Investment Case

Guided by our purpose to keep Britain building, we aim to create sustainable shareholder value and deliver value for all or our stakeholders. Our investment case is formed across 5 key areas:

  • Broad, complementary product range comprising clay bricks, aircrete and aggregate blocks, flooring products and more
  • Unique, trusted and respected heritage brands including London Brick and Thermalite
  • High production barriers to entry supported by secure long-term mineral and land reserves
  • Well-invested, efficient and profitable asset base
  • Strong customer relationships enhancing order-book visibility
  • Market demand driven by structural, through-cycle new housing shortage and resilient RM&I markets
  • Undersupply of domestically produced bricks and other key building products provides opportunity for growth and insulate from short-term market cyclicality
  • Resilience through exposure to RM&I market
  • Consolidated brick and block market structures
  • Industry leading cost of brick production
  • Three large scale projects commissioning in the next two years
    will start to progressively deliver significant profit and cash returns
    from 2023
  • £200m pipeline of attractive projects to leverage asset base being invested over the next decade
  • Proven delivery of innovation, manufacturing excellence and productivity improvement underpins profit growth
  •  Inherently sustainable and durable products
  • Ambitious ESG targets to 2030 and beyond under the ‘Planet Product People’ framework
  •  22% reduction in carbon emissions between 2010 and 2019
  • Commitment to commercially robust ESG agenda, including a further 32% carbon emissions reduction target between 2019 and 2030
  • Strong cash conversion supports organic investment model
  • Attractive dividend policy with pay-out ratio of 55% of earnings
  • Balance sheet strength allows selective bolt-on acquisitions even with pipeline of investment projects
  • Leverage expected to remain at or below 1x EBITDA
  • Supplementary returns to shareholders  as appropriate. £40m share buyback completed in 2022

Priorities for capital

1) Strategic organic capital investment to deliver attractive returns
2) Progressive ordinary dividend with the pay-out ratio increasing to 55% of earnings from 2021 onwards
3) Bolt-ons as suitable opportunities arise in adjacent or complementary markets
4) Supplementary shareholder returns as appropriate