Michelmersh Brick Holdings, the producer of handmade bricks for projects such as the British Library extension, has seen profits slump by nearly two thirds.
The company, which owns Blockleys at Telford, saw pretax profits fall from £1.265 million in 2004 to £518,000 last year.
It attributed £535,000 of the downturn to a one off negative as it changed its year end, while turnover rose by 15 per cent to £21.1 million.
Last year the firm moved its end of year from November to December 31 for administrative purposes, but this short production and sales month meant a one off loss.
Michelmersh, which is based in Hertfordshire, claims to be the biggest producer of handmade specification bricks and clay paviors in Britain.
It was also battling with an industry wide downturn with ten per cent less bricks sold last year and rising gas prices.
But on a brighter note, it saw the value of its net assets increase by nearly 40 per cent to £43.8 million, following an option agreement signed with Persimmon on 60 acres of land at its Telford site.
Persimmon is now preparing a planning application for an initial phase of this land and it is anticipated that Michelmersh will receive significant income in the 2008 and 2009 financial years.
The company increased prices by 8.5 per cent, although this did not fully cover the extra cost of energy.
At Blockleys, which employs 120 people, sales were held back by stock shortages, but as a result of improved production facilities these are now at the correct level, the company said.
Eric Gadsden, chairman, said: "The improved efficiencies gained by our now completed investment programme, combined with the option agreement we signed with Persimmon gives me the confidence that we can see out the current market difficulties and exploit any opportunities it may throw up." ..SUPL: