Investment Case

Guided by our purpose to keep Britain building, 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
  • Unique, trusted and respected heritage brands
  • High production barriers to entry supported by secure long-term mineral and land reserves
  • Well-invested, efficient and profitable asset base
  • Strong customer relationships
  • Market demand driven by structural housing shortage
  • Undersupply of domestically produced brick and other key building products
  • Consolidated market structure
  • Industry leading cost of brick production
  • Two large scale projects commissioning in 2022 and 2023 will progressively deliver significant profit and cash returns from 2023
  • Further £200m pipeline of attractive projects
  • Proven delivery of innovation and manufacturing excellence
  • Inherently sustainable and durable products
  • Ambitious ESG targets to 2030
  • 22% reduction in carbon emissions 2010-19
  • Commitment to commercially robust ESG agenda including a further 32% carbon emissions reduction target 2019-30
  • Strong cash conversion supports organic investment model
  • Free cash flow in excess of £600m expected to be generated 2021-30
  • Progressive dividend policy
  • Balance sheet strength allows selective M&A bolt ons
  • Leverage expected to remain at or below 1x EBITDA
  • Supplementary returns to shareholders as appropriate

Priorities for capital

1) Strategic organic capital investment to deliver attractive returns
2) Progressive ordinary dividend with the pay-out ratio increasing to 55% of earnings from 2021 onwards
3) Bolt-ons as suitable opportunities arise in adjacent or complementary markets
4) Supplementary shareholder returns as appropriate