Updates & Ideas

Michelmersh Brick - Three “reverse profit warnings” in two years!

May 2024

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.

AIM-listed Michelmersh Brick (market cap: £93m) is a diamond hidden in the rough by the slump in new house building, which in 2023 reduced UK brick consumption by a third to 1.7 billion bricks. I originally made these a front-page write-up in February 2022 after a broker upgrade and, confounding gravity, MBH then delivered two further “trading ahead of” statements; between FY’20-’23, turnover ballooned from £52m to £77.3m, pretax profit from £8m to £13.8m and eps from 6.3p to 11.5p. Almost 80% of new homes built in the UK are made from bricks and over 90% of these are made from clay, which is shaped, dried and fired in a kiln to create a hard and durable product. One effect of the Grenfell Tower fire has been an increase in archit ...

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Coats - Supplier of threads enjoying strong margin growth

Cohort - Shares up 170p in ‘24 after huge contract win

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

Michelmersh (January 2024)

Michelmersh (November 2023)

Michelmersh (May 2023)

Michelmersh - Significantly eps enhancing acquisition (February 2023)

Michelmersh (November 2022)

Michelmersh (June 2022)

Michelmersh Brick - Manufacturer of premium bricks beating expectations (February 2022)

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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