Sale of Development Land

Michelmersh Brick Holdings PLC
14 December 2005



14 December 2005
                         Michelmersh Brick Holdings PLC

                 60 ACRES OF DEVELOPMENT LAND SOLD TO PERSIMMON

                                -Trading update-

Michelmersh ('Michelmersh' or 'the Company')(AIM: MBH), the UK's largest
producer of handmade specification bricks and clay paviors, announces that it
has concluded an agreement with Persimmon Homes ('Persimmon') for the
residential development of 60 acres of land at the Company's Telford site.

Persimmon has entered into an option to purchase the site upon grant of planning
consent on a phased basis. Persimmon will now progress detailed planning for the
first seven acres of land. In addition, Persimmon will also develop a master
plan with the planning authority for a phased development of the remaining land,
which will be released as clay is worked, and restoration completed. This will
enable land to be released and co-ordinated with Michelmersh's brick making and
restoration operations. Michelmersh will incur costs in the preparation of land
for sale for residential development. These will be reflected in the Company's
results for the 2006 and 2007 financial years.

The initial phase of land has been proposed for development between 2006 and
2011 in the recently published Local Development Framework Preferred Options
Report. It is anticipated that Michelmersh will receive income of £10 million
through the sale of this land in the 2008 and 2009 financial years.

Since the Company indicated in its interim statement that a planning agreement
had been concluded for the comprehensive development of this Telford site, the
Board has been considering how best to maximise shareholder value. The Board
considers this transaction marks a pivotal juncture in the Company's
development, as Michelmersh is now able to marry its position as an important
supplier of building products with opportunities afforded it through land
development and planning.

As at 31 May 2005 the Company had Tangible Fixed Assets of £40.4 million and
Total Net Assets of £31.2 million. As the Board has indicated in earlier
statements, the value of this residential development asset will be reflected in
the Company's 2005 year end balance sheet.

In light of this transaction and current market conditions, the Company has
reviewed its brick making operations and the impact of current and projected
energy costs, particularly over the winter months.

Apart from Blockleys, where sales are at a similar level to last year, the
Company has attained higher volumes at each of its other plants. Selling prices
have also increased at all works.

However, energy prices are now around three times greater than at the time of
the Company's flotation in May 2004 and twice what they were last year, with an
obvious impact on margins. In line with the other businesses in the brick
manufacturing sector, the Company is adjusting production to prioritise cash
management against profit until prices increase in the industry to reflect the
cost levels now being experienced. This will impact upon profitability for this
period and, if current market conditions and costs prevail, will similarly
affect next year as well.

The Company's capital investment programme is now complete and Michelmersh is
well placed to benefit from an improved performance from the business as margins
recover, whilst continuing to ensure that shareholder value is maximised from
the land assets held.

Eric Gadsden, chairman, commented: 'The deal signed with Persimmon will add
significant strength to our balance sheet at a time when industry is examining
ways to counter the effect of rapidly increasing energy costs. The efficiencies
gained through our recently completed investment programme have significantly
reduced the impact of these cost rises. This, combined with the income gained
from the sales of our land assets, gives us a degree of financial security which
we believe will allow Michelmersh to weather the storm and make the most of any
opportunities which arise as a result of it.'

For further information:

Martin Warner        Russell Cook/Mark Taylor   Jeremy Carey/Richard Sunderland
Managing Director    Charles Stanley & Co Ltd   Tavistock Communications
Tel: [phone]   Tel: [phone]         Tel: [phone]
                                                [e-mail]


Notes to editors

Michelmersh is a holding company with five subsidiary companies, Blockleys,
Michelmersh Brick & Tile, Charnwood and Duntons, which manufacture clay bricks
and paviors, and New Acres, which operates a landfill site.

Michelmersh has grown through acquisition and organic growth into a profitable,
cash generative and asset rich business. Since 1997, it has invested in excess
of £15 million in the modernisation of its plant and production processes and
now has the capacity to produce over 85 million bricks per annum.

Michelmersh floated on AIM on May 2004 and is currently capitalised at about £40
million.

Further information on the Company can be found at www.michelmersh.co.uk



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