Demand stable amid ongoing inflation for Michelmersh Brick

Specialist brick maker Michelmersh said in an update on Thursday that the “strong and well-balanced” order book and positive momentum it reported in 2021 had continued into the new financial year.

The AIM-traded firm, which was holding its annual general meeting, said demand from customers and distribution partners had been “stable”, while production volumes were in line with expectations.

Chairman Martin Warner said the company was operating in a “more challenging environment”, pointing to the ongoing elevated rate of inflation.

“To protect our margins, we remain focussed on mitigating risks to our input costs as well as maintaining appropriate portfolio pricing,” he told shareholders.

“As such, as announced in our full-year results in March, in collaboration with our customers we will introduce our standard timetabled price increase in July.”

At the same time, to mitigate the ongoing energy price risk, Warner said Michelmersh had secured more than 90% of its energy requirement for 2022, with further contracts into both 2023 and 2024.

“Despite the current macroeconomic uncertainty, the board is confident that the ongoing quality fundamentals in our business and the wider sector provide resilience to our outlook.

“The group has made an encouraging start to 2022, and combined with our strong forward order book, we remain on track to meet full year expectations.”

Pending approval by shareholders at the meeting on Thursday, Michelmersh said its 2021 dividend of 2.5p per share would be paid on 13 July to members on the register on 6 June.

At 1147 BST, shares in Michelmersh Brick Holdings were up 0.01% at 116.51p.

Reporting by Josh White at Sharecast.com.