Michelmersh Brick – 32.5p

25 March 2013 – final results

Annual results for 2012 have revealed a slight increase in revenues to £24.5m (2011: £24.3m) although pressure on margins led to a fall in pre-tax profits to £51k (2011: £530k).  A large tax credit in 2011 meant that earnings per share fell t0 0.02p (2011: 2.60p).  Strong cash flow, however, meant that net debt fell to £18.4m (2011: £19.8m) as the group looks to pay down its debt.  Net assets per share rose to 61p (2011: 59.7p).  In February, the group obtained planning consent for 185 houses on its redundant factory land at Telford and a sale of this land has been agreed in principle.  It is expected that the company will exchange contracts with a major housebuilder shortly.  Trading conditions continue to be difficult but the group is seeing encouraging signs of growth from major housebuilders.  Overall brick stocks stand at only half the level of 2008 and the group is well-placed to benefit from any upturn in demand.  The shares have done well in recent months but we believe that there is further to go.  LONG TERM BUY.

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