Michelmersh reports 12.8% jump in brick prices

Grant Prior 8 years ago
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Manufacturer Michelmersh saw brick prices rise by 12.8% during the first half of the year as stocks hits their lowest level in living memory.

The firm actually sold fewer bricks during the six months to June 30 2014 compared to last time.

But a rise in prices helped pre-tax profit recover to £1.3m from a £300,000 loss on turnover up to £13.6m from £12.6m.

Michelmersh sold 34m bricks during the first half of this year at an average selling price of £387 per thousand compared to 35.2m at £343 per thousand in 2013.

Chairman Eric Gadsen said: “The UK construction industry continues to recover from very low activity levels as the economy slowly heals, but more importantly we believe cross party political impetus for new housing will be maintained.

“The Brick industry is benefiting from rising demand and we have now seen for the first time since 2008 signs of increased national brick prices with stocks at their lowest level in living memory.

“In the first half of 2014, the Group has achieved average price increases of 12.8 % over the equivalent period in 2013.

“If we maintain this performance, which seems likely in the current construction climate, the profit before taxation for the year to 31 December 2014 will exceed current market expectations.

“Capacity in the industry is largely fixed and can only be increased through significant investment and the availability of appropriate consented mineral reserves, which requires long term planning.

“Margins are still not at a level where the industry is enjoying normalised levels of return on capital such that there is adequate return for new investment in this vital industry.

“Brick manufacturing in the UK is in a state of flux as a result of the forces created by the long awaited reduction in national stocks, now at historic low levels, and improvement in demand against the backdrop of long-term under investment in the industry.”

 

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