Last checked at 18 Sep 2008 14:53
18 September 2008
Michelmersh Brick Holdings plc
("Michelmersh" or the "Group")
Trading Update and Notice of Interim Results
Michelmersh Brick Holdings plc (AIM:MBH), the specialist brick, land development and landfill company, will report interim results for the six months to 30 June 2008, on 29 September 2008.
The results for the first half are expected to be satisfactory, although the impact of increased energy costs and a weakening market will mean that earnings for the period will be lower than anticipated and will result in a reduced operating profit.
The prospects for the brick trading business are dependent on the ability to recover these increased energy costs in 2009 by passing on these higher costs through a price increase on all products, which is being implemented on 1 October 2008. The Company will, if necessary, seek to implement a further increase in Spring 2009.
The sharp deterioration in the economy in the past few weeks means there remains considerable uncertainty in the future. This uncertainty is being further fuelled by the withdrawal of credit insurance available to our suppliers and customers
There is currently no indication of what will trigger a return to normal levels of business. We have therefore implemented a consultation process with employees at three of our works to ensure that production can be reduced, if necessary, to match demand for the forthcoming period.
In these circumstances the structure of the Group is under review. The brick making operations have a key market position in the UK and in view of the substantial investment made over the last few years the board anticipates that there will be no need for further significant capital expenditure over the forthcoming period.
At the same time the 16 acres of land at Telford will be ready for construction in the middle of next year. All preparatory work has been completed.
The Board is exploring various opportunities to exploit Michelmersh's position in the UK brick manufacturing industry and to achieve full value from its land fill operations and property assets. The Board is therefore considering the appropriate corporate structure for the Group given the prevailing market conditions, while also enabling the Board to take advantage of opportunities that arise as a result of these conditions. The Board will update shareholders further at the time of the interim results.
| For further information: | |
| Martin Warner Michelmersh Brick Holdings plc | 01442 870 227 |
| Russell Cook / Carl Homes Charles Stanley Securities (Nominated Adviser) | 020 7149 6000 |
| Jeremy Carey / Paul Youens Tavistock Communications | 020 7920 3150 |