Michelmersh Brick Share Discussion Threads

[envirovision] 28/1/2010 13:42

Assuming 950 houses over 10 years at a very conservative £25,000 per plot we get a total income of £23.75 Million which obvously allready far exceeds the current market cap of the share price. I'm quite sure in reality the average plot price over 10 years will be a lot higher than this for MBH.

Does anyone know the acreage of the other property assets.

[ed 123] 28/1/2010 13:15

Well, interesting indeed. It's the news we'd been waiting for.

They won't get top dollar for the Telford plots while there is an active brickworks adjacent. Maybe this, allied to the current weak brick market, has led to the plan to reduce production capacity. Thanks again to stuart little for his info.

I don't know Telford. Can anyone estimate the value of each plot? I found these on the web.





Near a brickworks and with some social housing, I doubt they'll get £50,000 average. However, £20,000 per plot for all 90 acres at Telford would exceed today's market capitalisation for MBH. Then there are all their other assets.

Eric Gadsden controls MBH, so it's likely to be his wish to accelerate the property development. I think he's 64 now. Maybe he's looking to maximise the value in MBH fairly soon, to allow him to retire? Only guessing, though.

They are probably haggling over the equity issue price, hence the need for a later announcement (and probably hoping that this planning news will lift the share price). I don't think we pi's will get a chance. Without wishing to appear overly deferential, if Eric nods something through, then it's likely to be good for me too (as a holder).

[envirovision] 28/1/2010 12:05

Well the fund raising is not a certainty yet, we will have to see the full proposal and what happens, if so how its to be done. Taking into account the site, NAV must be something like £1.20 now. Certainly any placing would be at a premium to the current market price, so if the share price increases significantly in the interim (which it may well) then its going to go a long way to determine if fund raising proceeds as to rights or placing.

[shanklin] 28/1/2010 11:55

Yep, Telford & Wreakin Council Planning Department confirmed that to me at 09:05 this morning, so I bought a few more on that basis.

If one extrapolates the planning permission across to the whole 90 acres, TBV must now be way above what's shown on the books.

Can't say I'm delighted about a placing at anywhere near current levels unless I get to take part, as its effectively theft by the placing participants from current shareholders but otherwise this RNS looks very positive for MBH.

[envirovision] 28/1/2010 11:50

PLANNING GRANTED AT TELFORD......HERE WE GO THEN HERE WE GO AND WHAT A LOT OF INFO TO DIGEST:

Trading Update

Grant of Planning Permission

Michelmersh Brick Holdings plc (AIM: MBH), the specialist brick, land development and landfill company, is pleased to announce that planning permission has been granted by Telford & Wrekin Council for the construction of 170 houses on 16 acres of development land at the Company's site at Hadley, Telford. This constitutes the first phase of the development of 90 acres over the next 10 years in partnership with Persimmon Homes plc.

Persimmon have already made a significant investment in the long term planning of this development and Michelmersh have completed the necessary ground engineering works to enable development of this first phase to commence immediately.

Trading Update

Trading across the Group remains satisfactory in what are extremely challenging market conditions and the Board anticipates that the results for the year to 31 December 2009 will be in line with current market expectations.

The Company confirms that it is proposing to reduce production capacity at the Blockleys site, focusing production on its higher-value products, and in particular its award winning pavior product range. Michelmersh is one of only two specialist pavior manufacturers in the UK. The Board anticipates that this restructuring will generate significant operational efficiencies, improve the Group's working capital position and will accelerate the release of further land for development at the Telford site.

Michelmersh remains well positioned as a manufacturer of premium, niche brick and other clay products. Although not insulated entirely from the downturn in the UK housing sector, the Group's two key markets are large capital projects, such as St Pancras and the British Library, and the important Repair and Maintenance markets to which Michelmersh supplies the majority of its output. This has enabled the Group to continue production when most of its competitors have been forced to close a number of their manufacturing facilities on either a temporary or permanent basis.

Michelmersh also operates an established and profitable land fill operation at Telford, as well as exploiting the land development opportunities such as that with Persimmon.

Possible Equity Fundraising

The Company has a number of opportunities to accelerate the development of its other property assets which may include increasing its land fill operations at other existing and possible new sites. The Group is also planning to undertake further redevelopment of certain of its landfill and other property assets. With this in mind the Board is contemplating a possible equity fund raising to raise approximately £5.0 million further details of which are expected to be announced shortly.

Commenting, Eric Gadsden, Chairman, said '"The grant of detailed planning permission at Telford is a very significant development for Michelmersh. We have worked closely with Persimmon over several years to achieve this result and we believe that both companies will now reap the rewards of this investment. The costs have been taken in our results for the previous three years but the returns will now start to come through in 2010".

[shanklin] 23/1/2010 07:20

I imagine Blockleys is an important local employer, so there will be immense pressure on councillors to approve the above planning application.

On a separate tack, does anybody know a ballpark average figure for the number of bricks per house?

Cheers, Martin

[ed 123] 22/1/2010 16:53

Thanks Shanklin. :-)

Thanks from me too to stuart.

I've looked back for clues in the interim report 2009. It says in H1 they produced 28.9 million units and sold 25.5 million units. If they cut output to 20 million a year (and everything else stays the same) they will be underproducing by about 30 million units per year. They reported their inventory at 30 June 2009 as being 20.5 million. This suggests they could afford to take a 4 month break, but if they restarted at 20m per year they would rapidly run out of stock.

Also, as davidosh says, the major housebuilders are reported increased output and sales. I had been expecting gradually improving news here.

Release of the Telford land and start of development was expected to commence early in 2010 (should be an announcement soon). Additionally MBH has 28.7 acres at Charnwood, which should be progressing through the planning system.

[shanklin] 22/1/2010 16:50

This is rather more positive for MBH

[stuart little] 22/1/2010 16:27

Housebuilders still not doing anything in my neck of the woods and with all the manufacturers still carrying a lot of stock its going to be a while until we see shortages!

Some of the Ibstock and Weinerberger factories that have been on shutdown are starting up production again so hopefully they know something I don't!!


I agree that at some point the industry will get caught with its trousers down, with so many factories shut for good when the upturn happens we may go to extended availability as per the good old days but it won't be this year i doubt!

stuart.

[davidosh] 22/1/2010 16:04

Thanks for that Stuart. Have the housebuilders not really started up again then or are they running on very low stocks ? Surely all the production cannot get shut off or nobody will have any in the Spring when presumably building work increases

[stuart little] 22/1/2010 15:48

I work in the brick industry.

Had a letter through from Blockleys today letting me know that they are to stop production for 4 months. This is due to the dreadful trading conditions and the level of stock they currently have.

Once they restart production they are planning on reducing the numbers they produce from 42m a year to around 20m a year.

If I told you the brick industry was a depressing place to work at the moment would you be surprised??????

stuart.

[ed 123] 01/12/2009 13:34

Hi envirovision,

You are not alone, but I'm more interested in fundamentals news than small movements in the share price.

Any news on the Telford site or current trading would grab my attention.

The share price is going to bob around a bit in the short-term. Further out, when the recovery is well established and some of the surplus land has been sold, the share price should be way above its current level (imho).

Holding patiently.

[envirovision] 01/12/2009 13:13

Market Makers dont do things by half do they! Marked up on no volume and only 3K firm at 50p now. I am still of the feeling market makers are not particulary happy at all having to deal in these below 50p.

I guess I'll have to stop wasting my time, posting to myself what an idiot.

[envirovision] 30/11/2009 13:11

Marked up on no volume and only 3K firm at 48p now. I get the feeling market makers are not particulary happy at all having to deal in these below 50p.

[envirovision] 20/11/2009 12:44

Not what im aware. Following on from my prev post, now only 3000 firm at 47p

[bodgit] 18/11/2009 22:59

Is there any news / gossip on progress with the planning application for Telford? TIA.

[envirovision] 18/11/2009 11:24

Took anouther 7473 in my sip, only 3K firm at 45p now, looks like these are getting set to resume their general upwardly direction.

[envirovision] 17/11/2009 10:40

Took 15000 this morning, also tucked 3701 away in my sip yesterday. I think a big housing stimulus is going to occur going foward and be big in the election.

[envirovision] 16/10/2009 09:54

Thats true, but im also focusing on the stuff they make, it should do well going forward.

[shanklin] 15/10/2009 13:40

If they get planning permission the NAV will be a lot higher than 75p

[envirovision] 15/10/2009 13:17

Bout time this started to move up to fair value. NAVs around 75p and even at that level the shareprice would still be ignoring any forward recovery prospects in the sector (which could be considerable).

[shanklin] 14/10/2009 07:56

FWIW, MBH sell porous paviours and unless one applies for planning permission, it is illegal to use non-porous paviours for patios, driveways, etc.

Cheers, Martin

[bodgit] 07/10/2009 12:37

Ed 123, thanks. I now see that a note of this was posted on the iii BB earlier today so thanks to that poster too! Good luck all.