UK Construction and Law

Brick despatches fall again and the sector is still a quarter below its 2022 peak

By Staff Writer  |  2 September 2026

A premium brick maker reported half year revenue down 9.5 per cent and closed a Leicestershire site. Its measure of demand, the volume of bricks leaving the yard, is the one to watch on any order book that depends on housing.

Michelmersh Brick Holdings PLC reported its half year results on 1 September 2026, for the six months to 30 June. Revenue fell 9.5 per cent to 32.4 million pounds, from 35.8 million pounds. Profit before tax was 2.8 million pounds against 2.9 million pounds. Operating profit rose to 3.1 million pounds from 3.0 million pounds and the gross margin improved from 33.6 per cent to 37.0 per cent. The percentage movements the announcement prints beside those two lines are worked from the rounded millions rather than from the figures in its own income statement, so only the amounts are given here. The company moved from net cash of 1.5 million pounds a year ago to net debt of 5.0 million pounds, against a borrowing facility of 20 million pounds committed until August 2028. The interim dividend was held at 1.60 pence.

The number that matters to an order book

The margin improvement came from cutting output, not from selling more. United Kingdom brick despatches across the sector fell about 9 per cent in the first half. The company's own despatches fell about 2 per cent, which it puts down to the spread of its end markets. On a rolling twelve month basis, sector despatches remain more than 25 per cent below the high of 2022, and the company records this first half as the second lowest for despatch volumes since 2017.

Sector production volumes fell about 10 per cent over the prior year, which held inventory across the industry at around 550 million bricks. Supply has been cut to match demand rather than demand recovering.

Three operational decisions sit behind the figures. Production at Freshfield Lane was reduced by about 30 per cent in April, with the loss of 30 staff. Brick making at Romsey in Hampshire was paused from the start of the year, restarted in May at reduced volume and was expected to reach near full production from the start of August. The Charnwood site in Leicestershire closed all operations at the end of June, with its prefabricated production lines moved onto freehold brick sites. Together those decisions cut manufacturing volumes by nearly 5 million units in the half, partly offset by 3 million units at Carlton.

This is a long trough in construction activity and our response, given the lengthy duration of the downturn, has been to be flexible and adaptable with our business operations.

Ryan Mahoney, Chief Executive Officer of Michelmersh Brick Holdings PLC

Order intake is not the same as work

The company reports order intake running ahead of manufacturing volumes, which sounds like recovery until the second half of the sentence. It states that assessing the timing of despatches against the order book remains very challenging, and gives two reasons: the compounding nature of regulatory costs, and shallow consumer confidence among its customers. A committed order that will not be called off is a forecast, not a programme.

For anyone pricing a supply contract or a materials escalation clause, the distinction between order intake and call off is the one that decides whether a programme assumption survives.

Two figures in the announcement carry a warning for cost planning. Over 90 per cent of the group's energy requirement for 2026 is hedged, and over 60 per cent of its expected 2027 requirement is contracted at pre conflict prices, with further contracts into 2028 and 2029. Those hedges are what has held selling prices steady through a competitive market. They also run out.

The announcement puts company compiled consensus for full year adjusted EBITDA at a range of 12.9 million pounds to 14.3 million pounds, and the company expects to trade within full year expectations. It does not forecast when despatch volumes recover, and says in terms that pointing to such a moment is very challenging.

Bricks are an early indicator because they are laid early. A maker cutting kilns and closing a site is telling the supply chain what it already suspects about the next twelve months of housing starts.