MBH24 Sep 2012 08:40
Commenting on the results, Eric Gadsden, Chairman of Michelmersh Brick Holdings, said: "Our business model has been based for some time now on a flat market, focused on the South East of England, with funding constraining demand despite the many Government initiatives to attempt to arrest these conditions. We can survive in these conditions and will thrive when conditions improve.
"The Board now expects that while the Group's revenues for the year ending 31 December 2012 will be marginally below market expectations, the Group's profit before tax is likely to be significantly below market expectations as the shortfall encountered in H1 will not be recovered in the second half and therefore the Board expects the Company only to break even for the full year. The contribution from landfill is also expected to be below expectations. Although sales prices and income from carbon surpluses are usually stronger in the second half of the financial year, economic conditions do not suggest this will be the case in 2012. In addition, higher than anticipated interest costs will arise following the delay in receipt of the expected cash proceeds of the land disposed under the Persimmon option. Despite the difficult trading conditions, positive trading cash flow and proceeds of future land asset sales will mean that the Group will continue to develop the business while seeking opportunities for growth.
"Our unique product range, efficient works and sales structure, together with our land assets give us a resilient position in challenging times. Our main focus for the remainder of this year and for 2013 is to develop our premium position in the brick market and to bring to fruition the work done over a number of years to conclude our Telford land sales.
"We continue to closely watch developments in our industry and believe that however they play out, we will benefit in a market place which is stable or shows some modest element of growth."