Referendum uncertainty reduced demand for bricks in the first half of the year, but Michelmersh Brick (MBH) remains confident that it will meet full-year expectations. Profit was marginally ahead in the six months to June, and while volumes were down slightly, turnover was maintained, thanks to a 2 per cent rise in the average selling price.
Production rose from 34.8m to 35.2m bricks, allowing stock levels to return to the equivalent of around 10 weeks of sales, thus ensuring timely delivery to its customers. Crucially, order intake has remained robust, with forward orders equivalent to over 47m bricks. Demand is coming from a revived repair, maintenance and improvement market (RMI) as well as from housebuilders and regeneration projects.
Production rose at the company's two biggest sites but there was a fall in output at the Romsey site as a result of clay geological issues at the quarry. However, these issues have now been resolved, and a new kiln will also become operational in the second half.
Analysts at Cenkos are forecasting adjusted pre-tax profit for the year to December 2016 of £5m and EPS of 4.9p (from £4.7m and 4.6p in 2015).
| MICHELMERSH BRICK (MBH) | ||||
|---|---|---|---|---|
| ORD PRICE: | 57p | MARKET VALUE: | £46m | |
| TOUCH: | 55-59p | 12-MONTH HIGH: | 110p | LOW: 50p |
| DIVIDEND YIELD: | 1.8% | PE RATIO: | 13 | |
| NET ASSET VALUE: | 62p | NET CASH: | £2.7m | |
| Half-year to 30 Jun | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2015 | 15.3 | 2.5 | 2.47 | nil |
| 2016 | 15.3 | 2.6 | 2.57 | nil |
| % change | -0.2 | +4 | +4 | - |
Ex-div:- Payment:- | ||||
