Brickmaker Michelmersh confirms falling output will dent full year performance
BRICK manufacturer Michelmersh has reaffirmed predictions that its financial performance for 2016 will be similar to that of the previous year.
Michelmersh, which owns Telford-based Blockleys, said last October that it was revising down its full year performance after average selling prices failed to live up to expectations.
In its Q3 trading update last year, the group said that the UK brick market had seen falling output and a small increase in despatch volumes as manufacturers responded to market demand.
In a trading update today the company confirmed its previous expectations, although it said cash generation had been strong and that year-end cash balances would exceed forecasts.
Partly to deflect attention away from the headline performance, the group also announced that it had exchanged contracts for the sale of the 25-acre former Dunton Brothers brickworks at Chesham in Buckinghamshire, for a total of £2.68m in cash, to London Green Resources.
Subject to approval from the Environment Agency, completion will take place within 10 days of the Landfill Permit transfer, which given current guidelines, is likely to be towards the end of H1 2017. The net proceeds of the deal will be added to the group’s cash reserves.
The group’s audited accounts for the year ended December 31, 2015 included this plot of land in fixed assets as a landfill asset at a value of £1.25m and, after costs, the expected surplus on sale will exceed £1m. The asset will be disclosed in the accounts to December 31, 2016 as a current asset for resale at the expected net realisable value. The uplift in value, from the 2015 value to net realisable value, will be credited to revaluation reserves in the group’s financial statements for the year ended December 31, 2016.
The Michelmersh board expects to release its preliminary results for the year to December 31, 2016 on March 20.
