Building materials group Baggeridge Brick said its first half profits would be "substantially" hit by a rise in gas prices over the winter.

At its annual meeting, the group - which has a manufacturing base in Rudgwick, near Horsham, West Sussex - said it no longer had a fixed-price agreement with suppliers of gas and that prices had been volatile.

However it said that results for the full year to the end of September 2006 were expected to remain in line with its forecasts.

Chief executive Alan Baxter said the company had seen its energy bill increase by more than 100 per cent since late October.

Expectations for full-year profits remain unchanged despite the first half being badly affected by the winter gas price, he added.

Mr Baxter said this was because the surge in fuel prices had been taken into account when forecasts were made, and that while bills had more than doubled, they did not get as high as they might have done.

It said that - like others in the industry - it had adopted a floating pricing agreement with its energy suppliers which had led to much higher bills.

Chairman Alexander Ward said the firm had raised prices from January 1, and sales levels since the beginning of October were similar to the same period in the previous year. Baggeridge's pre-tax profits fell 30.8 per cent to £5.5 million in the 12 months to the end of September 2005.

One reason for this was a reduction of about 220 million in the demand for bricks due to the subdued housing market and the number of flats and apartments being built as opposed to larger houses.

Baggeridge's main business is the manufacturing of bricks and pavers at five locations - including four in the West Midlands, where it also has landfill sites.

It's plant in Rudgwick employs 45 people. The site situated on a substantial reserve of Wealden clay had been a family-owned business until Baggeridge took over in 1998.

Baggeridge also said non-executive director Rupert Soames - brother of MP for Mid Sussex Nicholas Soames - would not be standing for re-election at the AGM.

Wednesday, February 22, 2006