Interim Results

Michelmersh Brick Holdings PLC
22 August 2006


22 August 2006

                         Michelmersh Brick Holdings plc

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


               Interim results for the six months to 30 June 2006


Michelmersh Brick Holdings plc (AIM: MBH), the UK's largest producer of handmade
specification bricks and clay paviors, today announces interim results for the
six months to 30 June 2006. Highlights of the results are as follows:


• Group turnover increased by 10.3% to £10.1 million (2005: £9.2 million)

• sales volume maintained at 33.2 million units (2005: 33.6 million) and
  average selling price increased 10%

• operating profit of £161,000 (2005: £628,000) as a result of higher
  energy costs and temporary plant closures

• net assets grew 38% to £43.5 million (2005: £31.5 million) after an
  option agreement was signed with Persimmon on 60 acres of land at the Telford 
  site, NAV per share is now 114.4p (2005: 82.2p)

• cash inflow from operating activities improved to £885,000 (2005
  outflow: £(912,000))

• enhanced products introduced at the end of 2004 lead to 17% increase
  in sales at Michelmersh plant

• export sales have contributed well, with 1.5 million facing bricks
  exported to Japan for the construction of a new university

• options to expand the business are under review and a number of
  potential acquisition opportunities are being considered.


Commenting on the results, Eric Gadsden, chairman, said: 'The first half of the
year has been somewhat turbulent for the brick industry, which has seen a
combination of further increases in energy costs and a reduction in demand.
Therefore, we are extremely pleased to have increased the Group's turnover
during the period with a relatively modest impact on operating margin. To
neutralise, as far as possible, the effects of rises in energy costs, we made
the decision to reduce output over the winter months, when prices peak. This has
flowed through to impact on the Group's profit for the period, but has allowed
us to improve cash flow.

'I do remain confident about the Group's long term outlook. I believe
Michelmersh's efficient modern production and distribution operations, highly
regarded sales team and strong balance sheet put us in a good position to use
the current market conditions to our advantage. We are therefore considering a
number of potential investment opportunities.'


For further information:

Martin Warner, Michelmersh Brick Holdings plc:                    01442 870 227
Richard Sunderland/Rachel Drysdale, Tavistock Communications:     020 7920 3150
Russell Cook/Mark Taylor, Charles Stanley Securities:             020 7149 6000





Chairman's Statement

I am pleased to report on the progress of the Group for the six months ending 30
June 2006. During the period, the Company managed to increase revenues, despite
challenging trading conditions. The industry has seen a substantial reduction in
demand and has faced the impact of rising energy costs, which increased
threefold during the 2005/2006 winter months, when compared to the price at the
time of our IPO. Throughout the period we have enlarged our range of products,
continued to expand our overseas markets and progressed the preparation of our
land at Telford for residential development.

We have examined ways to neutralise, as far as possible, the pressures facing
all brick manufacturers. As a result, the decision was made to reduce production
during the peak-cost winter period. This has inevitably impacted on
profitability, but has allowed us to achieve our objective of managing cash
during the period.

Financial Results

Group turnover increased by 10.3% to £10.1 million (2005: £9.2 million). The
significant increase in cost of sales for the period relate to higher energy
costs and the consequential impact of a high fixed cost plant operating on
reduced output. Whilst this has resulted in a reduced operating profit of
£161,000 (2005: £628,000), cash inflow from operating activities improved to
£885,000 (2005 outflow: £(912,000)) and end of period debt increased only
marginally to £16.4 million, from £16.2 million at the year end.

The 38% growth in our net assets at £43.5 million (2005: £31.5 million) was
primarily as a result of the uplift in the land value following the option
agreement signed with Persimmon on 60 acres of land at our Telford site at the
end of the last financial year. Net assets per share increased to 114.4p
compared to 82.8p at 30 June 2005. I refer below to the further progress that we
are making on the project at Telford.

We have also taken the opportunity of securing a new £14 million long term bank
facility to replace £9 million of overdraft facility. This provides a more 
appropriate funding structure for the Company and on more attractive terms.

In line with our established dividend policy, the Board is not recommending an
interim dividend, but again expects to recommend the payment of a final dividend
at the year end, to underline our continued confidence in the Company's long
term prospects.

Operational Review

Against an industry-wide backdrop of a 10% reduction in brick sales in 2005 and
a further 20% in the first six months of this year, the Company maintained its
sales volume at 33.2 million units (2005: 33.6 million) and achieved an average
increase in selling price of 10%. After the planned reduction in output at the
start of the year, 35.1 million units were produced (2005: 38.7 million).

As a result of the previous investment at each of the works, we have been able
to develop new products at Blockleys, Charnwood and Michelmersh. These
initiatives, together with our focus on customer service, have enabled us to
maintain our sales despite market conditions.

Of particular note is the performance of our Michelmersh plant, where sales
increased by some 17%, resulting from enhanced products introduced to the market
at the end of 2004. These include new textures and plain colours, as well as an
additional tile range. As new products from other works become established in
the market place we expect to be able to continue to maintain our market
position and sell our output.

We have continued to experience strong demand for our high value products,
particularly in one-off housing and matching work. Export sales have contributed
well, in particular, 1.5 million facing bricks were exported to Japan for the
construction of a new university at Kobe.

Good progress is being made with the planning application for residential
development on our land at Telford and we will be able to give a detailed update
when we announce our annual results. The restoration of the initial phase of
land continues apace and we anticipate that this will result in significant
income in 2008 and 2009.

Outlook

In the light of market conditions the Board has reviewed strategy for the
business moving forward. Even last week we saw Baggeridge Brick plc, our only
independent quoted competitor, in receipt of an offer from the Austrian company,
Wienerberger AG. The continuing restructuring of the UK construction supply
industry, including this latest development, represents ever greater
opportunities for Michelmersh.

Our strengths continue to be our unique product offering, customer service and
strong asset base. It is key to the ongoing profitability of the business that
we maximise output and reap the rewards of the investment efficiencies made over
the past five years. Whilst production cost pressures are expected to persist,
especially over this coming winter, we anticipate that energy prices could
stabilise thereafter.

Therefore, we are reviewing options to expand our business, particularly where
the current market conditions might work in favour of a business with efficient
modern production and distribution operations, a nationwide sales team and a
strong balance sheet. A number of potential opportunities have been identified,
which are currently being evaluated.

We expect the rest of this year to remain challenging and profitability for the
full year will be lower than that achieved in 2005, the precautionary steps that
I have outlined above will help us ensure that we continue to strengthen our
position in our market and I remain positive about the longer term outlook for
the Company. In the meantime, until we see demand in the industry pick up and a
flattening or reduction in energy costs, we will continue to prioritise cash
management.





Eric Gadsden
Chairman
21 August 2006






    CONSOLIDATED PROFIT AND LOSS ACCOUNT

                                       Half Year     Half Year     13 Months
                                              to            to            to
                                        30.06.06      31.05.05      31.12.05
                                           £'000         £'000         £'000
                                       Unaudited     Unaudited       Audited
                                                                  (restated)

    TURNOVER                              10,112         9,166        21,094
    Cost of sales                         (7,714)       (6,325)      (15,042)
                                      ---------------------------------------

    GROSS PROFIT                           2,398         2,841         6,052

    Administrative expenses               (2,263)       (2,232)       (5,032)
    Other operating income                    26            19           491
                                      ---------------------------------------

    OPERATING PROFIT                         161           628         1,511

    Interest payable and similar
    charges                                 (507)         (420)         (993)
                                      ---------------------------------------

    (LOSS)/PROFIT ON ORDINARY
    ACTIVITIES BEFORE TAXATION              (346)          208           518

    Tax on profit on ordinary
    activities                                 -             -          (135)
                                      ---------------------------------------

    (LOSS)/PROFIT ON ORDINARY
    ACTIVITIES AFTER TAXATION               (346)          208           383
                                      =======================================

    EARNINGS PER SHARE
    Basic                                   (0.9p)         0.5p          1.0p

    Diluted                                 (0.9p)         0.5p          1.0p





   CONSOLIDATED BALANCE SHEET

                                      As at           As at            As at
                                   30.06.06        31.05.05         31.12.05
                                      £'000           £'000            £'000
                                  Unaudited       Unaudited          Audited
                                                                   (restated)
   FIXED ASSETS
   Intangible assets - 
   positive goodwill                     -               22                -
   Intangible assets - other            326               -               69
   Tangible assets                   53,881          40,441           53,985
                                --------------------------------------------

                                     54,207          40,463           54,054

   CURRENT ASSETS
   Stock                              7,475           6,288            7,269
   Debtors                            4,577           4,091            4,226
   Cash at bank and in hand             811              16               42
                                --------------------------------------------

                                     12,863          10,395           11,537

   CREDITORS: Amounts falling 
   due within one year               (6,224)        (13,875)         (13,155)
                                --------------------------------------------

   NET CURRENT ASSETS/(LIABILITIES)   6,639          (3,480)          (1,618)
                                --------------------------------------------

   TOTAL ASSETS LESS CURRENT 
   LIABILITIES                       60,846          36,983           52,436

   CREDITORS : Amounts falling 
   due after more than one year     (15,540)         (3,800)          (6,366)

   PROVISIONS FOR
   LIABILITIES AND
   CHARGES
   Deferred taxation                 (1,824)         (1,689)          (1,824)
                                --------------------------------------------

   NET ASSETS                        43,482          31,494           44,246
                                ============================================

   CAPITAL AND RESERVES
   Called-up share capital            7,604           7,604            7,604
   Share premium account              3,432           3,432            3,432
   Revaluation reserve               27,776          15,199           27,776
   Profit and loss account            4,670           5,259            5,434
                                --------------------------------------------

   EQUITY SHAREHOLDERS' FUNDS        43,482          31,494           44,246
                                ============================================





CONSOLIDATED CASH FLOW STATEMENT

                                   Half Year to     Half Year to   13 Months to
                                       30.06.06         31.05.05       31.12.05
                                          £'000            £'000          £'000
                                      Unaudited        Unaudited        Audited

  Net cash inflow/(outflow) from 
  operating activities                      885             (912)           591

  Returns on investments and
  servicing of finance
  Interest paid                            (591)            (420)          (751)
  Hire purchase interest paid                (1)               -           (138)
                                   --------------------------------------------

  Net cash outflow from returns on 
  investments and servicing of finance     (592)            (420)          (889)

  Taxation
  Corporation tax received /(paid)            -                -              -
                                   --------------------------------------------

  Taxation paid                               -                -              -

  Capital expenditure
  Purchase of intangible fixed assets         -           (1,427)           (70)
  
  Purchase of tangible fixed assets        (515)               -         (3,096)

  Sale of tangible fixed assets               -                -              1
                                   --------------------------------------------

  Net cash outflow from capital 
  expenditure                              (515)          (1,427)        (3,165)

  Equity dividends paid                       -             (418)          (418)

  Net cash outflow before financing        (222)          (3,177)        (3,881)


  Financing
  Issue of new bridging loan                  -                -          3,250
  Capital element of hire 
  purchase payments                         (24)             (216)          (686)
  
  Repayment of other loans                8,718             (195)          (430)
                                   --------------------------------------------

  Net cash inflow/(outflow)from 
  financing                               8,694             (411)         2,134
                                   --------------------------------------------

  Increase / (decrease) in cash 
  in the period                           8,472           (3,588)        (1,747)
                                   ============================================


  Notes:

1.The figures for the half year ended 30 June 2006 and 31 May 2005 are
  unaudited and do not constitute statutory accounts.

2.The figures for the thirteen months ended 31 December 2005 are abridged
  from audited accounts, which are filed at Companies House and on which the
  Company's auditors gave an unqualified opinion.

3.Earnings per share of (0.9p) have been calculated based on the profit
  after tax for the six months ended 30 June 2006 and 38,017,855 shares in
  issue for the six months ended 30 June 2006.

4.Taxation is based on the unaudited results at the expected rate
  applicable for the full year.

5.The directors are not proposing a dividend.

6.The adoption of FRS 21 'Events after the balance sheet date' has resulted
  in a change in accounting policy in respect of proposed equity dividends. If
  the company declares dividends to the holders of equity instruments after
  the balance sheet date, the company does not recognise those dividends as a
  liability at the balance sheet date. The aggregate amount of equity
  dividends proposed before approval of the financial statements, which have
  not been shown as liabilities at the balance sheet date, will be disclosed
  in the notes to the financial statements. Previously, proposed equity
  dividends were recorded as liabilities at the balance sheet date.

  The adoption of FRS 25 'Financial Instruments: Disclosure and Presentation'
  has resulted in a change in accounting policy in respect of the treatment of
  dividends paid. Distributions to holders of equity share capital are debited
  directly to reserves, and not shown on the face of the profit and loss
  account for the year.

  These changes in accounting policy have resulted in a prior year adjustment
  for the company. Shareholders' funds at 31 December 2005 have been increased
  by £418,000. The balance sheet at 31 December 2005 has been restated to
  reflect the de-recognition of a liability for proposed equity dividends of
  £418,000.

7.Copies of this statement are being sent to shareholders. Further copies
  are available on request from:

  The Company Secretary
  Michelmersh Brick Holdings plc
  121 High Street
  Berkhamsted
  Hertfordshire HP4 2PJ




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