Grant of Planning Permission

RNS Number : 2740G

Michelmersh Brick Holdings PLC

28 January 2010

 



28 January 2010

Michelmersh Brick Holdings plc

("Michelmersh", the "Group" or the "Company")

Grant of Planning Permission at Telford

Trading Update

Grant of Planning Permission 

Michelmersh Brick Holdings plc (AIM: MBH), the specialist brick, land development and landfill company, is pleased to announce that planning permission has been granted by Telford & Wrekin Council for the construction of 170 houses on 16 acres of development land at the Company's site at Hadley, Telford. This constitutes the first phase of the development of 90 acres over the next 10 years in partnership with Persimmon Homes plc.

Persimmon have already made a significant investment in the long term planning of this development and Michelmersh have completed the necessary ground engineering works to enable development of this first phase to commence immediately.  

Trading Update

Trading across the Group remains satisfactory in what are extremely challenging market conditions and the Board anticipates that the results for the year to 31 December 2009 will be in line with current market expectations.

The Company confirms that it is proposing to reduce production capacity at the Blockleys site, focusing production on its higher-value products, and in particular its award winning pavior product range. Michelmersh is one of only two specialist pavior manufacturers in the UK.  The Board anticipates that this restructuring will generate significant operational efficiencies, improve the Group's working capital position and will accelerate the release of further land for development at the Telford site.

Michelmersh remains well positioned as a manufacturer of premium, niche brick and other clay products. Although not insulated entirely from the downturn in the UK housing sector, the Group's two key markets are large capital projects, such as St Pancras and the British Library, and the important Repair and Maintenance markets to which Michelmersh supplies the majority of its output.  This has enabled the Group to continue production when most of its competitors have been forced to close a number of their manufacturing facilities on either a temporary or permanent basis.  

Michelmersh also operates an established and profitable land fill operation at Telford, as well as exploiting the land development opportunities such as that with Persimmon.

Possible Equity Fundraising

The Company has a number of opportunities to accelerate the development of its other property assets which may include increasing its land fill operations at other existing and possible new sites.  The Group is also planning to undertake further redevelopment of certain of its landfill and other property assets.  With this in mind the Board is contemplating a possible equity fund raising to raise approximately £5.0 million further details of which are expected to be announced shortly.

Commenting, Eric Gadsden, Chairman, said '"The grant of detailed planning permission at Telford is a very significant development for Michelmersh.  We have worked closely with Persimmon over several years to achieve this result and we believe that both companies will now reap the rewards of this investment. The costs have been taken in our results for the previous three years but the returns will now start to come through in 2010".

For further information:

Michelmersh Brick Holdings plc: Martin Warner, Chief Executive	01442 870227
Charles Stanley Securities, Nominated Adviser: Russell Cook	020 7149 6000
Tavistock Communications: Jeremy Carey/Gemma Bradley	020 7920 3150

 

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