Michelmersh Brick Holdings PLC on Thursday announced the acquisition of a fellow brick fabricator, launched a share buyback programme, and said trading remains positive.

The West Sussex, England-based brick provider said it has bought north-west England-based Fabspeed Holdings Ltd for an initial £6.3 million plus up to £2 million as an earnout over two years.

Fabspeed is a brick fabricator and manufacturer of off-site pre-built brick products that booked 2021 pretax profit of £600,000.

Michelmersh said the initial consideration represented 5.3 times of Fabspeed’s historic earnings before interest, tax, depreciation and amortisation of £1.2 million.

It also started a share buyback programme worth up to £3.0 million. Shares in Michelmersh were up 12% to 88.00 pence in London on Thursday morning, giving the company an £84.4 million market capitalisation.

The buyback is intended to reduce Michelmersh’s share capital and return value to shareholders. It will begin on Thursday and end on February 27 and will be run by Canaccord Genuity Ltd.

Michelmersh also said its trading performance continues to be positive in the final quarter of 2022, while managing supply chain and energy costs in line with expectations. Revenue and profit are expected to be ahead of market expectations this year. In 2021, pretax profit was £9.7 million on revenue of £59.5 million.

It will release its 2022 results on March 29 next year.

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