Firm supplying bricks for new Everton stadium imposed fresh hike at start of year
Brick firm Michelmersh is hoping to avoid further price rises in 2023, the company鈥檚 chief executive has said.
The beginning of the year saw the AIM-listed firm, which is supplying bricks to Everton鈥檚 new stadium at Bramley-Moore Dock, increase its prices for the third time in just over a year in the wake of soaring energy price rises following Russia鈥檚 ongoing invasion of Ukraine.
Chief executive Frank Hanna said Michelmersh would avoid further hikes 鈥渨here we can鈥�.
He added: 鈥淥ne of the things we want to do as a business this year is give some stability to our customer base in terms of our pricing,鈥� he said, explaining the company鈥檚 decision to hedge 90% of its energy needs for the year ahead. 鈥淚t is very difficult as a consumer of construction materials to work in an environment where energy is driving inflation.鈥�
Michelmersh saw revenue increase 15% to 拢68.4m in 2022, with pre-tax profit up slightly from 拢9.7m in 2021 to 拢11.4m.
In November, the firm acquired FabSpeed, an offsite brick product manufacturer, for an initial 拢6.25m.
鈥淭here was a lot of revenue going out of the door that we were missing out on by not having a specialist offsite fabrication,鈥� he said, adding that the acquisition of FabSpeed gave it 鈥渃ontrol of our destiny鈥�.
He said demand from pre-manufactured brick products had risen in the wake of the Grenfell Tower fire. 鈥淧articularly after the remedial work that is being done after the Grenfell inquiry, panelised brick systems are a great cladding material because they have got an A1 rating over 18 metres for fire retardancy, so we are picking up a bit of work there,鈥� he said.
But he said off-site manufacturing was 鈥渘ot the silver bullet everyone thinks鈥� and that it would continue to play a smaller part in the firm鈥檚 portfolio.
Michelmersh鈥檚 revenue last year was evenly split between new build residential, repair and maintenance and non-residential and specification.
Hanna said new housing numbers would fll for much of this year with a recovery only returning in the final quarter and the beginning of 2024.
But he said the greatest impact would be on large national housebuilders, rather than the regional developers that form Michelmersh鈥檚 main client base.
Analysts at Canaccord Genuity are expecting Michelmersh鈥檚 turnover to be 拢83.5m this year with pre-tax profit coming in at 拢12.8m.
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