Michelmersh Brick Holdings plc (MBH) Earnings Call Transcript & Summary

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 could be submitted via the Q&A box. It trades on the panel on the right-hand side of your screen. I will now hand over to Ryan Mahoney to begin the presentation.

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 wanted to sort of give you a bit of a on plan and running order of the presentation. 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, 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 a lot of interest in terms of questions, both presentations. So we'll try and ensure that, that facilitate never gets a chance to ask what they want to ask of me today. So about Michelmersh. We are a premium brick and prefabricated brick manufacturer. We operate throughout the U.K. with a further facility in Belgium. We have 4 principal lifetime revenue sources. And really, that's reflective of the life cycle of the nature of our quarries more than anything else. So 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 noncore and surplus, and that becomes [indiscernible] investment land. And before that element, if we need to fill the holes back in from digging out the raw materials in the clay, we operate and have licenses at our sites for landfill operations, but they are all dormant because all sites are currently active or in investment land status. 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 6 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, and that does cover, as I said, premium bricks, pavers and special shape bricks. We look to address the full market demand and particularly in what has been a very long trough, and those 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. And the manner in which we try and navigate those markets is very much focused on targeting new builds, RMI, sort of repairs, maintenance and improvements, as well as then a sort of bucket of others, which is architectural specification schools, hospitals. And at any one time where our plan very much is any 1 time of one of those markets is quieter, we look to try and drive opportunities in 1 of the other 2 major pillars there. We tend to sell through distribution. And again, that limits the sort of the size and the scope of the commercial team. And again, that's been very much the run of how we've sold for many, many years. So 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. And 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's 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. And again, I'll come on to talk of that in a bit more detail. Just in terms of capital allocation framework, we really clarified this first and foremost in September 2024. And 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've 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 a few followed results in '24 and '25. We've had an above normal cadence of capital investments. We put GBP 11 million into our sites over those 2 years. And you will have seen if you've seen the results that we're -- again, back to that sort of normal level, normal level what we talk about is GBP 3 million to GBP 4 million investing in enhancing our facility. So that's really the number to think about on a sort of steady state. Very much focused and respecting regular returns to shareholders. You can see that while the dividend hasn't grown over the last 2 years, we've maintained the dividend. 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. And again, sitting alongside dividends is the more flexible share buyback program. And again, you can just see on the box on the right in terms of the target there, 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 lower net debt position at the moment, albeit today, you can see in the morning statement, we flagged our expectation and return into cash next year and the sort of the minus 5% that's on the balance sheet at the 30th of June, we expect that to be at 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. The key messages, if you leave with nothing this afternoon, it's 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. 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. And I think, by my reckoning, we probably had 5 full storms since the start where we thought that the recovery was building some momentum 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 over 25%. And really that's reflective of just how challenging the construction sector is. And we measure that number by U.K. brick dispatches, which is the government statistics. So we know that, that is a good indicator of where we are. Within that performance, our own revenue, our own top line performance is down 9.5%. But just unpacking that number a little bit, this is really made up of 3 major items. Our own dispatches are down about 2% period-on-period. And again, if you see that, 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 U.K. brick dispatch volumes. 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. 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 0.5 billion, so 550 million bricks on the ground in terms of inventory volumes across all the manufacturers in the U.K. 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. 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 fresh field lane and Michelmersh sort of southern sites, which are both soft month producing sites. London the Southeast has been difficult for about 2.5 to 3 years, and that really started with the legislation changes that came off the back of the Grenfell tragedy. And what essentially that did on the Gateway 2 and Gateway 3 legislation is that pushed forward the need for complete planning applications as opposed to in the old days before Gateway 2 and 3, you would do those plans in stages. And so what that allowed for was more progress to apple on site. What then happened was an absolute period of about 12 to 14 months where the market was delayed and under the Southeast. Now whilst that is alleviated, that has been replaced with challenges around consumer confidence and the changes in the cost base for developers. And therefore, the gross development value 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. 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. And then the other element just 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. But equally, we have also had to move away from lower-margin manufacturing, and that's been a deliberate part of the decision 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. 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. And again, whilst revenue has absolutely dropped and I've just run through that, very focused on self-help in terms of the cost base, controlling those elements that are within our gift, and you can see that coming through in the margin improvement. And whilst we are in a sort of a GBP 5 million borrowing position, I've talked about that being the sort of the high point for us in terms of that level of debt, 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. And what have we done, I suppose, with regards to that self-help, and this middle column is really facilitated that. So we've been very focused -- in those 2 years, I talked about in terms of more clear CapEx investment. What we're really trying to do there was pull forward the timing of capital improvement activities to give ourselves time for the market to improve. We've done that and those sites are responded well off the back of that. What we've had to do now is for particularly a fresh field lane, we have had to take a more deliberate and targeted response and we have slowed down production there by 30% of the key sites in the South. 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. We kept our people on who did a lot of the work themselves. They know that site is the best. And then we reopened that site in May, and it moved towards full capacity in August. And again, that's sort of facilitate for prefabricated expansion on that side, but also some facility improvements as well to drive the efficiency of the operation there. 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, 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. 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. 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 GBP 3 million to GBP 4 million is the way to think about the business. 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. And clearly, again, today 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. I'll move over the financial highlights that's -- and cover those within the income statement. And with this, I'll try and talk to moments by exception. 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 loss ahead of anything on the top line or indeed coming through from cost of production. So very focused on ensuring that whilst the top line has dropped to 9.5%, you can see that through our own self-help adjusted EBITDA showing that pickup of 1.7%, and likewise, the industrial basic shares at the bottom there. And again, you can see that really is starting to bear out in terms of how we're focusing on the earnings progression through the income statement. And then just to draw the attention there to the finance costs in a borrowing position and a lot of that was around the time of working capital, which [indiscernible] will talk about on the balance sheet. But again, very focused on getting that back because we don't want the ones so leakage through the income statement. So the balance sheet, generally, again, the shape of this stays pretty consistent. Amortization of the intangible fixed assets, you can see there, [indiscernible] moving down in line with how that 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 depreciation of asset bases and indeed where we're capitalizing costs to where we've enhanced our assets. 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. The really key 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 1, over the last 2 years, and allowed us to continue to fulfill customer orders in those sites Floran, Carlton, Blockes at Michelmersh, where we were doing work and ensured unentrusted supply to our customers. But a lot of that inventory is now at fresh field Lane. And again, what this allows us to do is to reduce costs by 30% at that site, but we still have capacity to deliver in line with normal cadence. So in line with the best of times on fresh field lanes. So -- and what we're able to do here with a strong balance sheet is to say, well, we've got -- we brought 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. And really importantly, at fresh field lane, we've maintained a really high core quality of people there. So rather than starting from scratch again if you mothball the whole site, you've got the core competencies and core skills on-site there so that you are trading and embedding rather than starting again. And that was a really key consideration why we approached fresh field lane differently to looking at the timing of capital improvement works. You can see the net debt moment on the slide there, that's sort of minus 5. 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. So Q1 is always our lowest collection month. So there's a little bit of timing in there. And those of you who've got the chance to look at the full balance sheet in the RNS, you can see that in terms of the quantum of the receivables. Very little in there is doubtful. We monitor that incredibly closely, as you'd expect us to. So yes, that is a good number in terms of collections. So at the bottom of the page there, you can see NAV per share, and you can obviously see there's a decent dilution there in terms of current share price, and we hope that, that will improve over time. Cash flow, very important statement for us. You can see there, again, the time of working capital cycle there at the top of the page. But 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 joined before will know that we closed Carlton, which is one of our biggest sites for 3 months for capital improvement works. A few other things on the page there, proceeds of loan drawdown, you can see GBP 4 million borrowed in the first half. As I said, we expect to start paying that number back to expect that proceeds to start to be offset against repayments as we move through towards the end of December. And dividends on the page there, again, recognizing the importance of that, that 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. 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 now on 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 chance and the Prime Minister more time to look at [indiscernible] plans decision-making. But unfortunately, the impact there, as you can see is by the end of November, by the time that pronouncements came out, really, the impact had happened on our sector. But really pleasingly, since then, disciplined 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-on-period change. 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, 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, 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 and will rise and fall. Some of the headlines around British Golders 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. So a need for a level playing field in terms of the cost of carbon and indeed utilities there is 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. U.K. 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, and 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 there to stay. And you can see at the bottom, highly illustrative. The Belgians exports 60% of their production. We know the market well. We've got a plant there ourselves to importance in the United Kingdom, albeit we work very hard to maintain a strong local market, which for local for us is West Germany, Holland and Belgium itself. But you can see the level of exports in the U.K., very, 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 on what my peer group are doing. But you can understand hopefully, the clarity that we try to wrap around that in the RNS this morning and indeed what I'm covering with you today. But you can see there 4 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. So we're once again expecting full year numbers at around that GBP 1.4 billion to GBP 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, 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 -- it's a good slide. And I would cast your minds for 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. But in terms of the medium term, there is a critical shortage of new housing. It is critical. You can see in the government's efforts to try to unblock the housing market. But it is difficult to turn, it's difficult to turn quickly. But as I say, the #1 issue we face as the country is the confidence of us is the confidence of yourselves on the call to make decisions around improving your home, 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. And that just comes from sentiment and how we all feel in terms of making our own capital commitments against our own balance sheet and how we're feeling about our own longer-term financial security. We know inflation remains above the Bank of England target, and that has sadly meant that we haven't had the sort of the 3 or 4 interest rate cuts. But I think we can all sort of do business at around that sort of 3% level. 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, 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 U.K. population expansion, but also for those of you who've joined the call before, you will know that there is a rise in single dwellers as well, which is also consuming the U.K. housing stocks. The government has committed to a target of 300,000, they keep double down on that. Of course, we'd delight to support them. The number I always talk about is something approaching [ 200 ], something of reaching [ 200 ] we're all busy at 220,000. That's what we did in 2022. By the way, 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. So again, anyone who's read in the ground India or China or Turkey, they are a part of the market, but tiny as things stand. But again, not being complacent. You can see the government are also talking about improving the planning process, reducing barriers, red take, planning approvals, we don't know what this detail looks like in terms of [indiscernible] decision-making, funding for council housing as well, and you can see that stated commitment to quality social housing as well as rather than just simply being a volume game. And I think there's real recognition that how people live, where they live, really makes a difference to the longer term. And then the bottom, the one that's very important for us, as I talked about we always target that taking 1/3 of our portfolio as the repairs, the 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. So 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's 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've heard me before talking about brick being best. Here is the favorable material of choice for high-rise cladding, remedial work as well, as well as specification projects. 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, insurers like it, and you all like it because you don't have to spend as much on the facade. And anyone that's got a paint of property, will know the cost of maintaining that is a steady state of repairs and maintenance. But for us, the brick, we see it as having that 200-year lifespan, but it looks better pretty much every day from the day it's 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 words of giving lots of time for questions. I just wanted to finish n 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 our business strategy has 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. 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 and I'll give you a quick example of what that could look like. If you've got 100 houses through planning, for example, ordinarily, you may build those out in 3 or 4 phases over a period of 12 months, and there'll 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 developers are tending to build only the show homes rather than a deeper part of that particular site. 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. 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. We have seen improving momentum in Belgium, which is important. And we are trying to build out the commercial team and have built out a commercial team as we look to grow our market share in some of those other peripheral markets at which the Netherlands we believe is a big one in that very rig-centric space. And as I said, in terms of the strength of the balance sheet, look, I believe we're strong as at the 30th of June. On a 12-month basis as a net debt to adjusted EBITDA were at 0.4x. So on anyone's metric, that is low gearing, but I want it to be back towards that net cash position because very much that's what we said is our capital allocation priority. And you can see in the statement again, repeating that fact. So I think it's important, it really does land really targeting getting back to net cash for next year. We've tried to add and we have added the sort of the consensus trading bandwidth, which you can see on the bottom of the page there. And again, we know that you don't all 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 full year, that is the range to assess us by. And look, the caveat there on the bottom of the page clearly is, you're all intelligent, you all follow the markets. There are a plethora of macroeconomic uncertainties that we are facing and they change daily. And so whilst we're sitting there today saying that please do recognize there is risk within that second half. But as I said, we are doing what we can to mitigate that and control the controllables within our business. And 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. And look, I think it's clear that U.K. demand is difficult to predict. We -- there are lots of catalysts that we could talk about, and I'm sure you will ask questions on. 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 us in the near term is stability of policy. That I think could be the moment that to start 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, and that will be our ask of the government. But what I'll 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. 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 will wait for better times. And with that, I'll pause for questions, if I may.

We've had a number of questions pre-submitted and submitted live. [Operator Instructions] The first question reads, the housing market has been pretty tough. You seem to have held up better than the overall market. you actually winning market share from competitors?

Yes. I mean if you follow the other U.K. listed brick manufacturers, I think everyone's 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 dispatch from our portfolio, not about assets that are of fall 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 mouthful because they're full that there is lots and lots of examples of aggressive pricing that's out there 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. So my job is to try to hold discipline of average selling pricing and whilst 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 [indiscernible] with my customer base, we try to be really clear and concise on message to them. You'll see the word collaboration in this announcement actually, but we remain so collaborative with our distribution partners. And I do believe that long-term the relationship, but also the manner in which we carry ourselves and conduct ourselves with them that matters usually to really protecting our market share. It can't be just about price because we're at the premium end.

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

Yes, it's a good question. I think, look, there's a -- 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. 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. I'd say again, the point that I really want to make -- 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 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 some because we're there to help them with taxation, with that to help them make sure that we can manufacture the product to help us with the level playing 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 can see that there are other things that we could ask for help to buy, stamp-duty reform, that all of those would be hugely helpful. But as I say, I think we've got to be able to say to them, give us the ability. If their hands are tied in other ways politically, that's the bit that could really support the industry, but do keep an absolute laser focus on that level playing field.

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 U.K. brick industry cutting production. Is there a risk we end up relying heavily on imported bricks when house building eventually takes off?

Yes, 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 ground volume. 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 because we took away the actual manufacturing capability for products that are needed to match the vernacular or whatever channel or village. People are looking to make improvements or indeed put down new housing. 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 and more in May. So I think the inevitability is that imports may continue to support U.K. housebuilding. And as I said, it is an important part of the model. And you can see that on the Belgian statistics, 60% of manufactured Belgian are exported from their domestic markets. So -- and the other thing just to say about a lot of those European distributes is, a lot of them are family owned, so they can take different decisions than all -- the lion share of about 98% of capacity in the U.K. 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 don't improve in the United Kingdom.

The next question reads, with competitors cutting production and even mothballing capacity, does that eventually create a better pricing environment for Mickeler, Forterra, for example, has significantly reduced production in response to weak demand?

Yes. I think the absolute keyword in that question is the word eventually. Yes, I'll answer that really in the shortest advances. Yes, eventually, it would help in terms of you've essentially got less demand -- sorry, more demand for a diminished pool of the U.K. manufactured products. I want the whole industry to be busy, 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, 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 we sell into. But it's a key point is the word eventually, 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.

The next question reads, your bricks tend to come on 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?

Yes. In all honesty, the latter, absolutely, I'm sure that happens, but please do look at the statistics that I quoted today. The market is down 25% period-over-period down 9%. We ourselves 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. It's not just about price, it's about how we look after our customers, how we look after delivery profiles, how we help them if they're going to change their own sort of on-site cadence in terms of deliveries. All of that is wrapped up underneath that premium products and service. So that is an important part. So I would say 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.

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?

Bold, I like that question. Yes, so absolutely. Last acquisition November 2022. I think it's 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 newbuild space, of which that prefabricated asset was really squarely aimed at. Of course, there are good assets out there, absolutely there are. But pleased 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's so difficult. And I'll go back to one of my points I said earlier, the 5 fall storms where we thought we had momentum only for it to be pulled away again. So yes, there are of course assets, but it's a difficult moment for us. And as you can see, I'm really focused on delivering against the capital allocation priorities, really trying to reward shareholders with a steady and consistent dividend. And I think there, the moment for us to assess our capital allocation priorities rather than doing something more ambitious in the acquisition space as things stand.

The next question reads, what is the latest new time line on the Charnwood Ashby Road site? Can you give any indication of potential future value in the site?

No, it's a good question. And look, I think there is absolutely a commercial sensitivity to that valuation. We said -- and again, just reiterating, there are 2 parcels there. The [indiscernible], which hasn't seen actions since 2023 when brick manufacturing ceased on site. And then the actual land of buildings, which have been used for Hathern Terra Cotta for clay production up until the end of last year. And then also in terms of the prefabricated portfolio. So 2 parcels of land. One is about 4 acres the other is about 28s. The point around value is I can't give you an indication because that will compromise us commercially. 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 the noncore part of the portfolio and going back to one of those 4 pillars I talked about, we will look to convert that into cash in due course indicative timing, I can't do any better than we expect something in the short to medium term.

Do you expect revenue growth to return in the second half? Or is the market still too uncertain?