Investment Case

Priorities for capital

Data for year ending 31st December 2022.
Organic growth

Capital investment remains core to strategic growth.

Capex of £25 million planned for 2023

Delivery over the last 4 years
R&D and NPD
  • Continued focus on R&D and NPD.
  • New product ranges.
  • Digital strategy progressing well - 'Dropship’ digital trading platform developed.
Delivery over the last 4 years
Ordinary dividends
2022 final dividend of 9.9 pence per share

Total dividend (interim and final) of 15.6 pence per share
Delivery over the last 4 years
Deleveraging (reduction of debt)
The policy was revised in 2022 in the context of increased balance sheet leverage following the acquisition of Marley.

Focus on accelerating the repayment of borrowings until leverage is around one times EBITDA (December 2022: 1.35 times)
Delivery over the last 4 years
Selective acquisitions

Good pipeline of potential acquisitions

Target selective bolt-on acquisition opportunities in New Build Housing and Water Management

Delivery over the last 4 years

At a glance

Data for year ending 31st December 2022

Strong track record

  • Record revenue and adjusted profitability in 2022
  • Strong cumulative annual growth rates across all metrics
  • Consistent dividend growth

Supportive UK construction market fundamentals

  • Strong long-term outlook for Infrastructure and Housing
  • Shortage of housing stock and latent requirements for roofing upgrades
  • Increasing requirement for water management and drainage solutions

Diversified group with strong market position

  • Transformational acqusition of Marley increases diversificaition and resilience
  • Increased diversification evidenced in the Group's three new operating segments
  • Broad range of end markets, including New Build Housing, Commercial and Infrastructure and Private Housing RMI

Efficient, nationwide manufacturing network

  • Increased network (post-Marley) with manufacturing plants, quarries and distribution sites across the UK
  • Unique national network ensures proximity to customers and an efficient logistics footprint
  • Well-invested sites with expansion and rationalisation opportunities

Logistics excellence and sustainable supply strategy

  • Own fleet with a broad range of capability
  • Centralised procurement ensures optimal buying power and focus on sustainability
  • Majority of raw materials sourced in the UK

ESG market leadership

  • Sustainability and carbon reduction commitments embedded in strategy
  • 33 per cent reduction in carbon in the last four years
  • 100 per cent of concrete and natural stone products now fully recyclable

Strong balance sheet and cash generation

  • Strong cash generation - OCF:EBITDA of 91 per cent in 2022
  • Net debt of £236 million at 31 December - with conservative gearing of 35 per cent
  • Significant headroom im bank facilities - with net debt: EBITDA less than 1.5 times

Clear and consistent capital allocation policy

  • Priority given to organic capital investment (£25 million capital expenditure planned for 2023)
  • Focus on innovation, R&D and NPD and on reducing the carbon intensity of manufactured products
  • Dividend policy of two times dividend cover (based on adjusted earnings) over the business cycle
  • New deleveraging objective added this year

Focused growth strategy

  • Goal to the become the UK's leading manufacturer of products for the built environment
  • Underpinned by eight strategic growth pillars
  • Enabled by people and talent development
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