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Brick maker warns of rising prices

Building materials producer Michelmersh Brick has warned that it could raise its prices.

Michelmersh Brick’s average selling price fell in 2010 from £350 per thousand to £330 per thousand, partly due to the acquisition of Freshfield Lane Brickworks (FLB), which tends to sell more volume products than premium.

Chief executive Martin Warner said: “Our challenge, as with other manufacturers, is to achieve price recovery. However, I believe this will come as we face up to a future of increasing energy costs.”

In 2010, Michelmersh Brick sold 67mbricks and tiles, up from 50m in 2009. The increase reflects the addition of FLB for nine months of the year and reduced capacity at Blockleys.

Total turnover for 2010 was £23.3m (2009: £17.9m), on which the company made a pre-tax loss of £7.7m (2009: £996,000 pre-tax loss). Before restructuring costs of £7.4m, the company achieved an operating profit of £500,000.

Warner said that demand for bricks had fallen 40% in the last five years, from 2.6bn to 1.5bn. “There has been intense acquisition activity and the closure of works, resulting in the majority of bricks now being produced in large manufacturing units. As this process has continued, and I believe that the market has now almost certainly bottomed out, Michelmersh Brick is in a strengthened position.”

About Fiona Russell-Horne

Fiona Russell-Horne
Group Managing Editor across the BMJ portfolio.

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