Michelmersh Brick Share Discussion Threads

[my retirement fund] 23/1/2017 15:23

Moving above trend line. Looking very rosy to me.

[anley] 18/1/2017 15:30

I still think that someone will make a move on this company in 2017.

At what price ....... above 70p which AlanRussell mentioned. Add a value for redevelopment and you could be talking about 90p+.

We will have to wait and see............

[alanrussell] 16/1/2017 20:45

Very reassuring news indeed. I was sufficiently encouraged to top up this morning and, having tapped the calculator for a while this evening, will probably add further tomorrow.

The balance sheet is looking increasingly strong. Net assets at YE 2015 were 60.6 p per share (only 2.5m out of 49.2m were intangibles). To that is to be added the retained profit, £1m uplift from today's RNS and any revaluations pointing to about 70p per share.

EPS for 2015 was 4.44p so heading towards a PE of 10. Not expensive. The sale proceeds announced today represent 3.3p per share (gross).

Cash at half-year was 2.7m. Add cash generated since (note the last line in the RNS) and 2.68m less costs coming late summer, say 8+m.

Dividend of 1p per share cost £812,000 so scope for hefty increase here.

So cap £40m, profits about 4.5m, trading at 28% discount to sound assets, pension scheme defined contribution not final salary, progressive dividend policy, what's not to like?

The usual of course. Trading in building materials is about as cyclical as you get. Just look at the share price history! Energy costs must be rising and with virtually no overseas sales no help from weak pound. And always the temptation to empire build although, in all fairness, the board have been admirable cautious (except that acquisition up north a few years back that has never been mentioned again). Indeed I would suggest the board is one of MBH's main assets.

Also the October RNS that knocked the share price mentioned pressure on selling prices in 2016. No comment today presumably means the "little or no recovery in prices at the start of 2017" mentioned is still the position.

Ren you mentioned developable assets. Telford is the main one, about 90 acres - 4.6 acres were sold in 2013 for 15m so work that out (allow for significant land restoration costs). Bovis are still selling away and more land will only be released as the clay is exhausted and followed by landfill so to be spread over many years.

Charnwood is the other of note. MBH was going for pp for 200 houses but now wants to continue working the site for the foreseeable future - last years final results talk of 12 years supply of clay so again very long term.

Bear in mind that while the ex-clay extract sites achieve pp fairly readily as brownfield sites, they are only brownfield when exhausted so little chance of a takeover targeting quick realisation of development value. One for the patient I would say.

[renixus1] 16/1/2017 19:14

What will they do with the cash? Surely the plan isn't just to add it to existing cash reserves that are already more than forecast! How much more acres have they got that might potentially be rezoned for housing one day? I haven't researched this company too well so please be gentle if you know the answers, I don't.

[my retirement fund] 16/1/2017 08:58

A very pleasing and positive update today. Like for like revenues maintained at 2015s all time record. No bad news including that of the dodgy private bulletin board posters claim regards alleged production problems. Anarge upward realisation of book value on a confirmed land sale deal. Cash generation ahead of expectations.I have increased my exposure on the back of this.

[ed 123] 03/1/2017 14:07

Took a look at the longer term chart. The share price has fallen to the lowest price since September 2013.

Further doubts about issues aired in the October 2016 trading update?

Energy costs heading higher with fall in Sterling - though a lower Sterling should help with competing imports of bricks.

Results not till 20 March 2017, so a bit of an information vacuum atm.

[anley] 08/12/2016 13:43

A help for MBH would be a relaxation on Stamp Duty in 2017.

Big homes and other business type properties are big users of MBH products and I am about to look into using them in Wimbledon in 2017 on a huge house/flat renovation.

In the meantime the price has recovered and with some positive news I would not be a shorter of this share..........

[anley] 08/12/2016 10:24

All buys in a thin market = no production problems - see previous posts.

[anley] 05/12/2016 14:32

Its not raining.............

[my retirement fund] 02/12/2016 23:53

Word from the street is commercial construction projects have seen their largest slow down since 2012 - the 1st qtr of 2017 is going to be very grim indeed with lots of profit warnings and scaling back of revenue projections.

On another note I see the continued drip drip of selling here over the last few weeks has gathered apace and I do think we are in for fresh new multi year lows.

I have also noted the poster here who has flagged production problems in the tiling factory.

If it doesn't rain it pours.

[anley] 02/12/2016 16:54

I will chase them up on Monday..........

[hedgehunter2] 02/12/2016 16:29

Dear Anley

Be very grateful for your update from brokers as you seem close to this PLC, must be pretty simple for brokers to ring the company to verify my information which you where dismissive of.


Share prices slide over last few days shows me certain people aware of issues. Strange why no announcement from Cenkos.

There is a few short sells being place I see?

[anley] 29/11/2016 11:11

The brokers are now checking so one will have to wait.

[anley] 28/11/2016 16:16

I will speak with the brokers and tell them what an employee said to you this morning and post the answer.

[hedgehunter2] 28/11/2016 13:24

May I suggest you go straight to the source.

Mr Mark Wall @Michelmersh.


Please also check with Elliots builders merchants.

Why do I know its true they just let me down on a big order of tiles.

The company should publish this on RNS but has covered it up.

Please check I would be delighted this is thrown in the open.

[anley] 28/11/2016 10:56

I have reasons to believe that the above story has no foundations to it.......and the company is investgating.

[anley] 26/11/2016 11:03

We will get to the bottom of this on Monday 28 November.

[hedgehunter2] 24/11/2016 17:06

Does anyone know full details of What is the issue production issue regards the Romsey site having a broken manufacturing machine for roof the tile production.

Builder merchants can not get orders placed from Sept and this is not being advised to market by brokers Cenkos? Why no RNS statements.

Spoken to three builders merchants they can not fulfil orders for supply and give a time frame.

[anley] 14/11/2016 11:52

Taken from a brokers report.............

"the real potential is from the holes in the ground left once Michelmersh has cut its bricks. The sites can be turned over for residential development or, possibly even more lucratively, as landfill sites".

I remember Hanson taking over London Brick - just for the holes = the capital gain and the bricks = cash flow and profit. It all came to pass in the end.

[anley] 10/11/2016 16:02

Stuart,

I remember the days when my farther bought bricks direct from London Brick but by the mid 70's that was stopped and brick selling was put in the hands of the wholesalers such as Travis P and others.

Dad switched as LB became slow in delivering and so better quality bricks were bought and the cost of the house went up and so did the sales price hence "the punter pays in the end". In a way some local builders merchants do push one brick to the detriment of other types and if I was a board member this is an area I would look at.

Otherwise a reasonable and well run business but in need of new blood and a take-over.

[stuart little] 10/11/2016 14:28

I disagree about its marketing and sales force argument.

Their brochures, website and samples department are as good as any of their peers.

They don't need a massive sales team as bricks are sold through specialist distributors (such as myself). We are well aware of the products MBH offers and promote them when the right job comes along.

I don't see a takeover on the cards but then I didn't see Persimmon making its own bricks so one never knows.

Stuart.

[anley] 10/11/2016 12:27

Money speaks and dont forget there is another big City shareholder with a 15%+ stake and others like me who would sell at around 80p+.................

In any case the business is profitable its just not able to generate the growth to keep the share price going up and up and as night becomes day Eric will sell.

[renixus1] 10/11/2016 11:43

Oh hello, we have woken up. Is the business for sale? Does Eric want his entrepreneur's relief? He can always recycle it into something else for the death tax issue.

[ed 123] 09/11/2016 22:57

Ta, Anley. :-)

You may be right with your facts about the company ..... but, your conclusion?

Fwiw, my view is there's almost no chance of a takeover. The reason I say that is Eric Gadsden holds about 28% of the shares. The shares are traded on AIM, so Eric (who is getting on a bit now) won't have to pay inheritance tax. He's not going to sell out now, imo.