![Diversification: Michelmersh sells bricks to numerous sectors, including top school Eton](https://i.dailymail.co.uk/1s/2024/03/30/15/83061943-13254935-image-a-60_1711810904909.jpg)
Diversification: Michelmersh sells bricks to numerous sectors, including top school Eton
Brickmakers have suffered from property market woes. In most years, the UK uses around two billion bricks made domestically.
Last year, weak demand sent that figure tumbling by a third to 1.35 billion. Large companies are feeling the pain. Results are sharply down and they are worried about the months ahead.
Michelmersh Brick Holdings is different. Last week, the company unveiled an increase in sales and profits, a 6 per cent rise in the dividend and an expression of confidence in the future.
Unlike some in the sector, Michelmersh sells bricks into numerous sectors.
Positioned as a top-quality supplier, the group’s customers include breweries, churches, plush offices and award-winning sites, such as the Black Country Living Museum in the West Midlands and the International Rugby Experience in Lancashire.
Eton School uses Michelmersh bricks, Claridge’s uses them, too, as do many top housing developments.
Although it produces 125 million bricks annually the group is smaller than many rivals, which allows it to adapt faster to changing conditions, and chief executive Peter Sharp understands the importance of service, making sure products look good, arrive on time and leave customers happy.
Sharp has been in the brick industry for nearly 35 years and spent the past eight running Michelmersh with fellow long-term brickie Frank Hanna.
Hanna is leaving for pastures new but Sharp is regarded as a steady hand on the tiller, well able to steer Michelmersh alone.
Brokers are looking for sales of £82million, profits of £13.4million and a 4.5p dividend this year, with solid growth forecast for 2025.
Midas verdict: Midas recommended Michelmersh in 2015, when they were 70.5p. Today, they are £1.04, testament to the group’s resilience. There is plenty of room for further gains, however, making the shares attractive to new and existing investors.
Traded on: Aim Ticker: MBH Contact: mbhplc.co.uk or 0844 931 0022