Investment Case

Guided by our purpose to help create lasting legacies, 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
  • Structural undersupply of domestically produced bricks and other key building products provides opportunity for growth 
  • Diversification through exposure to RM&I market
  • Consolidated brick and block market structures
  • Competitive cost of brick production driven by investments in asset base
  • Three large scale projects will be completed in 2024 and will progressively deliver significant profit and cash returns as market recovers
  • Attractive pipeline of optional organic investment projects as market and balance sheet allow 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
  •  Achieved 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
  • History of strong cash generation supports organic investment model
  • Attractive dividend policy with mid-term pay-out ratio of 55% of earnings
  • Scope for selective bolt-on acquisitions
  • Pipeline of further organic investment projects with timing subject to market and balance sheet
  • Leverage expected to fall below 1.5x EBITDA in medium-term
  • Longer-term opportunity for supplementary returns to shareholders as appropriate

Capital Allocation – Our capital allocation policies are clearly stated and designed to maximise shareholder value:

1) Strategic organic capital investment to deliver attractive returns
2) Attractive ordinary dividend with a mid-term pay-out ratio of 55% of earnings
3) Bolt-on acquisitions as suitable opportunities arise in adjacent or complementary markets
4) Supplementary shareholder returns as appropriate