Michelmersh Brick (LON:MBH) said it had enjoyed a strong start to the financial year thanks to improvements to brick market driven by overall activity in the construction sector.
Deliveries in the first four months of the current year were ahead 10%, chairman Eric Gadsden will tell the company’s annual meeting later.
Michelmersh has met demand for its products thanks to increased capacity from its Freshfield Lane facility.
“We have also seen continued price improvement as the brick market adjusts to current activity levels in the construction sector,” Gadsden will tell investors later.
“We are actively assessing opportunities to further invest in our manufacturing plants to reduce costs and secure longevity of operations.”
The company’s broker Cenkos, in a note to accompany the AGM statement, said it expects selling prices to increase 7.5% this year and 2% in 2016.
Analyst Marcus Tregoning told clients: “Today’s statement is indicative that the group continues to operate at full capacity as demand outpaces supply supporting price improvement.”
He said going forward he expects the UK brick industry supply and demand deficit to remain thanks to a “sustained recovery in house building driven by political pressure to resolve the UK housing shortage”.
By 2020, the Conservatives have promised to build 200,000 starter homes for first-time buyers, more garden cities and a further 400,000 new units from brownfield land, the analyst said.