Michelmersh Brick Share Discussion Threads

[ganthorpe] 17/8/2012 18:01

Last year there was a Trading Statement on 9 August. No sign of one this year. There doesn't seem to be any news of the Persimmon arbitration or the new planning application.Both seem to be overdue?
The weather since the last IMS in May has not been great either.
It looks like we may have to wait till the results end September to get any news.
I think it may be time for me to buy a few more.
GAN

[shanklin] 23/7/2012 16:12

If anybody has sold recently, it would be interesting to hear why.

AIUI, MBH is still trading profitably and all its land assets still exist.

[ed 123] 14/5/2012 09:52

Thanks, Shanklin. :-)

I'm still getting, "This feature is currently unavailable." from T&W.

My thinking is that the first two land sales should take the borrowing down to a more sustainable level. (I may yet be surprised on the upside - we'll see.) I don't see them getting enough money anytime soon to fund a significant cash acquisition. Also, I doubt they would want to increase their borrowings. However, they may do a deal to buy a private business, issuing more MBH shares for consideration.

The asset backing is enough security for their bankers, who will be pleased to receive the usual interest + fees. I (as all) would like to see the shareholders benefiting from the operational performance, not the bankers. However, times are very difficult and Persimmon have made matters difficult for MBH.

I think MBH could be a good investment from here taking a 3 year view. However, I'm sitting on my hands for now - influenced by wider uncertainties (Eurozone).

[shanklin] 14/5/2012 09:18

Ed

To find the planning applications go to

https://secure.telford.gov.uk/planning/search-all.aspx

Then:
- select the "Search planning by details" tab
- Enter "01-04-2012" in the "Date from" field and "Warner" in the "Applicant name" field

Two applications are returned, one of which relates to 185 dwellings.

In terms of funding an acquisition, I understand they now have a very good relationship with Barclays. They should hopefully get money from land sales in due course.

[ed 123] 14/5/2012 08:40

Happy Birthday!

I'd guess maybe another month to get the value of the land with the Persimmon option. So, in your terms, maybe another four oxygen cylinder refills. ;-)

They keep saying they may participate in consolidation by acquisition. Without a massive dilution, I don't see how.

Anyone know how big the latest land for pp is? T&W planning website is under development.

MM's are unsure also. 12% spread. Also 3 on offer, 1 on bid.

I'm not holding atm. May get back in when things become clearer. If positive news there could a good step up in the share price. Still got its asset backing.

[alanrussell] 14/5/2012 08:25

It was my birthday over the weekend. I'm getting on a bit and wonder if I will live to see a resolution to the Persimmon saga.

[gingerplant] 14/5/2012 08:01

Mixed AGM statement today, but the bit we're waiting for is in bold:

"Trading results for the first quarter of 2012 have been satisfactory, in what is historically the build up to the Company's main trading period during the summer months. Following encouraging activity in January, bad weather in February resulted in lower than expected sales volume for the three month period, also being lower than the corresponding period in the previous year. However, due to operating efficiencies and a strong contribution from land fill activities, the overall outcome for the quarter is in line with management expectations.

"The first quarter has also seen progress with the Group's ancillary property assets. The arbitration process to determine the value of the Persimmon option land at Telford has completed a number of phases and a final conclusion is expected shortly. In the meantime, we have submitted planning on the surplus factory land, also at Telford, which is unencumbered by option, and are developing a strategy to realise the asset."

See:

[ed 123] 27/4/2012 18:24

No problem, Judgement. :-)

Net assets per share were reported as 60p, so strong backing. That was after a revaluation hit of £6 million in 2011. The price they get from Persimmon (or whoever) is important. After negotiating for so long, presumably they should have the correct value in their books now.

[judgement] 27/4/2012 18:11

Ah, yes you're right, I was just looking at current liabilities.
Debt down from £21.69m to £19.81m. Heading in the right direction, but certainly in no position to debt fund a large acquisition. Probably why they've been talking about it for so long without action.

[ed 123] 27/4/2012 17:29

Shanklin,

I've not seen the detail of the agreement with Persimmon, so can only comment in general terms. Has it been published?

Persimmon are well versed in situations such as this. I've no doubt they will play it to their own advantage, as far as they are able.

MBH is more or less treading water atm, due to debt. It needs to sell at least some of its surplus land.

[ed 123] 27/4/2012 17:18

Judgement.

The net debt at the end of 2011 was reported by the Company as being £19.8 million. (See Preliminary Results, published on 26 March 2012.)

[judgement] 27/4/2012 15:55

Ed, they don't seem to be doing too badly on borrowings. At the end of 2010 they had interest bearing loans of £18.9m. By the end of 2011 this was down to £8.8m at L+4.

[shanklin] 27/4/2012 15:19

If PSN don't accept the price defined by the independent assessor, they will have to write off all their costs to date in getting planning permission. MBH would also then be able to sell it to any other interested parties.

[ed 123] 27/4/2012 14:41

Thanks, stuart little. :-)

MBH needs to get its borrowings down first, imho.

Maybe they're close to the deal with Persimmon, to provide some fresh cash? The problem is that MBH need to sell that land but PSN has a massive landbank (equivalent to several years output) and doesn't therefore need to buy it.

I rememeber when MBH traded above 100p with a NAV above that.

MBH's business looks to be going well, but the market for bricks is weak and their borrowings are too high. Frustrating for holders.

[stuart little] 27/4/2012 14:20

I've been hearing strong rumours in the industry about MBH buying a couple of factories off Hanson. Namely Wilnecote and Measham. Both will fit into MBH's portfolio as 'high end' bricks rather than the 'house builder' factories.

Measham is a fairly new works which cost Hanson £50m to build. It produces a 'soft mud' type brick. With it being a new state of the art factory it is very economical and environmentaly friendly.

I'm not sure how MBH would fund such a deal but it is no secret that Hanson are looking to offload factories.

Like I said all rumours so no advice intended.....

stuart.

[shanklin] 23/4/2012 16:30

Indeed. Presumably PSN are 99.9% responsible for making this whole process as painful and long-winded as possible as they try to avoid buying a fair price for the land. All only IMHO of course.

[davidosh] 23/4/2012 16:14

Progress at last. Still nothing on the Persimmon arbitration though ?

[shanklin] 23/4/2012 16:06

My weekly check of planning applications on the Telford & Wrekin Council web-site has turned up a few new ones that relate to MBH, in particular:

https://secure.telford.gov.uk/planning/pa-applicationsummary.aspx?applicationnumber=TA/2012/0399
https://secure.telford.gov.uk/planning/pa-applicationsummary.aspx?applicationnumber=TA/2012/0400
https://secure.telford.gov.uk/planning/pa-applicationsummary.aspx?applicationnumber=TA/2012/0413
https://secure.telford.gov.uk/planning/pa-applicationsummary.aspx?applicationnumber=TA/2012/0414

All of these were submitted on or after 16-Apr-12 and give the applicant's name as Martin Warner.

[cjohn] 28/3/2012 19:07

It's time limited - like an option. Seems eternal though.

[gingerplant] 26/3/2012 19:19

I thought they'd gone to some form of arbitration to reach a deal??

[envirovision] 26/3/2012 12:18

Yes exactly what I was thinking, just why an earth is it taking so long ? I would have thought that would have started long ago, is there no demand for homes at all there ? Results are pleasing though and give a hint of the future potential if the economy pulls through.

[davidosh] 26/3/2012 11:30

That Persimmon resolution seems to just drag on forever. The indication was at least a year ago that it was near a settlement. Whoever created the terms of the land development deal and agreed it for MBH did not do a very good job ?

[alanrussell] 26/3/2012 10:31

£1.3M profit with £800,000 paid in interest. If MBH can obtain planning approval for 170+ units over the next couple of years and sell, together with an upfront tranche from a sale to Persimmon, interest could fall significantly. Profits could be say £1.8M which makes the present cap of £15M look decent value. Of course it is unlikely to work out like that as further acquisitons are probable. Still, it's a decent backdrop to further progress. On the other hand the economy could tank, housebuilding shrink and MBH end up in diffs........... anything's possible.

[cjohn] 26/3/2012 10:00

Final results are good from a trading point of view, with increased gross margins and brick selling prices. EPS after exceptionals at 2.6p with improving perfromance throughout year.

Once, the Persimmon development reaches maturity, there should be progress on the share price front!