LONDON (ShareCast) - (Sharecast News) - Brick manufacturer Michelmersh said on Friday that its trading performance since June had been "resilient", with current capacity back in line with pre-Covid levels and turnover ahead 7% year-on-year.
Michelmersh now expects underlying revenue and profits for the year ending 31 December will exceed market expectations and, as a result, has decided to repay the £500,000 it received under Downing Street's Covid-19 job retention scheme.

The AIM-listed group also noted that it had experienced strong cash flow over recent months and now expects to report a positive net cash position, even after the repayment to Number 10, compared with a net debt position of £6.5m at the midway point of 2020.

Michelmersh confirmed that it intends to pay a final dividend of 2.25p in June 2021, and thereafter, intends to return to its normal dividend timetable of interim dividend payments in January with a final dividend in June.

Analysts at Canaccord Genuity slightly raised their target price on the stock from 109.0p to 118.0p following the update, stating the group's "strong" second half had supported a "very impressive" outcome for 2020.

"The group has clearly benefited from the backlog built up in the first half, but also a good recovery in underlying demand combined with the fact that the group had recommenced its full production so swiftly and smoothly," said the Canadian broker.

As of 1100 GMT, Michelmersh shares were up 5.77% at 110.0p.

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