One of the UK’s largest independent brick companies, Michelmersh Brick Holdings, increased its brick sales by 10 per cent in the first half of 2013.
Its brick sales rose by 3m bricks to 36m despite the harsh weather at the start of the year and the closure of its Dunton works.
The firm made a pre tax loss of £2.4m in the first half of 2013, although this figure included exceptional costs of £2.2m for closing Dunton, reorganising its Telford site and restructuring its sales team including some redundancies.
But when these costs were stripped out, its pre tax loss was only slightly larger than the £84,000 loss made in the first half of 2012.
The operating profit for the continuing parts of the business excluding exceptional costs was £376,000, slightly down from £493,000 in the first half of 2012.
The group also said the value of the Dunton site rose by £1.7m and could be used for landfill.
It exchanged contracts for the sale of a 15 acre site adjacent to its Telford brick works for £4.6m with the sale set to complete in the autumn. The firm made several operational changes included in the exceptional costs, such as reconfiguring services, changing access ways and storage yards, in order to facilitate the sale.
The group’s turnover rose from £11.9m to £13.1m between the first halves of 2012 and 2013
The number of bricks it made fell slightly from 35.1 to 34.2 and selling prices remained steady at £347 per thousand bricks.
Eric Gadsden, chairman of Michelmersh Brick Holdings, said there were signs that brick prices would recover but it was difficult to predict exactly when this might occur. Consequently he expected the group to break even for the year if losses from the Dunton factory closing, restructuring and profit on land sale were excluded.
He said: “Based on the trends apparent in the first half, and continuing since, the board expects that the group’s revenues for the year ending 31 December 2013 will meet market expectations due to higher activity levels, but at lower than expected selling prices. While there are early signs of price recovery, due to the difficult early months and continued input cost inflation, the board now considers that this recovery will not be achieved in time to affect the group’s results for this year, and accordingly the group will now break even for the full year, before losses from the discontinued business of Dunton, the exceptional restructuring costs and profit on disposal of land assets.”
The company said the brick industry as a whole had sold surplus stock and housing activity had increased so brick prices would start to rise.