Michelmersh Brick Share Discussion Threads

[gutterhead] 19/11/2013 18:58

Hi. David

I do agree with the sentiment and logic, who wouldn't?

I would have bought more at 45p and dare say there are many who own shares over that price who will be very annoyed.

All that said, I can still see this share returning to 2006 levels sometime next year and the fundraising could help accelerate this

Good luck

Gh

[puffintickler] 19/11/2013 15:11

I'm with you on all that David!

[gutterhead] 19/11/2013 08:11

Going places

Michelmersh Brick Holdings PLC

19 November 2013

19 November 2013

Michelmersh Brick Holdings PLC ("MBH" or the "Company")

Placing to raise GBP10.0 million

Michelmersh Brick Holdings PLC (AIM: MBH), the specialist brick manufacturer and landfill company, today announces that it has successfully raised GBP10 million by the placing of 22,222,222 Ordinary Shares at the Placing Price of 45 pence per share.

Highlights

-- The proceeds of the placing will be used, in part, to help increase the saleable output of the Company's Freshfield Lane brickworks by up to a further 6 million units per annum through targeted capital investment of up to GBP2.5 million

-- Freshfield Lane currently produces a range of traditional clamp fired machine and handmade stock bricks at a maximum saleable output of approximately 30 million units per annum. Therefore to increase the output the Company will use the proceeds to:

- purchase new equipment
- maximise the existing building space and redundant plant and equipment
- acquire and recondition used plant and equipment from within the European brick industry
-- The Placing proceeds will enable the Company to take advantage of the positive brick market background, as it sees average brick selling prices increasing, making the investment into Freshfield Lane very timely

-- The Company will use the remainder of the net proceeds to reduce its overall gearing, for general working capital purposes and look for acquisition opportunities as and when appropriate.

Commenting on the Placing, Martin Warner, Michelmersh Brick Holdings' Chief Executive, said: "The success of today's Placing demonstrates the clear recognition and support by both existing and new shareholders of the potential of Michelmersh to deliver strong capital returns to our investors. Investment in Freshfield Lane will boost significantly our potential.

"The Placing was significantly over subscribed further emphasising increased confidence in the improving brick market conditions and we would like to thank our existing investors for their support as well as welcoming new institutions to the shareholder register."

[gutterhead] 02/11/2013 12:15

Not so sure of a Psm deal but you can see this sector consolidating and I think mb has worth more to a competitor than it is to a builder. Either way I really think this company has a lot more value than currently in its share price

[gutterhead] 29/10/2013 21:26

Yes I agree, it's holding well even on low volumes. Have a look at the fundamentals pre housing crash. Judging by the sector, this has some catching up to do. Are you a holder?

[alanrussell] 29/10/2013 14:05

What is very noticeable is that the flat or down days have been on very low volumes traded while the up days have seen much greater volumes. The On Balance Volume chart has been very strong for the last two months underlining that the price increase reflects significant real buying. Very encouraging, who knows we may one day hear of the PSM deal.

[gutterhead] 22/10/2013 16:07

I cant believe more are not following this share

if you missed out on share house builder growth, this is next in food chain and has a lot of growth left

dyor

[gutterhead] 17/10/2013 19:49

See today's announcement ref land sale and AiM admission

Both positive with notes ref recovery from improvement in brick pricing due to market shortage.

This share is still half of its 2006 value but fundamentals are better.

Any easing of share price should be a good opportunity IMO.

[gutterhead] 14/9/2013 16:52

Massive shortage of bricks in the market. Building companies desperate to take advantage of govt house buying incentives. This share was 1.30 in 2006 with similar fundamentals, cash, net assets etc and is now without a loss making arm. All looks good to me dyor
Gh

[puffintickler] 05/9/2013 13:24

I agree with Shanklin, the results were a bit of a downer and I can see the share price drifting off after today's excitement, unless there is some news we don't know about of course. I have sold out for now but not for ever!

[boystown] 05/9/2013 10:18

Well, my best guess would be that a year or so from no, the shares will be trading at more like 50p and the NAV will be around 63pps - and even that will still be too cheap IMO.

[shanklin] 05/9/2013 10:10

I cannot say I was too impressed with all the exceptional charges flagged up in the H1 results, particularly the ones at Telford which must have been known about for ages... ...plus the absence of any pricing power on the brick front, squeezing margins.

However, this big a discount to TBV does seem a bit excessive.

I have sold down what was a large position for me in MBH due to the above, but hopefully my ongoing holding will do OK.

[davidosh] 05/9/2013 09:49

Boystown....there has been considerable demand for the shares since release of the results and very healthy volumes of shares traded so clearly a number of investors agree or someone is building a considerable interest here. Maybe that NAV and the land assets are attracting interest.

[boystown] 05/9/2013 09:41

Well done on your profit Arthur_Lame_Stocks but FWIW, I take a completely opposing view, which is what makes a market of course.

Personally, I think that with the real value of their land holdings greater than that stated in the accounts, in practice, and the operational (bricks - landfill) parts of the business trading profitably as we come out of a recession in building works etc., there's not much of a reason for the shares to trade at ANY discount to the 60p NAV - a NAV which I also think will keep rising.

[arthur_lame_stocks] 04/9/2013 19:55

I sold the last of my MBH for a small profit. I thought the results were disappointing and any more realisations from land assets are years away so I think there'll be another opportunity to buy in.

[warranty] 04/9/2013 19:16

I think we have to remember the huge stockpile of bricks held after the crunch and with little construction activity it's probably take a long time to get rid of them. But with things now picking up and a bit of confidence returning we should see prices rising accordingly. The other exciting areas for me with MBH are the landfill and planning permission for used sites which should add a bit of cash to the party. If construction really does take off and especially in the S East where prices will be higher it may encourage builders to go for quality bricks rather then just standard. Of course if it's just another false dawn then all bets are off but I still think MBH looks a good long term bet if you can hold for 5 years or more.

[cjohn] 04/9/2013 17:24

Thanks Warranfy. I'm certainly keeping an eye on MBH. Really it's the slowness of realisation of assets that's put me off.


And when will brick prices keep up with inflation and higher costs?

A constant round of restructurings here seem to keep them perpetually making headline losses.

I'd agree overall with your sentiments, though.

[warranty] 02/9/2013 13:37

Well done on your profit CJ never a bad thing to take one and hopefully we'll both get a chance to buy again in the low 30p's although I think much of the pain may be behind MBH now, rather depends on the market I suppose.

[cjohn] 02/9/2013 08:38

A disappointing update from MBH. Cost increases producing an operating loss, in spite of revenue improvements. Assets sales less lucrative than foreshadowed, due to tax and site clearance costs.


SO I'm taking profits. I bought in (several times) earlier in the year at prices between 20 to 25p, so I'm happy.

regards to all.

[alanrussell] 08/8/2013 08:26

Well, "price-catch-up" is one way to look at it. Another is that builders are learning to do without brick, there are cheaper, quicker ways of building a wall. That's certainly true at the budget end of the market, hopefully MBH are relatively unaffected although it may drive volume brickmakers to target the upper end of the market.

Either way recent RNS and share price action gives reason to hope things are improving. Finger crossed for the results and PSM deal.

[cjohn] 08/8/2013 08:13

Thanks Stuart for your informative posting.

[shanklin] 24/7/2013 07:57

When I spoke with Martin Warner a year or two back he commented that bricks were the only component of housebuilding that had not increased in price for many years with every other aspect having incurred considerable prce inflation. There is a lot of catching up to take place on the brick price front.

[hastings] 23/7/2013 17:38

Thanks Stuart, good post.