Fears that a slowing market for new homes, combined with ferocious energy costs, could eat into the sales and profits of Baggeridge Brick knocked 13p of the Black Country brick maker's shares as the firm closed at 1551/2p.
"There is a softening taking place in the housing market," said Alan Baxter, chief executive. "There is nothing fundamentally changed at Baggeridge."
Baggeridge's profit of £2.26 million for the six months to March was 29 per cent down on the buoyant result this time last year. Turnover was 3.8 per cent lower at £23.75 million.
Despite that, Baggeridge finished the half-year with £62,000 of clear cash, against £462,000 of net debt a year earlier - and there should be much more by the September year- end. " We are destocking," Mr Baxter said
The interim dividend is raised by four per cent to 1.3p. Similar treatment of the final pay-out would give the shares a yield of 3.7 per cent at last night's price.
"Second-half performance relative to the comparative period last year will depend on the strength of the UK brick market and our ability to recover through improved prices increased energy costs faced by the whole of our industry," said Baggeridge's chairman, Alexander Ward.
"Notwithstanding the current difficulties, particularly in the housing market, the board remains positive about the group's long- term prospects."
The company's broker Arbuthnot pointed out that fuel prices, accounting for more than 15 per cent of Baggeridge's costs, were fixed in October, and the brick industry does not usually raise price to its customers until January.