Michelmersh Brick Share Discussion Threads

[alan russell] 01/8/2007 07:33

Weinerberger today announce that they have 98.5% acceptances so presumably MBH have agreed to sell. Can't imagine why they want an EGM, still that's that resolved and I'm relieved that MBH haven't launched on some corporate empire building running up fees going head to head with much bigger companies. So management heads down on running the business, ensuring a modest profit until the sale funds start to flow. MBH share price isn't about to double but it should show a very nice rise over the next 12 to 18 months.

[alan russell] 03/7/2007 15:15

Good grief! The plot thickens.........

[meadow50] 15/6/2007 16:16

I topped up today for the reasons given by Alan R in 125 of 125 and the juicyhousing developments in the pipeline.

[alan russell] 15/6/2007 13:36

So MBH will not offer for Baggeridge. Very wise I reckon. I'm just a bit baffled that the share price has not risen today on the grounds that 1. the Weinerberger offer suggests that brick manufacturing companies are valued higher than the market supposed 2. the danger of MBH bidding rashly for Baggeridge has gone 3. nice cash profit thanks to the 247p offer. I suppose if I was brave I would buy more ...........

I'm no chartist but if ever there was a perfect seris of ascending lows MBH is surely it. Just look at the chart!

[ed 123] 15/6/2007 08:20

Where now for MBH? Take the Wienerberger money? Could cover their costs and leave a few bob profit?

[alan russell] 15/6/2007 07:09

Baggeridge shareholders owe MBH a drink! 247p now the Weinerberger offer.

[alan russell] 21/5/2007 17:36

My oh my! Looks like MBH is going for it. Another 2.3M Baggeridge shares bought at 225p - now hold 23%. No point paying 5p more than the offer unless they're going to bid. Baggies price up tomorrow and MBH down no doubt.

[alan russell] 03/5/2007 08:23

03 May 2007
Michelmersh Brick Holdings plc
AGM Statement

Michelmersh Brick Holdings plc ("Michelmersh" or "the Group") (AIM: MBH) the
UK's largest producer of handmade specification bricks and clay paviors,
announces that at its Annual General Meeting to be held later today, Thursday, 3
May 2007, Eric Gadsden, chairman of Michelmersh, will make the following
statement:

"I am pleased to report that we are continuing to make excellent progress this
year. We see a marked improvement in the high quality end of the market and are
experiencing strong demand for our products across all the Group companies. This
has translated into sales for the first four months of the year being 17% ahead
of last year's figures for the same period.

Additionally, energy costs have stabilised at significantly lower levels than
last year and we are also now benefiting from the production efficiencies that
have been gained as a result of the recently completed capital investment
programme we made in our plant. We continue to run our plants at full output and
sales are now starting to match these production levels.

Progress on the planning application for residential development of 60 acres of
land at Telford in partnership with Persimmon Homes continues. We anticipate
this will be submitted in the near future and that, as detailed at the time of
our 2006 results, will result in the Group receiving significant cash income
from the project in 2008 and 2009.

In early April the Competition Commission provisionally cleared the proposed
acquisition of Baggeridge Brick by Wienerberger. We subsequently acquired a
17.4% interest in Baggeridge Brick and are currently considering our options in
this regard.

Following approval at the AGM, the Company's maintained dividend of 1.1 pence
per share will be paid to shareholders on the register as at 5 October 2007, on
31 October, reflecting our continued confidence in the Group's performance going
forward."

[ed 123] 17/4/2007 10:08

In play? .......... Eric Gadsden controls MBH.

[wcjan25] 17/4/2007 09:04

so have they played this very cute (let someone else take all the costs/risks of the competition panel saying no to baggeridge being bought)... or are they very late to the game?

bizarre. makes you wonder if mbh could end up in play too though

[alan russell] 17/4/2007 08:41

So MBH now owns 17% of Baggeridge and is considering its options which may or may not lead to a bid for Baggeridge. Very interesting. Over ambitious or confidence in its business and assets?

[alan russell] 06/4/2007 11:17

I am not surprised that the takeover has been allowed; in an ailing industry with demand falling there was not much choice.

I found the results somewhat disappointing; I had expected a reasonable profit. I also have to say I regard the tone of some of the comments disingenuous. Last year's results announcement heavily emphasised the change in year end resulting in a 13 month year bringing in an extra December – a short production and sales month resulting in a one-off £535,000 hit, shareholders were told. So this year all things being equal there should have been a £535,000 comparable benefit. 'fraid not gov' and no mention of last year's one-off hit. Instead we are told that the results "compare favourably" with last year. No they don't.

The RNS notes that the plant is now running at full capacity. This may bring benefit but I suspect it will be minimal. A slight reduction in unit cost is welcome but in a market where demand is falling below supply increasing output provides no solution.

I doubt if the Baggeridge takeover will lead to the increase in prices that the management seem to anticipate. There is little pricing power in the industry.

As I see the big picture, brick making for the near future is likely to be just a matter of breaking even or a minimal profit at best. Only a marked and sustained reduction in energy costs will help, resulting in initially lower prices leading to increased demand leading to full capacity leading to modest price increases. So holding MBH becomes in effect a long term wait for the land to gradually be sold as it becomes worked out. OK that may prove lucrative and there is no better asset than land. However I dislike a situation where the basic business holding an asset is unable to make a worthwhile profit. If trading worsens, for example energy prices rise again and stay high, the proceeds of the land sales may have to be used to plug the losses with no real return to shareholders.

The one ray of sunshine was the low cost of preparing the land for sale which was less than I expected. Granted I had deliberately erred on the pessimistic side in my guesstimate but £155,000 (assuming that is what the Tangible Fixed Assets item largely refers to) is pleasingly low. OK there may be much more to be spent this year but the net sale proceeds now look like being well in excess of £1M per acre. Good news for cashflow (again I was too pessimistic – not the worst fault in an investor) and bodes well for the ongoing sales at Telford.

I will hold for the time being. Provided trade does not worsen over this year, by this time next year the market will be anticipating receipt of the land sale monies and the share price may move modestly higher.

[wcjan25] 04/4/2007 09:38

baggeridge buy-out gets ok...good news for mbh,but no reaction on sp

[wcjan25] 29/3/2007 11:15

nothing exciting indeed alan, but the results are solid at least

edit: the business continues to be valued by the market at a discount to net asset value

[alan russell] 26/3/2007 22:39

Thanks for your comments wc & also for that link to the planning application.

It will be interesting to see the results tomorrow. I am not anticipating anything exciting, indeed with the money spent last year (& this) preparing the Telford site cash flow may well be -ve. Probably closer to the end of the year before the price starts to climb.

[wcjan25] 23/3/2007 11:58

alan. the answer would appear to be no- they have a big planning application to extract more clay at the plant, which seems to suggest that they are staying (although one person i was with suggested they are hoping the planning application is rejected so they can offshore!)

on the way to the plant, in the very near vicinity, there were 3 or 4 houses on the market - i checked them out online and the valuations are unreal - one tiny bungalow for over 420k just because it has the land to build 2 properties on... must make the mbh site/land an absolute goldmine. i tend to think personally it makes them a likely takeover candidate for asset-strippers.

tour was pretty mundane, didn't find out a huge amount. it seemed quiet, but the process is shift-based i think and there are some restrictions (noise - it is a residential area - there is even a big posh house literally on top of the site!) about what they can do at what time and i got the impression that the twilight shift is skeleton

not a lot of stock around. one of the guys told me that there were some building restrictions introduced recently in the local hampshire area that are supporting the use of the bricks... and there is a lot of home improvement (extension etc) going on. seems that the tiles are a big growing area too.

so quite a bullish thing overall

in case you're interested by the way, they said they welcome visitors anytime and will arrange a tour etc. if you phone in advance. also the investment/expansion plans are on display here:

[alan russell] 08/3/2007 12:46

I expect the reply will be no but I'd be interested to hear. It would be interesting to know if they are running at full capacity (as well as asking - workers as well as management - keep your eyes open for unused kilns etc) and if they are selling all they produce or are stockpiling. Good luck.

[wcjan25] 08/3/2007 12:23

going to the michelmersh open day and factory tour next week
going to ask them if they are planning to off-shore and sell the expensive land

[alan russell] 16/1/2007 23:05

The price has been drifting up although with low volume. Due another little run perhaps? The background (lower energy costs and housebuilding holding firm) gives some cause for encouragement. I am keen to bolster holdings with land assets so have topped up today. Time will tell.

[g1ll1s] 20/10/2006 12:57

must be the rose tinted glasses

[sawbones] 18/10/2006 12:30

I wonder why I just get a red screen then......

[ed 123] 18/10/2006 12:26

Trading nicely, thank you. Energy costs coming down and major housebuilders trying to raise volumes.

The Company's web site is also working well.

[sawbones] 18/10/2006 12:03

Does anyone have info on this company as their website just shows a red screen! Are they still trading?