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European expansion boosts IHT qualifying Michelmersh

Stack of bricks made by Michelmersh

Established in 1997, Michelmersh Brick Holdings (LON:MBH) comprises six of the UK’s premium brands of bricks, pavers and bespoke terra cotta products. More recently it also acquired its first businesses overseas, bringing a Belgium based manufacturer into the fold. This IHT qualifying company ticks many boxes for investors, including a high yield a low price-to-earnings-to-growth ratio. 


Impressive interim results and positive outlook lift the share price


A maiden contribution from the new Belgian subsidiary at Michelmersh Brick Holdings (LON: MBH) helped lift revenues 17% to £27.2m and underlying pre-tax profit 18% to £5.2m for the six months ending 30 June 2019.

While some may be wary of the group’s exposure to the rather fragile UK new build market, as a lower volume producer of specialist products Michelmersh is less exposed than mainstream brick producers. Management also commented how brick stocks across the industry remain at historically low levels with the volume of imported products increasing. Delays at UK ports over Brexit could therefore offer a boost to UK-based suppliers like Michelmersh.

With expectations for the full year now ahead of previous estimates, house broker Canaccord Genuity upgraded their adjusted earnings forecasts by 5.4% to 7.8p per share for the year to Dec 2019. At the current share price of 92.5p…

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This article was written by experts from Fundamental Asset Management.

Specialist Inheritance Tax (IHT) investment management firm, Fundamental, has unrivalled knowledge of AIM and smaller quoted companies. Fundamental has successfully managed AIM portfolios for IHT planning purposes since 2004, delivering outstanding growth for its clients, well ahead of mainstream funds and stock market indices.

Find out more about Fundamental’s services.


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