2 and Gateway 3 legislation is that it pushed forward the need for complete planning applications, as opposed to in the old days before Gateway 2 and 3, when you would do those plans in stages.

Ryan Mahoney: What essentially that did under Gateway Two and Gateway Three legislation is that pushed forward the need for complete planning applications as opposed to in the old days before Gateway Two and Three, you would do those plans in stages. What that allowed for was more progress to happen on site. What then happened was an absolute period of about 12 to 14 months where the market was delayed in London and the Southeast. Whilst that has alleviated, that has been replaced with challenges around consumer confidence and the changes in the cost base for developers. Therefore, the gross development values of the sites, particularly around London and the Southeast, have been under quite a lot of pressure, and therefore the ability to commit those sites has been more challenging.

Speaker #2: And so, what that allowed for was more progress to happen on site. What then happened was an absolute period of about 12 to 14 months where the market was delayed in London and the Southeast.

Speaker #2: Now, whilst that has alleviated, it has been replaced with challenges around consumer confidence and changes in the cost base for developers. Therefore, the gross development values of the sites, particularly around London and the Southeast, have been under quite a lot of pressure.

Speaker #2: And therefore, the ability to commit those sites has been more challenging. So, there is planning in place for lots of sites. But unfortunately, again, that sort of consumer confidence environment and that sentiment has been impacting progress there in terms of that specific part of the marketplace.

Ryan Mahoney: There is planning in place for lots of sites, but unfortunately again, that sort of consumer confidence environment and that sentiment has been impacting progress there in terms of that specific part of the marketplace. The other element to draw out is where the prefabricated portfolio is quite new build focused. We have been really trying to integrate those assets around our own brick sites on our own freehold sites. Equally, we have also had to move away from lower margin manufacturing, and that has been a deliberate path, a decision we have taken across the last six to 12 months really, which is to start to really try and take this portfolio into the more premium part of it. Lots of self-help that I talked about there very much has supported the margin improvement you can see on the second bullet on the left of the slide there.

Speaker #2: And then the other elements to draw out is where the prefabricated portfolio is quite new-build focused. We've been really trying to integrate those assets around our own brick sites on our own freehold sites.

Speaker #2: But equally, we have also had to move away from lower-margin manufacturing, and that's been a deliberate part of the decisions we've taken across the last 6 to 12 months, really, which is to start to really try and take this portfolio into the more premium part of it.

Speaker #2: A lot of the self-help I talked about there very much has supported the margin improvement, which you can see on the second bullet on the left of the slide there.

Speaker #2: And again, whilst revenue has absolutely dropped, and I've just run through that, we're very focused on self-help in terms of the cost base—controlling those elements that are within our gift.

Ryan Mahoney: Again, whilst revenue has absolutely dropped, and I have just run through that, very focused on self-help in terms of the cost base, controlling those elements that are within our gift. You can see that coming through in the margin improvement. Whilst we are in a sort of a GBP 5 million borrowing position, I have talked about that being the sort of the high point for us in terms of that level of debt. We see a stronger H2 in terms of cash collections and cash conversion in terms of taking that back towards that cash positive position. What have we done, I suppose, with regards to that self-help? This middle column is really facilitating that. We have been very focused.

Speaker #2: And you can see that coming through in the margin improvement. And whilst we are in a sort of £5 million borrowing position, I've talked about that being the high point for us in terms of that level of debt.

Speaker #2: And we see a stronger H2 in terms of cash collections and cash conversion, in terms of taking that back towards that cash positive position.

Speaker #2: What have we done? I suppose, with regards to that self-help and this middle column, it has really facilitated that. So we've been very focused in those two years I talked about, in terms of more clear CapEx investment.

Ryan Mahoney: In those two years I talked about in terms of more clear CapEx investment, what we were really trying to do there was pull forward the timing of capital improvement activities to give ourselves time for the market to improve. We have done that, and those sites have responded well off the back of that. What we have had to do now is, particularly at Freshfield Lane, we have had to take a more deliberate and targeted response, and we have slowed down production there by 30% at that key site in the south. Again, that is really because of the unique challenges within London and the Southeast. Equally, Michelmersh, which is the other southern site below the M4 corridor, that site was closed at the start of the year. We kept our people on who did a lot of the work themselves. They know their sites the best.

Speaker #2: What we were really trying to do there was pull forward the timing of capital improvement activities to give ourselves time for the market to improve.

Speaker #2: We’ve done that in those sites and responded well off the back of that. What we’ve had to do now is, particularly at Freshfield Lane, we have had to take a more deliberate and targeted response, and we have slowed down production there by 30% at that key site in the South.

Speaker #2: And again, that's really because of the unique challenges within London and the Southeast. Equally, Michelmersh, which is the other southern site below the M4 corridor, that site was closed at the start of the year.

Speaker #2: We kept our people on, who did a lot of the work themselves. They know their sites the best. And then we reopened that site in May.

Ryan Mahoney: We reopened that site in May, and it moved towards full capacity in August. Again, that is to facilitate for prefabricated expansion on that site, but also some facility improvements as well to drive the efficiency of the operation there. I think what we would largely say now is those reorganization activities have largely now completed. Our expectation is in the guidance in terms of the H2, in terms of margin improvement, cash improvement, that a lot of the hard work over the last 12 to 18 months we expect to now deliver and start to help the business get back towards a more steady state. Again, we will continue to monitor, we will continue to be agile, and we will continue to flex the business if we need to. The last section here in terms of the discipline around capital allocation.

Speaker #2: And it moved towards full capacity in August. Again, that facilitated some prefabricated expansion on that site, but also some facility improvements as well to drive the efficiency of the operation there.

Speaker #2: And I think what we'd largely say now is those reorganization activities have largely now completed. And our expectation is, in the guidance in terms of the second half—in terms of margin improvement, cash improvement—that a lot of the hard work over the last 12 to 18 months, we expect to now deliver and start to help the business get back towards a more steady state.

Speaker #2: But again, we will continue to monitor, we will continue to be agile, and we will continue to flex the business if we need to.

Speaker #2: And then the last section here, in terms of the discipline around capital allocation—you've seen me talk about normalized capex, and as I say, just repeating that £3 to £4 million is the way to think about the business.

Ryan Mahoney: You have seen me talk about normalized CapEx. As I say, just repeating that GBP 3 million to GBP 4 million is the way to think about the business. That visibility of that net cash position again continues to allow us to take the right decisions through our capital allocation strategy as we see them. Clearly again today, declare an interim dividend, which was in line with last year. We think that is a really important indicator given the state of the broader sector. I will move over the financial highlights and cover those within the income statement. With this, I will try and talk to moments by exception. You have seen me talk about the gross margin improvement there.

Speaker #2: But that visibility of that net cash position again continues to allow us to take the right decisions through our capital allocation strategy as we see them.

Speaker #2: And clearly, again today, we declare an interim dividend, which was in line with last year, and we think that's a really important indicator given the state of the broader sector.

Speaker #2: I'll move over the financial highlights and cover those within the income statement. With this, I'll try and talk to moments by exception.

Speaker #2: You've seen me talk about the gross margin improvement there. But within the central costs, again, you can see that there's been a really clear effort to make sure that we're not growing central costs ahead of anything on the top line, or indeed coming through from the cost of production.

Ryan Mahoney: Within the central costs again, you can see that there has been a really clear effort to make sure that we are not growing central costs ahead of anything on the top line or indeed coming through from cost of production. So very focused on ensuring that whilst top line has dropped 9.5%, you can see that through our own self-help, adjusted EBITDA, showing that pick up at 1.7% and likewise the adjusted basic shares at the bottom there. Again, you can see that really is starting to bear out now in terms of how we are focusing on that earnings progression through the income statement. Just to draw the attention there to the finance costs, in a borrowing position. A lot of that was around the timing of working capital, which I will talk about on the balance sheet.

Speaker #2: So, very focused on ensuring that, whilst top line has dropped 9.5%, you can see that through our own self-help, adjusted EBITDA is showing that pickup at 1.7%, and likewise the adjusted basic shares at the bottom there.

Speaker #2: And again, you can see that that really is starting to bear out now in terms of how we're focusing on that earnings progression through the income statement.

Speaker #2: And then just to draw attention there to the finance costs—being in a borrowing position—and a lot of that was around the timing of working capital, which I'll come and talk about on the balance sheet.

Speaker #2: But again, we're very focused on getting that back, because we don't want that unnecessary leakage through the income statement. So, the balance sheet generally—again, the shape of this stays pretty consistent.

Ryan Mahoney: Again, very focused on getting that back because we do not want that unnecessary leakage through the income statement. The balance sheets generally again, the shape of this stays pretty consistent. Amortization of the intangible fixed assets, you can see there, rhythmically moving down in line with how we assess the intangible assets within the business. Tangible assets there, we fair value our assets every year. We do that in December in line with our full year end process. So that moves with both appreciation of asset bases and indeed where we are capitalizing costs to where we have enhanced our assets. The key there you can see is the net working capital, and I just want to talk about this in a little bit of detail. The really key bit to think about within the net working capital is the inventory position.

Speaker #2: Amortization of the intangible fixed assets—you can see they're rhythmically moving down, in line with how we assess the intangible assets within the business.

Speaker #2: Tangible assets there—we fair value our assets every year. We do that in December, in line with our full year-end process. So that moves with both depreciation of asset bases and, indeed, where we're capitalizing costs to where we've enhanced our assets.

Speaker #2: But the key there, you can see, is the net working capital. And I just want to talk about this in a little bit of detail.

Speaker #2: The really key bit to think about within the net working capital is the inventory position. We have invested in inventory, and really it was a crucial thing for us to do because, number one, over the last two years it allowed us to continue to fulfill customer orders in those sites at Florence, at Carlton, at Blockley's, at Michelmersh.

Ryan Mahoney: We have invested in inventory and really it was a crucial thing for us to do. Because number one, over the last two years, it allowed us to continue to fulfill customer orders in those sites at Floren, at Carlton, at Blockleys, at Michelmersh, where we were doing work and it ensured uninterrupted supply to our customers. A lot of that inventory is now at Freshfield Lane. Again, what this allows us to do is to reduce costs by 30% at that site. We still have capacity to deliver in line with normal cadence, so in line with the best of times at Freshfield Lane.

Speaker #2: Where we were doing work, and it ensured uninterrupted supply to our customers. But a lot of that inventory is now at Freshfield Lane. And again, what this allows us to do is to reduce costs by 30% at that site.

Speaker #2: But we still have capacity to deliver, in line with our normal cadence, so in line with the best of times at Freshfield Lane. What we're able to do here, with a strong balance sheet, is to say, well, look, we've bought ourselves a window of time to monitor the market, over a 12 to 24 month period.

Ryan Mahoney: What we are able to do here with a strong balance sheet is to say, well, look, we have bought ourselves here a window of time to monitor the market over a 12 to 24 month period to allow us to re-recruit those 30 people that we sadly lost in April. Really importantly, with Freshfield Lane, we have maintained a really high core quality of people there. Rather than starting from scratch again, if you mothballed the whole site, you have got the core competencies and core skills on site there so that you are training and embedding rather than starting again. That was a really key consideration why we approached Freshfield Lane differently to looking at the timing of capital improvement works. You can see the net debt moments on the slide there. That is at minus 5. The worst of our revenue window is always December, January, and February.

Speaker #2: To allow us to re-recruit those 30 people that we sadly lost in April. And really importantly, with Freshfield Lane, we've maintained a really high core quality of people there.

Speaker #2: So rather than starting from scratch again, if you've mothballed the whole site, you've got the core competencies and core skills on site there, so that you are training and embedding rather than starting again.

Speaker #2: And that was a really key consideration for why we approached Freshfield Lane, as opposed to just looking at the timing of capital improvement works. You can see the net debt movement on the slide there.

Speaker #2: That's sort of minus five. The worst of our revenue window is always December, January, and February. And again, those collection months therefore then fall in January, February, and March.

Ryan Mahoney: The worst of our revenue window is always December, January, and February.

Ryan Mahoney: Those collection months therefore then fall in January, February, and March. Q1 is always our lowest collection month. There is a little bit of timing in there. Those of you who have had the chance to look at the full balance sheet in the RNS, you can see that in terms of the quantum, the receivables. Very little in there is doubtful. We monitor that incredibly closely, as you would expect us to. Yeah, that is a good number in terms of collections. At the bottom of the page there, you can see NAV per share, and you can obviously see there is a decent valuation there in terms of current share price. We hope that will improve over time. The cash flow, very important statement for us. You can see there again, the timing of working capital cycle there at the top of the page.

Speaker #2: So Q1 is always our lowest collection month, so there's a little bit of timing in there. And those of you who've had the chance to look at the full balance sheet in the RNS, you can see that in terms of the quantum of the receivables.

Speaker #2: Very little in there is doubtful. We monitor that incredibly closely, as you'd expect us to. So, that is a good number in terms of collections.

Speaker #2: So at the bottom of the page there, you can see NAV per share. And you can obviously see that there’s a decent dilution there in terms of current share price.

Speaker #2: And we hope that that will improve over time. Cash flow is a very important statement for us. You can see there, again, the timing of the working capital cycle there at the top of the page.

Speaker #2: But again, normalizing of property, plant, and equipment there: £1.5 million against the £3.8 million. Very front-loaded. A lot of that £3.8 million, again, those of you who joined before will know that we closed Carlton, which was one of our bigger sites, for three months for capital improvement works.

Ryan Mahoney: Again, normalizing of property, plant, and equipment there, 1.5 against the 3.8, very front-loaded. A lot of that 3.8, again, those of you who have joined before will know that we closed Carlton, which was one of our bigger sites for three months for capital improvement works. A few other things on the page there. Proceeds of loan draw down, you can see GBP 4 million borrowed in the H1. As I said, we expect to start paying that number back, so expect that proceeds to start to be offset against repayments as we move through towards the end of December. Dividends on the page there, again, recognizing the importance of that. That is last year's interim declaration coming through on the page. Now, market outlook. This is the bit I know lots of you are interested in.

Speaker #2: A few other things on the page there—proceeds of loan drawdown. You can see £4 million borrowed in the first half. As I said, we expect to start paying that number back.

Speaker #2: So, expect that proceeds start to be offset against repayments as we move through towards the end of December. And dividends are on the page there.

Speaker #2: Again, recognizing the importance of that. That's last year's interim declaration coming through on the page. Now, market outlook. And this is the bit I know lots of you are interested in.

Speaker #2: I think what I would say in terms of the main takeaway from this slide is, if you look at the gray bars that are now resembling Manhattan there on the right-hand side, you can really see the impact of the budget coming through.

Ryan Mahoney: I think what I would say in terms of the main takeaway from this slide is if you look at the gray bars that are now resembling Manhattan down the right-hand side, you can really see the impact of the budget coming through. The budget last year, if you remember, was a longer process. A further month was added to allow the Chancellor and the Prime Minister more time to look at budgeting plans, decision making. But unfortunately, the impact there, as you can see, is by the end of November, by the time that pronouncement came out, really the impact had happened on our sector. But really pleasingly, since then, discipline to match deliveries against production has been much closer, and you can see that illustration there in terms of that steady state, 65 million period and period change.

Speaker #2: The budget last year, if you remember, was a longer process. A further month was added to allow the Chancellor and the Prime Minister more time to look at budgeting plans and decision-making.

Speaker #2: But unfortunately, the impact there, as you can see, is by the end of November—by the time those pronouncements came out—really, the impact had happened on our sector.

Speaker #2: But really, pleasingly, since then, discipline to match deliveries against production has been much closer. And you can see that illustration there, in terms of that steady state 65 million period and period of change.

Speaker #2: But as I said earlier, that does come with the risk of highly competitive average selling prices. Those people who are very focused on cash—of which we, of course, are one—but we are in a slightly better position with regards to our current level of borrowing and gearing.

Ryan Mahoney: But as I said earlier, that does come with the risk of highly competitive average selling prices and those people who are very focused on cash, which we of course are one. But we are in a slightly better position with regards to our current level of borrowing and gearing. We need responsibility in the marketplace to continue. But as I say, at the moment, it is highly competitive on the pricing front. In terms of imports, those of you who are Sun readers or Telegraph readers or Times readers will get different views on imports. My view on imports has not changed. It will represent 20% of the market. It will rise and fall. Some of the headlines around British builders choosing European imports because of brick pricing, I simply don't believe that is true. The bigger part of that story is the need for a level playing field.

Speaker #2: We need responsibility in the marketplace to continue. But as I say, at the moment, it is highly competitive on the pricing front. In terms of imports, those of you who are Sun readers, or Telegraph readers, or Times readers will get different views on imports.

Speaker #2: My view on imports has not changed. It will represent 20% of the market. It will rise and fall. Some of the headlines around British builders choosing European imports are because of brick pricing.

Speaker #2: I simply don't believe that is true. The bigger part of that story is the need for a level playing field—a need for a level playing field in terms of the cost of carbon.

Ryan Mahoney: Need for a level playing field in terms of the cost of carbon, and indeed, utilities. They are the bigger factor. But we can compete on price. This is about the need for a product. If I take you back to 2007, we had 89 brick plants in the United Kingdom. We are now down somewhere in the region of 43 to 44, because of sort of mothballing. UK capacity is about 1.9 billion. That hasn't changed, by the way, since 2022. The more capacity that's been brought on by my peers has often been replacing capacity where indeed other sites have been closed permanently. So that 1.9 billion. Therefore, in that number, European brick imports have replaced some of the products that we can no longer make. So that's the reason why European imports are there, and they are to stay.

Speaker #2: And indeed, utilities there are the bigger factor. But we can compete on price. This is about the need for a product. If I take you back to 2007, we had 89 brick plants in the United Kingdom.

Speaker #2: We are now down somewhere in the region of 43 to 44 because of sort of mothballing. UK capacity is about 1.9 billion. That hasn't changed, by the way, since 2022.

Speaker #2: The increased capacity that's been brought on by my peers has often been replacing capacity, where indeed other sites have been closed permanently. So that £1.9 billion, and therefore within that number, European brick imports have replaced some of the products that we can no longer make.

Speaker #2: So that's the reason why European imports are there, and they're here to stay. And you can see at the bottom—highly illustrative—the Belgians export 60% of their production.

Ryan Mahoney: And you can see at the bottom, highly illustrative, the Belgians export 60% of their production. We know the market well. We've got a plant there. We ourselves do import into the United Kingdom, albeit, we work very hard to maintain a strong local market, which for local for us is Western Germany, Holland, and Belgium itself. But you can see the level of exports from the UK, very negligible. A very small percentage, less than 1% probably of what we do. So very different markets, and again, very important that the government understands the need for that level playing field, albeit, do understand that these products are required to match what has been built before in this country. Just in terms of market structure, again, I've talked through these. Very indicative now because it's so difficult to understand in absolute detail what my peer group are doing.

Speaker #2: We know the market well. We've got a plant there. We ourselves do import into the United Kingdom our beer. We work very hard to maintain a strong local market, which, for us, is West Germany, Holland, and Belgium itself.

Speaker #2: But you can see the level of exports from the UK—very, very negligible. A very small percentage, less than 1% probably, of what we do.

Speaker #2: So, very different markets. And again, it's very important that the government understands the need for that level playing field. Albeit, I do understand that these products are required to match what has been built before in this country.

Speaker #2: Just in terms of market structure—again, I've talked through these. It's very indicative now, because it's so difficult to understand in absolute detail what my peer group are doing.

Speaker #2: But you can hopefully understand the clarity that we tried to wrap around that in the RNS this morning, and indeed, what I'm covering with you today.

Ryan Mahoney: But you can understand, hopefully, the clarity that we tried to wrap around that in the RNS this morning and indeed what I am covering with you today. You can see there, full market numbers at about GBP 0.8 billion. So you can see normalized numbers, again, that sort of illustrative drop back on the prior period coming through. We are once again expecting full year numbers at around that GBP 1.4 to GBP 1.5 billion. So really staying in the foothills of a challenging market. Again, it is about us having grown our market share within those challenging markets, as I say, and we measure that by our own brick dispatch volumes versus the broader market as reported to the government. This slide is a good slide, and I want to cast your mind to the medium term rather than the short term.

Speaker #2: But you can see their full market numbers at about $0.8 billion. So you can see normalized numbers again, that sort of illustrative drop back on the prior period coming through.

Speaker #2: So, once again, expecting full-year numbers at around that £1.4 to £1.5 billion. So really staying in the foothills of a challenging market. But again, it's about us having grown our market share within those challenging markets.

Speaker #2: As I say, we measure that by our own brick dispatch volumes versus the broader market, as reported to the government. This slide is a good slide.

Speaker #2: And I want to cast your mind to the medium term, rather than the short term. We know the short-term challenges, and I'll cover those again in a little bit more detail.

Ryan Mahoney: We know the short term challenges, and I will cover those again in a little bit more detail. In terms of the medium term, there is a critical shortage of new housing. It is critical. You can see the government's efforts to try to unblock the housing market. It is difficult to turn, it is difficult to turn quickly. As I say, the number one issue we face as a country is the confidence of us, it is the confidence of yourselves on the call to make decisions around improving your home, moving home. That is the key moment that we have got to look at, and we have got to try and look at supporting improving that.

Speaker #2: But in terms of the medium term, there is a critical shortage of new housing. It is critical. You can see the government's efforts to try to unblock the housing market.

Speaker #2: But it is difficult to turn. It's difficult to turn quickly. But, as I say, the number one issue we face as a country is the confidence of us.

Speaker #2: It's the confidence in yourselves on the call to make decisions around improving your home or moving home. That is the key moment that we've got to look at, and we've got to try and look at supporting and improving that.

Speaker #2: And that just comes from sentiment and how we all feel in terms of making our own capital commitments against our own balance sheets and how we're feeling about our own longer-term financial security.

Ryan Mahoney: That just comes from sentiment and how we all feel in terms of making our own capital commitments against our own balance sheets and how we are feeling about our own longer term financial security. We know inflation has remained above the Bank of England target, and that has sadly meant that we have not had the sort of the three or four interest rate cuts that I think we can all sort of do business at and around that 3% level. There is good mortgage availability. The banks are being more flexible with regards to interest only. I think that is an important part where people can make their own decisions for the short term, while we expect things to improve if we get steady state stability. Of course, all of this is underpinned by what we believe is UK population expansion.

Speaker #2: We know inflation has remained above the Bank of England target, and that has sadly meant that we haven't had the sort of three or four interest rate cuts that I think we can all sort of do business at, at around that 3% level.

Speaker #2: But there is good mortgage availability. The banks are being more flexible with regards to interest-only. And I think that's an important part, where people can make their own decisions for the short term.

Speaker #2: While we expect things to improve if we get steady-state stability—and, of course, all of this is underpinned by what we believe is UK population expansion—but also, for those of you who joined the call before, you'll know that there is a rise in single dwellers as well.

Ryan Mahoney: Also, for those of you who have joined the call before, you will know that there is a rise in single dwellers as well, which is also consuming the UK housing stocks. The government are committed to a target of 300,000. They keep double downing on that. Of course, we would delight to support them. The number I always talk about is something approaching 200. At something approaching 200, we are all busy. At 220,000, that is what we did in 2022, by the way, that is the 1.95 fully consumed with GBP 550 million coming in from overseas, for which the absolute lion's share is coming from those Benelux countries. Again, anyone who is reading about India or China or Turkey, they are a part of the market, but tiny as things stand. Again, not being complacent.

Speaker #2: Which is also consuming the UK housing stocks. The government are committed to a target of 300,000, and they keep doubling down on that. Of course, we're delighted to support them.

Speaker #2: The number I always talk about is something approaching 200—something approaching 200. We’re all busy. At 220,000—that’s what we did in 2022, by the way.

Speaker #2: That is the 1.95 fully consumed, with £550 million coming in from overseas, for which the absolute lion's share is coming from those sort of Benelux countries.

Speaker #2: So again, anyone who's read anything about India or China or Turkey—they are a part of the market, but tiny as things stand. But again, not being complacent.

Speaker #2: You can see the government are also talking about improving the planning process, reducing barriers, and cutting red tape around planning approvals. We don't know what the detail looks like in terms of mayoral decision-making.

Ryan Mahoney: You can see the government are also talking about improving the planning process, reducing barriers, red tape, planning approvals. We do not know what this detail looks like in terms of mayoral decision-making, funding for council housing as well. You can see that stated commitment to quality social housing as well, rather than just simply being a volume game. I think there is real recognition that how people live, where they live, really makes a difference to the longer term. Then the bottom, the one that is very important for us, as I talked about, we always target that taking a third of our portfolio as the repairs, maintenance, improvements. 180 core bricks, nearly 300, so another 120 of other. That is designed to mirror and make sure that that gap where we closed the 89 down to sort of 44, 45 plants, we can fulfill that legacy.

Speaker #2: Funding for council housing as well. And you can see that state of commitment to quality social housing, rather than simply being a volume game.

Speaker #2: And I think there's real recognition that how people live, where they live, really makes a difference to the longer term. Then at the bottom, the one that's very important for us, as I talked about, we always target taking a third of our portfolio as the repairs for maintenance improvements.

Speaker #2: 180 core bricks, nearly 300. So, another 120 of other that is designed to mirror and make sure that the gap where we close the 89 down for, sort of, 44–45 plants, we can fulfill that legacy.

Speaker #2: So, when you want to build an extension in an area that no longer has a brick plant, we can assist you with a variable range of products.

Ryan Mahoney: When you want to build an extension in an area that no longer has a brick plant, we can assist you by a very broad range of products, and it is a big part of what we do. I think we are winning the battle in terms of brick, in terms of brick is best. You have heard me before talking about brick being best. It is the favorable material of choice for high-rise cladding, remedial work as well, as well as specification projects. The point I really want to get across is, it is the lowest cost for the consumer. I do not just mean that in terms of banks like it, insurers like it. You will like it because you do not have to spend as much on the facade.

Speaker #2: And it's a big part of what we do. I think we are winning the battle in terms of brick—brick is best.

Speaker #2: You've heard me before talking about brick being best. It is the material of choice for high-rise cladding, remedial work, as well as specification projects.

Speaker #2: But the point I really want to get across is it's the lowest cost for the consumer. And I don't just mean that in terms of banks like it or insurers like it.

Speaker #2: You'll like it because you don't have to spend as much on the facade, and anyone that's got a painted property will know that the cost of maintaining that is a steady state of repairs and maintenance.

Ryan Mahoney: Anyone that has got a painted property will know the cost of maintaining that is a steady state of repairs and maintenance. But for us, the brick we see as having that 200-year lifespan, but it looks better pretty much every day from the day it is laid. So, it really is an important part of the market for us, and again, addressing that full space is very important. So, again, trying to be true to my word of giving lots of time for questions, I just wanted to finish on the summary and outlook for us. Again, I hope it is really coming through that the markets are challenging, but our job is to be resilient within it. Our business strategy has and continues to be very tested, but I think we are responding.

Speaker #2: But for us, the brick we see as having that 200-year lifespan, but it looks better pretty much every day from the day it's laid.

Speaker #2: So it really is an important part of the market for us, and again, addressing that full space is very important. So, again, trying to be true to my words of giving lots of time for questions.

Speaker #2: I just wanted to finish with the summary and outlook for us. Again, I hope it's really coming through that the markets are challenging, but our job is to be resilient within it.

Speaker #2: Our business strategy has been, and continues to be, very tested. But I think we're responding. And again, it's our ability to flex our operations, be dynamic, and be agile—which is very much part and core of what we're trying to achieve—alongside being so focused on the elements that are within our gift in terms of cost control, to support that margin improvement.

Ryan Mahoney: Again, it is our ability to flex our operations, be dynamic and be agile, which is very much part and core of what we are trying to achieve, alongside being so focused on the elements that are within our gift in terms of cost control to support that margin improvement. Strong order intake, look, it remains a huge indicator of the demand for our products. Whilst the ability for us to predict the timing of that, and a lot of that is linked to our customers committing to full sites. I will give you a quick example of what that could look like. If you have got 100 houses through planning, for example, ordinarily, you may build those out in three or four phases over a period of 12 months, and there would be a call-off cadence from our brick sites to facilitate the build profile.

Speaker #2: Strong order intake—look, it remains a huge indicator of the demand for our products. And, whilst the ability for us to predict the timing of that—and a lot of that is linked to our customers committing to full sites—I’ll give you a quick example of what that could look like.

Speaker #2: If you've got 100 houses through planning, for example, ordinarily you may build those out in three or four phases over a period of 12 months.

Speaker #2: And there’d be a call-off cadence from our brick sites to facilitate the build profile. What we’re seeing at the moment is some of the uncertainty within the consumer space is meaning that the developers are tending to build only the show homes, rather than a deeper part of that particular site.

Ryan Mahoney: What we are seeing at the moment is some of the uncertainty within the consumer space is meaning that the developer is intending to build only the show homes rather than a deeper part of that particular site. That is what we are seeing. When we talk about unpredictability of call-offs from our brick sites, really that is what we are making. In terms of the longer term or even the medium term, we know that our product is being specified for planning. Our customers are committing to that process, and that is a really important indicator for us in terms of the longer term for our business model.

Speaker #2: So that's what we're seeing. So when we talk about unpredictability of call-offs from our brick sites, really that's what we're making. But in terms of the longer term, or even the medium term, we know that our product is being specified for planning.

Speaker #2: Our customers are committing to that process, and that's a really important indicator for us in terms of the longer term for our business model.

Speaker #2: We have seen improvement momentum in Belgium, which is important. And we are trying to build out the commercial team, and have built out the commercial team, as we look to grow our market share in some of those other peripheral markets, of which the Netherlands we believe is a big one in that very brick-centric space.

Ryan Mahoney: We have seen improving momentum in Belgium, which is important. We are trying to build out the commercial team and have built out the commercial team as we look to grow our market share in some of those other peripheral markets, of which the Netherlands, we believe, is a big one in that very brick-centric space. As I said, in terms of the strength of the balance sheet, look, I believe as strong as of 30 June, on a 12-month basis as a net debt to adjusted EBITDA, we are at 0.4 times. On anyone's metric, that is low gearing, but I want it to be back towards that net cash position, because very much that is what we have said is our capital allocation priority.

Speaker #2: And as I said, in terms of the strength of the balance sheet—look, I believe it's as strong as at 30th of June. On a 12-month basis, our net debt to adjusted EBITDA is at 0.4 times, so on anyone's metric, that is low gearing.

Speaker #2: But I want it to be back towards that net cash position, because very much that's what we've said is our capital allocation priority. And you can see in the statement—again, repeating that fact because I think it's important.

Ryan Mahoney: You can see in the statement, again, repeating that fact. I think it is important it really does land, really targeting getting back to net cash for next year. We have tried to add, and we have added, the consensus trading bandwidth, which you can see on the bottom of the page there. Again, we know that you do not all have access to research materials, so we hope that has been well received in the marketplace, that when we say we are trading within that range for full year, that is the range to assess us by. Look, the caveat there at the bottom of the page clearly is you are all intelligent, you all follow the markets. There are a plethora of macroeconomic uncertainties that we are facing, and they change daily.

Speaker #2: It really does land. We're really targeting getting back to net cash for next year. We've tried to add, and we have added, sort of the consensus trading bandwidth, which you can see at the bottom of the page there.

Speaker #2: And again, we know that not all of you have access to research materials. So, we hope that's been well received in the marketplace—that when we say we are trading within that range for the full year, that is the range to assess us by.

Speaker #2: And look, the caveat there at the bottom of the page is clear. You're all intelligent, you all follow the markets. There are a plethora of macroeconomic uncertainties that we are facing.

Speaker #2: And they change daily. So, whilst we're sitting here today saying that, please do recognize there is risk within that second half. But as I say, we are doing what we can to mitigate that and control the controllables within our business.

Ryan Mahoney: Whilst we are sitting there today saying that, please do recognize there is risk within that second half. As I say, we are doing all we can to mitigate that and control the controllables within our business. That, of course, precludes us to say that we are really looking at those stronger H2 margins and that earnings and cash generation being very key to that. Look, I think it is clear that UK demand is difficult to predict. There are lots of catalysts that we could talk about, and I am sure you will ask questions on. I do not have a clear moment in time when they could come to pass. Lots of these factors take time to improve. I suppose the one I would absolutely talk to as a near term is stability of policy.

Speaker #2: And that, of course, precludes us from saying that we are really looking at those stronger H2 margins, and that earnings and cash generation are very key to that.

Speaker #2: And look, I think it's clear that UK demand is difficult to predict. There are lots of catalysts that we could talk about, and I'm sure your last question's on.

Speaker #2: I don't have a clear moment in time when they could come to pass. Lots of these factors take time to improve. I suppose the one I would absolutely talk to as a near-term is stability of policy.

Speaker #2: That, I think, could be the moment that starts to help all of us make decisions for the medium term, because we understand what the government approach is going to be.

Ryan Mahoney: That I think could be the moment that just starts to help all of us make decisions for the medium term because we understand what the government approach is going to be rather than changes through the budget or an interim budget, indeed. That would be our ask of the government. What I would finish on before I open this up to questions is, we have done an awful lot within this business to position it not for improving markets, but for current markets. I do think we are well placed for those recovery markets. But equally, I have to say to you, I believe we are well placed as well to continue to trade through what are difficult trading conditions. But we have got the right portfolio, I believe, and the right strategy to continue to do that as we all wait for better times.

Speaker #2: Rather than changes through the budgets or an interim budget, indeed, and that would be our ask of the government. But what I would finish on, before I open this up to questions, is that we have done an awful lot within this business to position it, not for improving markets, but for current markets.

Speaker #2: And I do think we are well placed for those recovering markets. But equally, I have to say to you, I believe we're well placed as well to continue to trade through what are difficult trading conditions. But we've got the right portfolio, I believe, and the right strategy to continue to do that as we all wait for better times.

Speaker #2: And with that, I'll pause for questions, if I may.

Ryan Mahoney: With that, I will pause for questions, if I may.

Speaker #1: Thank you. We've had a number of questions pre-submitted and submitted live. Just as a reminder, if you'd like to ask a question, please type it into the Q&A box situated on the right-hand side of your screen.

Operator: Thank you. We have had a number of questions pre-submitted and submitted live. Just as a reminder, if you would like to ask a question, please type them into the Q&A box situated on the right-hand side of your screen. The first question reads: The housing market has been pretty tough. You seem to have held up better than the overall market. Are you actually winning market share from competitors?

Speaker #1: The first question reads: The housing market has been pretty tough. You seem to have held up better than the overall market. Are you actually winning market share from competitors?

Speaker #2: Yes, I mean, if you follow the other UK-listed brick manufacturers, I think everyone's won market share. But look, I think there are many ways of cutting this.

Ryan Mahoney: Yes. If you follow the other UK listed brick manufacturers, I think everyone has won market share. But look, I think there are many ways of cutting this. The way I simply look at it is, what have we dispatched from our portfolio? Not about assets that are mothballed or anything else. What have we dispatched from our current portfolio? On that basis, we have absolutely won market share. But the most important part is we continue to hold it because, as I said earlier, the challenge we are facing is, if sites are going to be mothballed because they are full, there is lots and lots of examples of aggressive pricing that is out there, because if businesses are going to start to run for cash, they will start to drive those prices down, and that is the bit I really do watch for.

Speaker #2: The way I simply look at it is, what have we dispatched from our portfolio? Not about assets that are more volatile or anything else.

Speaker #2: What have we dispatched from our current portfolio? On that basis, we have absolutely won market share. But the most important part is we continue to hold it because, as I said earlier, the challenge we are facing is if sites are going to be multiple because they're full, that there are lots and lots of examples of aggressive pricing that's out there.

Speaker #2: Because if businesses are going to start to run for cash, they'll start to drive those prices down, and that's the bit I really do watch for.

Speaker #2: So, my job is to try to hold the discipline of average selling pricing, while holding on to our core customers. But look, I think the fact I haven't tried to put prices up—I haven't tried to yo-yo with my customer base.

Ryan Mahoney: My job is to try to hold discipline of average selling pricing whilst holding on to our core customers. I think the fact I haven't tried to put prices up, I haven't tried to yo-yo with my customer base. We've tried to be really clear and concise on our message to them. You'll see the word collaboration isn't in this announcement, actually, but we remain so collaborative with our distribution partners, and I do believe that their long-term relationship, but also the manner in which we carry ourselves and conduct ourselves with them, that matters hugely to really protecting our market share. It can't be just about price because we're at the premium end.

Speaker #2: We've tried to be really clear and concise in our message to them. You'll see the word 'collaboration' isn't in this announcement, actually. But we remain so collaborative with our distribution partners.

Speaker #2: And I do believe that there are long-term relationships, but also the manner in which we carry ourselves and conduct ourselves with them—that matters hugely to really protecting our market share.

Speaker #2: It can't be just about price because we're at the premium end.

Speaker #1: Thank you. Do you think the government is doing enough to support UK brick manufacturers, particularly given the much higher energy costs here compared with Europe?

Operator: Thank you. Do you think the government is doing enough to support UK brick manufacturers, particularly given the much higher energy costs here compared with Europe?

Speaker #2: Yeah, it's a good question. I think, look, it would be really easy for me to disparage the government. This is a very long-standing challenge within utilities that is a global issue.

Ryan Mahoney: Yeah, it's a good question. I think, look, it would be really easy for me to just bash the government. This is a very long-standing challenge within utilities that is a global issue. There are elements within our own pricing construct that absolutely are related to how the government approach things. Chief amongst them, of course, is that the improvements of the networks and everything else is priced in through energy pricing as opposed to through general taxation. That is swings and roundabouts. Whilst utilities are higher, there'll be other ways and means with which the continent does challenge as well. I say again, the point that I really want to really emphasize is we've asked for a level playing field.

Speaker #2: There are elements within our own pricing construct that absolutely are related to how the government approaches things. Chief among them, of course, is that the improvements in the networks and everything else are priced in through energy pricing as opposed to through general taxation.

Speaker #2: But that is swings and roundabouts. So whilst utilities are higher, there will be other ways and means with which the continent does challenge as well.

Speaker #2: I say again, the point that I really want to make, and really emphasize, is we've asked for a level playing field. So, if there are elements within utilities or carbon pricing, or indeed people and other costs that are coming through with employment rate changes, be fair to us with regards to how those imports are assessed.

Ryan Mahoney: If there are elements within utilities or carbon pricing, or indeed people and other costs that are coming through with employment right changes, be fair to us with regards to how those imports are assessed, because that's the bit that I think we would need the government to support us on, because we're there to help them with taxation. We're there to help them make sure that we can manufacture the product. So help us with a level playing field with regards to our cost base. I think, again, in terms of what they could do, I do come back to that point around stability. You could see that there are other things that we could ask for, Help to Buy, stamp duty reform, all of those would be hugely helpful.

Speaker #2: Because that's the bit that I think we would need the government to support on. We're there to help them with taxation, and we're there to help make sure that we can manufacture the product.

Speaker #2: So help us with a level playing field with regards to our cost base. I think, again, in terms of what they could do, I do come back to that point around stability.

Speaker #2: You can see that there are other things that we could ask for help to buy—stamp duty reform, for example—and all of those would be hugely helpful.

Speaker #2: But as I say, I think we've got to be able to say to them, "Give us stability." If their hands are tied in other ways politically, that's the bit that could really support the industry.

Ryan Mahoney: But as I say, I think we have got to be able to say to them, "Give us stability." If their hands are tied in other ways politically, that is the bit that could really support the industry. But do keep an absolute laser focus on that level playing field.

Speaker #2: But do keep an absolute laser focus on that level playing field.

Speaker #1: Thank you. The next question reads: There seems to be a bit of a contradiction between the government wanting to build 1.5 million homes and the UK brick industry cutting production.

Operator: Thank you. The next question reads: There seems to be a bit of contradiction between the government wanting to build 1.5 million homes and the UK brick industry cutting production. Is there a risk we end up relying heavily on imported bricks when house building eventually takes off?

Speaker #1: Is there a risk we end up relying heavily on imported bricks when housebuilding eventually takes off?

Ryan Mahoney: Yeah. It is a good question. Look, I will answer that with absolute fact. I think if you go back to 2007, we did not import products in any grand volume. As I said to you, because of the fact that we have gone from 89 brick sites down to 45, 46 now today, that is an indication that we have opened the door to European imports because of the need, because we took away the actual manufacturing capability for products that are needed to match the local vernacular in whatever town, city or village people are looking to make improvements or indeed put down new housing. So I hope that answers what could come next. It is a long, long trough. Further sites have been closed over the last 24 months and more may.

Speaker #2: Yeah, it's a good question. And look, I'll answer that with absolute fact. I think if you go back to 2007, we did not import products in any significant volume.

Speaker #2: So, as I said to you, because of the fact that we have gone from 89 brick sites down to 45, 46 now, today, that is an indication that we have opened the door to European imports because of the need.

Speaker #2: Because we took away the actual manufacturing capability for products that are needed to match the local vernacular in whatever town, city, or village people are looking to make improvements, or indeed put down new housing.

Speaker #2: So, I hope that answers what could come next. It's a long, long trough, and further sites have been closed over the last 24 months.

Speaker #2: And more may. So I think the inevitability is that imports may continue to support UK house building. And as I say, it is an important part of the model, and you can see that in the Belgian statistics.

Ryan Mahoney: I think the inevitability is that imports may continue to support UK house building, and as I say, it is an important part of the model, and you can see that on the Belgian statistics. 60% of manufactured Belgian bricks are exported from their domestic markets. The other thing just to say about a lot of those European distributors, a lot of them are family-owned, so they can take different decisions than, or the lion's share, about 98% of capacity in the UK is either domestically listed or listed via Wienerberger in Austria. So, it is important that everyone does think about that. But yes, I do believe there is a risk that imports would grow if the markets do not improve in the United Kingdom.

Speaker #2: Sixty percent of manufactured Belgian bricks are exported from their domestic markets. The other thing to mention about a lot of those European distributors is that many of them are family owned.

Speaker #2: So they could take different decisions than all. The lion's share, about 98% of capacity in the UK, is either domestically listed or listed via Wienerberger in Austria.

Speaker #2: So, it is important that everyone does think about that. But yes, I do believe there is a risk that imports would grow if the markets don't improve in the United Kingdom.

Speaker #1: Thank you. The next question reads: With competitors cutting production and even more falling capacity, does that eventually create a better pricing environment for Michelmersh?

Operator: Thank you. The next question reads: With competitors cutting production and even mothballing capacity, does that eventually create a better pricing environment for Michelmersh? For Forterra, for example, has significantly reduced production in response to weak demand.

Speaker #1: Forterra, for example, has significantly reduced production in response to weak demand.

Speaker #2: Yeah, I think the absolute keyword in that question is the word "eventually." Yes, I'll answer that, really, in the shortest of answers: yes, eventually.

Ryan Mahoney: Yeah, I think the absolute key word in that question is the word eventually. Yes, I will answer that really in the shortest of answers. Yes, eventually it would help in terms of, you have essentially got more demand for a diminished pool of UK manufactured products. I want the whole industry to be busy, let me be clear. If we are all busy, as I say, if we are looking to get towards 200,000 houses, 180,000, 190,000, we are all busy again, I can assure you, and that keeps us all going. We stay out of each other's markets on that basis, and we actually do not overlap hugely because we have all got quite particular amounts in which we sell in the markets we sell into. But it is a key point is the word eventually.

Speaker #2: It would help in terms of you've essentially got less demand sorry, more demand for a diminished pool of UK manufactured products. I want the whole industry to be busy.

Speaker #2: Let me be clear. If we're all busy, as I say, if we're looking to get towards 200,000 houses—180,000, 190,000—we are all busy again.

Speaker #2: I can assure you, and that keeps us all going. We stay out of each other's markets on that basis, and we actually don't overlap hugely, because we've all got quite particular amounts in which we sell in the markets.

Speaker #2: We sell into, but a key point is the word "eventually." Near term, as I said, it creates an awful lot of undulation in the average selling price because commercial teams become more unleashed in terms of how they approach their efforts to win market share.

Ryan Mahoney: Near term, as I said, it creates an awful lot of undulation in the average selling pricing because commercial teams become more unleashed in terms of how they approach their efforts to win market share.

Speaker #1: Thank you. The next question reads: Your bricks tend to command a premium price. Are customers still willing to pay that premium when the market is under pressure, or are you seeing more switching to cheaper alternatives?

Operator: Thank you. The next question reads: Your bricks tend to command a premium price. Are customers still willing to pay that premium when the market is under pressure, or are you seeing more switching to cheaper alternatives?

Speaker #2: Yeah, in all honesty, yeah, the latter, absolutely. I'm sure that happens. But please do look at the statistics that I've quoted today. The market is down 25% period-on-period, down 9%.

Ryan Mahoney: Yeah, in all honesty, the latter, absolutely. I am sure that happens, but please do look at the statistics that I have quoted today. The market is down 25%, period on period, down 9%. We ourselves, down 2%. That is, for me, an important indicator that, as I say, the depth of our customer relationships, the quality of our product and service, please do always and service, that premium. It is not just about price, it is about how we look after our customers, how we look after delivery profiles, how we help them if they have got to change their own onsite cadence in terms of deliveries. All of that is wrapped up underneath that premium product and service. So, that is an important part.

Speaker #2: We ourselves are down 2%. Now, that is, for me, an important indicator that—as I say—the depth of our customer relationships, the quality of our product, and service—please do always, and service that premium.

Speaker #2: It's not just about price. It's about how we look after our customers, how we manage delivery profiles, and how we help them if they need to change their own on-site cadence in terms of deliveries.

Speaker #2: All of that is wrapped up underneath that premium product and service, so that is an important part. So, I would say, because of the depth—depth of the quality of our portfolio, and because of the market, we continue to be resilient in what are challenging market conditions.

Ryan Mahoney: Because of the depth of the quality of our relationships, because of the depth of the quality of our portfolio, because we try to address the full market, we continue to be resilient in what are challenging market conditions.

Speaker #1: Thank you. The next question says, there have been a number of acquisitions over the years. Are there still attractive businesses out there that you'd like to buy?

Operator: Thank you. The next question says: There have been a number of acquisitions over the years. Are there still attractive businesses out there that you would like to buy?

Speaker #2: Bold. I like that question. Yeah, so absolutely, last acquisition November 2022. I think it probably will go down as the worst moment to buy.

Ryan Mahoney: Bold, I like that question. Yeah, absolutely. Last acquisition, November 2022. I think it probably will go down as the worst moment to buy another business because that was the high point probably in terms of housing activities, particularly the new build space of which that prefabricated asset was really squarely aimed at. Of course, there are good assets out there. Absolutely, there are. But please do look at where the market is at the moment. The ability to chart an improving market, even if you take the construction activity at brick dispatch levels, it is so difficult. I will go back to one of my points I said earlier, the five false dawns, where we thought we had momentum only for it to be pulled away again. So yes, there are, of course, assets, but it is a difficult moment for us.

Speaker #2: Another business, because that was the high point, probably in terms of housing activities—particularly the new build space, of which that prefabricated asset was really squarely aimed at.

Speaker #2: Of course, there are good assets out there. Absolutely, there are. But please do look at where the market is at the moment. The ability to chart an improving market—even if you take the construction activity at brick dispatch levels—is so difficult.

Speaker #2: And I'll go back to one of my points I mentioned earlier—the five false dawns where we thought we had momentum, only for it to be pulled away again.

Speaker #2: So, yes, there are core assets, but it's a difficult moment for us. As you can see, I'm really focused on delivering against the capital allocation priorities.

Ryan Mahoney: As you can see, I am really focused on delivering against the capital allocation priorities, really trying to reward shareholders with a steady and consistent dividend. I think they are the moments for us to assess our capital allocation priorities, rather than doing something more ambitious in the acquisition space as things stand.

Speaker #2: We're really focused on rewarding shareholders with a steady and consistent dividend. I think these are the moments for us to assess our capital allocation priorities, rather than doing something more ambitious in the acquisition space as things stand.

Speaker #1: Thank you. The next question reads: What is the latest news or timeline on the Charnwood/Ashby Road site? Can you give any indication of the potential future value of the site?

Operator: Thank you. The next question reads: What is the latest news/timeline on the Charnwood/Ashby Road site? Can you give any indication of potential future value in the site?

Speaker #2: No, it's a good question. And, look, I think there is absolutely a commercial sensitivity to that valuation. As we said—and again, just reiterating—there are two parcels there.

Ryan Mahoney: No, it is a good question. Look, I think there is absolutely a commercial sensitivity to that valuation. We said, and again, just reiterating, there are two parcels there. The old quarry, which hasn't seen action since 2023 when brick manufacturing ceased on-site, and then the actual land and buildings, which have been used for cast and terracotta clay production up until the end of last year. Then also in terms of the prefabricated portfolio. So two parcels of land. One is about 4 acres, the other is about 20 acres. The point around value is, I cannot give you an indication because that will compromise us commercially, but what I can say is it absolutely is under review. We very much wouldn't have talked about it so openly if we didn't see that as part of the non-core part of the portfolio.

Speaker #2: The old quarry, which hasn't seen action since 2023 when brick manufacturing ceased on site, and then the actual land of buildings, which have been used for Hafen Terracotta clay production up until the end of last year.

Speaker #2: And then also in terms of the prefabricated portfolio. So two parcels of land—one's about 4 acres, the other's about 20 acres. The point around value is I can't give you an indication because that will compromise us commercially.

Speaker #2: But what I can say is it absolutely is under review. And we very much—we wouldn't have talked about it so openly if we didn't see that as part of a non-core part of the portfolio.

Speaker #2: And going back to one of those four pillars I talked about, we will look to convert that into cash in due course, with indicative timings.

Ryan Mahoney: Going back to one of those four pillars I talked about, we will look to convert that into cash in due course. Indicative timings, I cannot do any better than we expect something in the short to medium term.

Speaker #2: I can't do any better than we expect something in the short to medium term.

Speaker #1: Thank you. Do you expect revenue growth to return in the second half, or is the market still too uncertain?

Operator: Thank you. Do you expect revenue growth to return in H2, or is the market still too uncertain?

Speaker #2: That's a good question. I think, hopefully, I'll go back to what I said earlier. We aren't expecting a change. It is important to note that that sort of December, January, February time tends to be quiet anyway.

Ryan Mahoney: It's a good question. I think hopefully I'll go back to what I said earlier, we aren't expecting change. It is important to know that that December, January, February time tends to be quiet anyway. It is also important to highlight that Q4 has been unbelievably difficult to predict for the last three years in a row. I'm focused on self-help. Again, you can see we've done a lot of activity in H1 for self-help, and we expect some of those benefits to come through in H2, and you can still see the bullet there on the page. We're focused on what we can do ourselves rather than expecting catalysts from the broader market to drive those improvements, because I think they're going to take a little while to come through, despite everybody's best endeavors.

Speaker #2: But it is also important to highlight that Q4 has been unbelievably difficult to predict for the last three years in a row. So, I'm focused on self-help, and again, you can see we've done a lot of activity in the first half for self-help.

Speaker #2: And we expect some of those benefits to come through in H2. You can still see the bullet there on the page. So we're focused on what we can do ourselves, rather than expecting catalysts from the broader market to drive those improvements, because I think they're going to take a little while to come through despite everybody's best endeavors.

Speaker #1: Thank you. The next question is: What is the biggest risk to hitting your full-year expectations?

Operator: Thank you. The next question is, what is the biggest risk hitting your full year expectations?

Speaker #2: Macro factors—the elements that are sitting outside us. And again, I'm sorry to keep repeating this point, but it comes down to the consumer. If the consumer pivots to become more cautious again, even more cautious, we see that very, very quickly with regards to the cadence of call-offs from our sites, in terms of how many bricks are leaving our factory gates.

Ryan Mahoney: Macro factors. The elements that are sitting outside us, and again, I'm sorry to keep repeating this point, it comes down to the consumer. If the consumer pivots to become more cautious again, even more cautious, we see that very quickly with regards to the cadence of call-offs from our sites in terms of how many bricks are leaving our factory gates. That can be impacted by those macro factors. They could be domestically around the budget. There are rumors around elections being called, and you all will have views on those. There are clearly also some major geopoliticals as well with regards to Ukraine, the Middle East. Of course, there's scope for any one of those two things to drive other flashpoints. It's really those elements that are outside of our control.

Speaker #2: And that can be impacted by those macro factors. I mean, they could be domestic, around the budget. There are rumors about elections being called.

Speaker #2: And you'll all have views on those, but there are clearly also some major geopolitical issues as well with regards to Ukraine, the Middle East. And, of course, there's scope for any one of those two things to drive other flashpoints.

Speaker #2: So, it's really those elements that are outside of our control. That's the bit I really do focus on, in terms of—that's the bit that makes predicting the forward demand for our portfolio so very difficult.

Ryan Mahoney: That is the bit I really do focus on in terms of, that is the bit that makes predicting the forward demand for our portfolio so very difficult. That is the bit that really keeps me up.

Speaker #2: So that's the bit that really keeps me up.

Speaker #1: Thank you. The next question reads, gross margin increased by 340 basis points and EBITDA margin by 200 basis points. Despite lower revenue and reduced production.

Operator: Thank you. The next question reads: gross margin increased by 340 basis points and EBITDA margin by 200 basis points, despite lower revenue and reduced production. How much of that improvement came from permanent cost savings and efficiency gains, and how much from product mix, inventory movements, or temporary factors?

Speaker #1: How much of that improvement came from permanent cost savings and efficiency gains, and how much from product mix, inventory movements, or temporary factors?

Speaker #2: Yeah, it's a very good question. And look, I think some of it was from the year before. So, I'm afraid I've sadly had to thank an awful lot of people for their contribution to my business over the last 12 to 18 months.

Ryan Mahoney: Yeah. It is a very good question, and look, I think some of it was from the year before. I am afraid, I have sadly had to thank an awful lot of people for their contribution to my business over the last 12, 18 months. Some of that is permanent. Again, I think before I go on, let me just emphasize the point again. We can get that capacity back, in terms of that is prefabrication and that is brick manufacturing volumes as well. It is not a permanent exit at all by any stretch of the imagination. Freshfield Lane is absolutely, I was going to say permanent, but it is a near-term delivery of cost because Freshfield Lane as a site is about the cadence of manufacture. It is not like a long tunnel kiln, which you are either switching on or switching off.

Speaker #2: So, some of that is permanent. But again, I think, before I go on, let me just emphasize the point again—we can get that capacity back in terms of prefabrication.

Speaker #2: And that's brick manufacturing volumes as well. So it's not a permanent exit at all by any stretch of the imagination. Freshwood Lane is, absolutely—I was going to say permanent, but it's a near-term one.

Speaker #2: Delivery of costs at Freshwood Lane is about the cadence of manufacture. It's not like a long tunnel kiln, which you're either switching on or you're switching off.

Speaker #2: It's people. It's a handmade process. So you can speed up or slow down that side. So, and again, those 30 people that left us are absolute costs.

Ryan Mahoney: It is people, it is a handmade process, so you can speed up or slow down that site. Again, those 30 people that left us are absolute costs. Likewise, there could be reductions in raw materials, reduction in utilities at those sites. Likewise, for sites that we close, which are leasehold sites, costs at Charnwood as well. As I said at the very start, that other tranche that is in dispatches, ASP, and product mix was us exiting low margin business within the prefabrication space. Again, I see a lot of this as being quite permanent. As I say again, the revenue performance that we have done within these markets, we still need that to stay there, because whilst we can do as much as we can to pull levers on costs, we still need to make sure we are holding that revenue performance.

Speaker #2: Likewise, the reductions in raw materials, reduction in utilities at those sites. Likewise, the sites that we've closed, which are leasehold sites, costs of Charnwood as well.

Speaker #2: And also, as I said at the very start, the tranche that isn't dispatches ASP and product mix was us exiting low-margin business within the prefabrication space.

Speaker #2: And so again, I see a lot of this as being quite permanent. But, and I say again, the revenue performance that we've achieved within these markets—we still need that to stay there. Because whilst we can do as much as we can to pull levers on costs, we still need to make sure we're holding that revenue performance.

Speaker #2: But we're very pleased with progress, and we've got more to do. We expect to get more done in the second half.

Ryan Mahoney: But we are very pleased with progress, and we have got more to do, and we expect to get more done in the H2.

Speaker #1: Thank you. Are you seeing any real signs of confidence returning from housebuilders?

Operator: Thank you. Are you seeing any real signs of confidence returning from house builders?

Speaker #2: Not really, I'm afraid. I think that's just me in terms of conversations with them. That's the narrative we get through our commercial market intelligence.

Ryan Mahoney: Not really, I am afraid. I think that is just me in terms of conversations with them. That is the narrative we get through our commercial market intelligence. That is also what you can read within their own market reports. You can see there is an awful lot of caution around land banks. There is an awful lot of caution around cash protection. There are brighter pockets. I think Persimmon have been more upbeat, in terms of a more clear commitment to improving the volumes within their own spaces. So it is not all doom and gloom at all. But as I say, I think within the London and the South East particularly, which, given they are key markets for us, they are key markets for lots of people, but key markets for us, there is a lot of caution. And again, we watch those markets very closely.

Speaker #2: That is also what you can read within their own market reports. You can see there's an awful lot of caution around land banks. There's an awful lot of caution around cash protection.

Speaker #2: There are brighter pockets. I think, for similar, have been more upbeat in terms of a more clear commitment to improving the volumes within their own spaces.

Speaker #2: So it's not all doom and gloom at all. But as I say, I think within London and the Southeast particularly—given they're key markets for us, and they're key markets for lots of people, but key markets for us.

Speaker #2: There's a lot of caution, and again, we watch those markets very, very closely. As I say, though, the key is we know there's appetite for our portfolio.

Ryan Mahoney: As I say, the key is we know there is appetite for our portfolio, and that is the bit that really gives me heart, that we are not losing our customers. Their caution is impacting them. But again, they are very prepared to take us through planning because they want the product that we are selling, and that is an important indicator that underpins the resilience of that model. But of course, we watch all of them very closely. But I think they are cautious in terms of the consumer sentiment the same way as we are.

Speaker #2: And that's the bit that really gives me heart—that we're not losing our customers. Their caution is impacting them, but again, they're very prepared to take us through planning because they want the product that we are selling.

Speaker #2: And that's an important indicator that underpins the resilience of that model. But we, of course, watch all of them very closely. But I think they are cautious in terms of consumer sentiment in the same way as we are.

Speaker #1: Thank you. The next question says: when you backfill a spent pit, generally, do you plan to sell it on as a land bank or hold to maturity and development potential?

Operator: Thank you. The next question says, when you backfill a spent pit, generally do you plan to sell on as a land bank or hold to maturity and development potential?

Speaker #2: So sorry, Josh. Do you mind just saying that first bit of the question again? I'm sorry, I didn't quite hear that first bit.

Ryan Mahoney: Sorry, Josh, do you mind just saying that first bit of the question again? I am sorry, I did not quite hear that first bit.

Speaker #1: When you backfill a spent pit, generally do you plan to sell it on as land bank, or hold it to maturity and development potential?

Operator: When you backfill a spent pit, generally do you plan to sell on as land bank or hold to maturity and development potential?

Speaker #2: Yeah, that's a good question. Generally, the former. So, we would generally lean into the expertise of others in terms of how they develop those sites.

Ryan Mahoney: Yeah, that is a good question. Generally, the former, so we would generally lean into the expertise of others in terms of how they develop those sites. You can see, I am sure lots of you really monitor very closely the timings for development. The gestation period on them can be enormous. So often what we have tried to do in the past is make sure that there is planning consent or the sites have been adopted within local planning plans for the councils, and that is a good point for us to realize value. So it tends to historically lean towards the former. But I would say never say never. The whole point of being flexible and agile is you are always asking yourself the question. So we would also always ask ourselves the question, what is the right approach for that individual site? And they are very different.

Speaker #2: You can see, I’m sure, lots of you really monitor very closely the timings of development. The gestation period on them can be enormous. So, often what we try to do in the past is make sure that there is planning consent, or surplus sites have been adopted within local planning plans for the councils.

Speaker #2: And that's a good point for us to realize value. So, it has tended historically to lean towards the former, but I'd say never say never.

Speaker #2: The whole point of being flexible and agile is you're always asking yourself the question. So we would also always ask ourselves the question: what's the right approach for that individual site?

Speaker #2: And there are very different— all the councils, all the sites where we're operating have got different opportunities based on the environment which we are surrounded by.

Ryan Mahoney: All the councils, all the sites for where we are operating have got different opportunities based on the environment in which we are surrounded. Some are within industrial spaces, some are within housing developments already because lots of towns and villages have their own brick sites, some are in the villages. It is not a hard and fast rule, but generally speaking, if you want a clear answer, it is the former that we have tended to do in the past.

Speaker #2: Some are within industrial spaces. Some are within housing developments already, because lots of towns and villages have their own brick sites. Some were in the villages.

Speaker #2: So, it's not a hard and fast rule, but generally speaking, if you want a clearer answer, it is the former that we tended to do in the past.

Speaker #1: Thank you. We're now moving on to our final question for today. If you have any further questions, please email the team, who will respond to any questions that weren't covered this afternoon.

Operator: Thank you. We are now moving on to our final question for today. If you have any further questions, please email the team who will respond to any questions that were not covered this afternoon. The final question reads: You have talked about being more efficient and improving margins. When do we, as shareholders, actually start seeing the benefit of that in earnings and cash generation?

Speaker #1: Final question reads: You've talked about being more efficient and improving margins. When do we, as shareholders, actually start seeing the benefit of that in earnings and cash generation?

Speaker #2: Yeah, it's a good question. I mean, I hope as shareholders you can see that what we try to do is return value as and when we can, and consistently.

Ryan Mahoney: Yeah, it is a good question. I hope for shareholders, you can see that what we try to do is return value as and when we can and consistently. The dividend has grown up until 2024 and has stayed steady in 2025 and 2026. And you can see with the interim declaration of 1.6, that is in line with last year, but better than any other interim declaration we have had aside from the singular 2.5p in 2019, which was a slight COVID-interrupted year. That is a long history since we paid our first dividend. I would certainly answer that by saying I believe we have been consistent returning value to shareholders, and indeed have operated two buyback programs within that period as well in 2022 and then in 2024.

Speaker #2: The dividend has grown up until 2024 and has stayed steady in 2025 and 2026. And you can see with the interim declaration of 1.6, that is in line with last year.

Speaker #2: But better than any other interim declaration we've had, aside from the singular £2.5p in 2019, which was a slightly COVID-interrupted year.

Speaker #2: Now, that is a long history—since we paid our first dividend. So, I would certainly answer that by saying I believe we've been consistent in returning value to shareholders.

Speaker #2: And indeed, we have operated two buyback programs within that period as well—in 2022 and then in 2024. So my job, as I see it, in what is now the worst trough for UK construction activity, by the sheer length of time that this has been going on, is to continue to flex and adapt the business such that you, as shareholders, do continue to see those returns.

Ryan Mahoney: My job as I see it, is in what is now the worst trough for UK construction activity by the sheer length of time that this has been going on, is to continue to flex and adapt the business such that you as shareholders do continue to see those returns. And I really hope it is clear in terms of the capital allocation strategy so that you can make any decisions to buy further shares, which we hope is the one that you move towards. Constantly trimming or raising dividends, in my view, is something that we have really tried to avoid. And again, I hope you can see from our track record that to date we have been successful with that. I hope you continue to support us.

Speaker #2: And I really hope it's clear in terms of the capital allocation strategy, so that you can make any decisions to buy further shares—which we hope is the one that you move towards.

Speaker #2: And constantly trimming or raising dividends, in my view, is something that we've really tried to avoid. And again, I hope you can see from our track record that, to date, we've been successful with that.

Speaker #2: So, I hope you continue to support us. I hope you can continue to see that we're doing all we can within that self-help space to drive and improve those margins back toward that 20% EBITDA margin, and as a result, we'll continue to try to deliver against the capital allocation strategy.

Ryan Mahoney: I hope you can continue to see that we are doing all we can within that self-help space to drive and improve those margins back towards that 20% EBITDA margin. As a result, we will continue to try to deliver against the capital allocation strategy. I think we have done an awful lot to put ourselves in as good a position as we can, to either trade through these markets as they continue or such that we are well positioned for when that market recovers. So, I thank you for those of you who are shareholders for your support. Please stay with us because I can assure you we are doing all we can to navigate what are exceedingly difficult markets.

Speaker #2: I think we've done an awful lot to put ourselves in as good a position as we can to either trade through these markets as they continue, or so that we're well positioned for when that market recovers.

Speaker #2: So, look, I thank those of you—our shareholders—for your support. And please stay with us, because I can assure you we’re doing all we can.

Speaker #2: To navigate what are exceedingly difficult markets.

Speaker #1: Thank you. We currently have no further questions, so I'll hand back over to the management team for any closing remarks.

Operator: Thank you. We currently have no further questions, so I will hand back over to the management team for any closing remarks.

Speaker #2: Thank you. Look, I think hopefully I've covered all, and there were some really good questions in there. So, this is always a brilliant call for that.

Ryan Mahoney: Thank you. Well, I think hopefully I have covered all, and there were some really good questions in there. This is always a brilliant call for that. So, thank you for your interest. I know you all really closely monitor the market as well as following ourselves very carefully. So, thank you. As I say, we continue to do all we can. I am sorry I cannot point to those moments and the time that those catalysts will start to come through to improve our markets. But in the meantime, I can assure you we will continue to do all we can to try to resiliently trade through. As I said, for those of you who are already shareholders on the call, thank you so much for your support, and we hope to see you again in March for a further update.

Speaker #2: Thank you for your interest. I know you all really closely monitor the market, as well as follow us very carefully, so thank you.

Speaker #2: As I say, we continue to do what we can. I'm sorry I can't point to those moments, and the time that those catalysts will start to come through to improve our markets.

Speaker #2: But in the meantime, I can assure you we'll continue to do all we can to try to resiliently trade through. And as I said, for those of you who are already shareholders on the call, thank you so much for your support.

Speaker #2: And we hope to see you again in March for a further update.

Speaker #1: Thank you to the management team for joining us today. That concludes the Michelmersh Brick Holdings PLC Investor Presentation. Please take a moment to complete a short survey following this event.

Operator: Thank you to the management team for joining us today. That concludes the Michelmersh Brick Holdings PLC investor presentation. Please take a moment to complete a short survey following this event. The recording of this presentation will be made available on Engage Investor. I hope you enjoyed today's webinar.

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