Updates

Michelmersh - Significantly eps enhancing acquisition

February 2023

Investing in shares may lose you all or some of your money. Past performance is no indication of future performance. Some of the shares recommended here may be small company shares, which can be relatively illiquid and hard to trade and this makes such shares more risky than other investments.

Shares in brick manufacturer Michelmersh leapt after it said trading is running ahead of expectations while the outlook remains positive with a strong and well-balanced order book. The group has also put its cash to good use and has acquired Fabspeed, a leading UK brick fabricator and manufacturer of off-site pre-built brick products, for an initial £6.25m, representing 5.3x 2021 EBITDA. The deal is said to be “accretive to earnings” in its first full year before any synergies that should come through cross-selling and distribution efficiencies. Canaccord says it “broadens the product portfolio in a new and growing adjacent market” and has upgraded eps forecasts 12%/20%/21% to 10.1p, 10.4p and 10.7p in the three years e ...

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