Business
Sale of Development Land
Sale of Development Land.
About this update from Michelmersh Brick Holdings Plc
[{"type":"text","content":"\n Michelmersh Brick Holdings PLC\n14 December 2005\n\n\n\n14 December 2005\n Michelmersh Brick Holdings PLC\n\n 60 ACRES OF DEVELOPMENT LAND SOLD TO PERSIMMON\n\n -Trading update-\n\nMichelmersh ('Michelmersh' or 'the Company')(AIM: MBH), the UK's largest\nproducer of handmade specification bricks and clay paviors, announces that it\nhas concluded an agreement with Persimmon Homes ('Persimmon') for the\nresidential development of 60 acres of land at the Company's Telford site.\n\nPersimmon has entered into an option to purchase the site upon grant of planning\nconsent on a phased basis. Persimmon will now progress detailed planning for the\nfirst seven acres of land. In addition, Persimmon will also develop a master\nplan with the planning authority for a phased development of the remaining land,\nwhich will be released as clay is worked, and restoration completed. This will\nenable land to be released and co-ordinated with Michelmersh's brick making and\nrestoration operations. Michelmersh will incur costs in the preparation of land\nfor sale for residential development. These will be reflected in the Company's\nresults for the 2006 and 2007 financial years.\n\nThe initial phase of land has been proposed for development between 2006 and\n2011 in the recently published Local Development Framework Preferred Options\nReport. It is anticipated that Michelmersh will receive income of £10 million\nthrough the sale of this land in the 2008 and 2009 financial years.\n\nSince the Company indicated in its interim statement that a planning agreement\nhad been concluded for the comprehensive development of this Telford site, the\nBoard has been considering how best to maximise shareholder value. The Board\nconsiders this transaction marks a pivotal juncture in the Company's\ndevelopment, as Michelmersh is now able to marry its position as an important\nsupplier of building products with opportunities afforded it through land\ndevelopment and planning.\n\nAs at 31 May 2005 the Company had Tangible Fixed Assets of £40.4 million and\nTotal Net Assets of £31.2 million. As the Board has indicated in earlier\nstatements, the value of this residential development asset will be reflected in\nthe Company's 2005 year end balance sheet.\n\nIn light of this transaction and current market conditions, the Company has\nreviewed its brick making opera...