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The specialist brickmaker said revenue dipped 1.7% to £69m in the year to 31 December 2025, while pre-tax profit nearly halved to £4.3m.
The group blamed the drop on a sluggish UK market, tight pricing across the sector and disruption from its own investment and integration programme.
Michelmersh said UK brick dispatches rose by a low single-digit percentage and that it held market share throughout the year, but warned that pricing remained under pressure as industry production volumes outpaced deliveries.
That imbalance left the market highly competitive, with manufacturers chasing work against a backdrop of patchy customer confidence and uncertain project start dates.
The bottom line was also impacted by exceptional charges linked to the closure of its Watlington site, the shutdown of the Hathern Terra Cotta brand and wider restructuring.
The group said the broader UK market never developed the momentum needed for a sustained recovery. It pointed to weak consumer confidence, affordability pressures and slow planning activity, particularly in London and the South East, as key drags on demand.
Bosses said order intake stayed ahead of manufacturing capacity going into 2026, but the reliability of call-offs had weakened over the last year as customers became less certain on programme timings.
Michelmersh also said sector brick dispatches remain around 20% below their 2022 peak, while production capacity has crept up in anticipation of a recovery that has yet to fully land.
Capital expenditure totalled £5.6m, with major works at Carlton, Michelmersh and Floren as the group pressed ahead with kiln upgrades, environmental improvements and the integration of prefabricated operations onto its own freehold sites.
Chair Tony Morris said: “Broader UK brick despatches started 2025 with a positive year-on-year trajectory, but this developing momentum was undermined by the uncertainty regarding potential UK budget policy announcements in the second half, highlighting the cautious sentiment that remains in our sector.”
He added that the group remained watchful over the pace of any market recovery but believed the business was well placed to make progress in 2026.
Michelmersh also revealed that CFO Rachel Warren is stepping down with immediate effect for personal reasons and will leave the business in May.