Michelmersh Brick Holdings – last year this group met challenging conditions, results are due next week. This year will see a big recovery bounce, its shares are cheap at 102p against brokers 170p TP

19.03.2025

Watch out next Tuesday morning, 25th March, for the 2024 results from Michelmersh Brick Holdings (LON:MBH), the group that produces some of Britain’s premium clay products.

The group declares that:

“We are Britain’s Brick Specialists, leaders of traditional hand-pressed architectural terra cotta and Europe’s trusted clay brick manufacturer.”

It’s timelessly authentic, warm, earthy, natural bricks are said to give character to any build.

The Business

Michelmersh Brick is a business with seven market leading brands: Blockleys, Carlton, FabSpeed, Freshfield Lane, Michelmersh, Floren.be and Hathern Terra Cotta.

These divisions operate within a fully integrated business, combining the production of premium, precision-made bricks, pavers, special shaped bricks, bespoke Terra Cotta products and prefabricated brick components.

The group also includes a landfill operator, New Acres Limited, and seeks to develop future landfill and development opportunities on ancillary land assets.

Established in 1997, the company has grown through acquisition and organic growth into a profitable and asset-rich business, producing over 125m clay bricks and pavers per annum.

Michelmersh currently owns most of the UK's premium manufacturing brick brands and is a leading specification brick and clay paving manufacturer.

The Equity

There are some 95.9m shares in issue.

The larger holders include Interactive Investor Services (7.23%), Hargreaves Lansdown Asset Management (5.15%), BennBridge (5.01%), Hosking Partners (4.38%), Australian Retirement Trust (3.93%), Evelyn Partners Investment Management (3.85%), Sanford DeLand Asset Management (2.71%), Canaccord Genuity Wealth (2.40%), Fiske (1.08%), and Rathbones Investment Management (0.84%).

What The Brokers Say

Analyst James Wood, at Canaccord Genuity Capital Markets, has a Buy rating on the group’s shares, with a 170p Target Price.

For the year to end-December 2024 he estimates that the group saw a drop in its sales to £72.5m (£77.3m), with its adjusted pre-tax profits easing to £9.7m (£13.8m). reducing its earnings to 7.7p (11.5p) per share but actually increasing its dividend to 4.8p (4.5p).

For this year now underway he sees £82.0m revenues pushing the group back up to £13.0m pre-tax profits, with earnings of 10.3p and a further increased dividend of 5.0p per share.

The 2026 year, Wood estimates, could see £86.0m turnover, £14.7m profits, 11.7p of earnings and paying a 5.2p dividend.

Also, with a 170p a share Target Price, is Robert Chantry at Berenberg, also rating the shares as a Buy.

For 2024 his sales estimates are for £71.0m, with EBIT of £11.0m, 8.4p earnings and a 4.8p dividend.

This year he goes for £76.0m sales, £12.0m EBIT, 9.8p earnings and a 5.0p a share dividend.

By the end of 2026 Chantry looks for £80.0m sales, £14.0m EBIT, 11.2p earnings and a dividend of 5.3p.

Over at Investec, its analysts Aynsley Lammin and Lewis Roxburgh have a very much more cautious Target Price of 115p a share.

For this year they have £75.3m sales, £10.7m normalised profits, worth 9.4p in earnings and paying a 4.8p dividend.

2026 they see with £78.8m sales, £11.4m profits, 9.9p earnings and a 5.0p per share dividend.

In My View

The group is in good shape and its Management, having coped with the weak markets in 2024, is now concentrating on a bounce-back this year and next.

The shares of Michelmersh Brick, at just 102p, offer some attractive upside, especially if next week the group shows confidence in its current year recovery.