Updates

Michelmersh

June 2022

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.

Brick manufacturer Michelmersh said results were slightly ahead of expectations with revenue up 14.4% to £59.5m and EBITDA increasing 20% to £14.7m, with EBITDA margins rising 1.1% to 24.7%. The dividend was 3.65p while net cash was £7.7m (forecast: £6m). Impressively, despite cost inflation in the supply chain, it’s held its gross margin at around 40% thanks to hedging energy and price increases. Management confirmed a good start to 2022 and the group looks forward to “continued growth” with market conditions remaining highly supportive amid continuing demand for housing and construction. Canaccord forecasts £10.5m pretax profit and eps of 9.0p. I’m continuing to hold. ...

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Michelmersh - Dividend yield 4.9% and NAV per share of 98p suggest material under-valuation (October 2024)

Michelmersh Brick - Three “reverse profit warnings” in two years! (May 2024)

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With small companies there is an above average degree of risk compared to buying blue chips. Please be aware that we have not assessed the suitability of any of these investments for you. The newsletter simply states a personal view and diarises the editor’s investment decisions. Please speak to your stockbroker or other qualified individual to ascertain whether any of these companies mentioned would form useful additions to your own portfolios. Past performance is no indication of future success.

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