Michelmersh Brick Holdings has recorded a 29.3% drop in its profit before tax, totalling £2.9m in the six months to 30 June.

The brick manufacturer’s operating profit also fell by 26.8% in this period to £3m, while its earnings per share fell by 26.7% year-on-year to 2.47 pence.

However, Michelmersh described the performance as resilient in this period, as its revenue increased by 1.1% to £35.8m. The firm said this reflected increased UK despatch volumes, which were offset by “very challenging markets in Europe”.

This includes a Belgian market which has recorded a further 20% decline in housing activity from 2024, which resulted in a drop in revenue.

Michelmersh’s results have been affected by an additional shutdown of its Carlton site in January, which led to a one-off impact on profits in the first half.

Chair at Michelmersh, Tony Morris, said: "The timing uncertainty in the recovery of the wider UK construction industry and Belgium brick markets continues to challenge the Group. UK brick despatches remain c. 25% below the peak in 2022, whilst Belgium is some 40% below over the same period. Despite this, the Group continues to outperform the UK market in despatch volumes. Our fundamental core competency remains our significant strength in the premium end of the brick market in the UK and Benelux addressing a broad and diverse end user base."

The firm stated that it is recording resilient momentum in its order intake and is continuing to run ahead of manufacturing volumes.

Furthermore, it is focused on maintaining a well-balanced forward order book and appropriate pricing in a competitive market to support demand across its customer base.

Despite this, Michelmersh said that while trading is continuing to improve into the second half of the year, it does not expect to record a profit increase in its full-year results.

However, it does expect the full year to be "broadly reflective" of its 2024 financial performance.

Morris concluded: "Given the scale of the investment to improve the production efficiency across our facilities over the last 12 months, the additional two-week shutdown at Carlton has impacted our profit metrics in the first half. As we move into the second half of the year, we are now seeing a normalised operational cadence in the UK which is supporting our commercial focus on maintaining momentum in our order intake and balanced order book.

"With the strength of our balance sheet and net cash position, we are positioned well to continue to trade through the ongoing challenging market conditions but we do not expect to recover the profit shortfall in the second half. As a result, and given the in trading we are seeing in H2, we expect our full year performance to be now broadly in line with FY24 before returning to growth in 2026."

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