Michelmersh confident about the future despite tough 2006

After surviving a rough 2006, Michelmersh Brick is confident about the future. Turnover in 2006 was static compared with 2005 at £21m, but pre-tax profit slumped from £502,000 in 2005 to £58,000.

Despite an increase in sales volume and a 6% price increase, the high energy costs impacted heavily on profit. The decision to reduce output when energy costs at the highest cut costs to an extent, but also meant the group missed out on more than £1m of sales.

Chief executive Martin Warner noted that national brick volumes are now at their lowest level for 50 years. However, sounded many positive notes: "Energy prices are now at far more comfortable levels and I am pleased to say that our renewed confidence is underlined by the fact that all our plants are again running at full capacity.

"The shape of our industry is poised for change and we will be keeping a keen eye on the Competition Commission's forthcoming decision on the acquisition of Baggeridge by Austrian brick giant Wienerberger. We believe that if this goes through it will have a positive effect on the industry in that brick prices will inevitably go up as a result of reduced competition."