Ibstock, outlook remains confident despite first half decline

Despite the 14% decline in revenues, the first-half results were still slightly better than expected. The performance demonstrates the UK brick producer’s resilience in a subdued market environment, with lower customer demand across both new build and RMI segments.

As expected, the fall in demand across the UK housing industry impacted Ibstock’s results in the first half of 2023 following an exceptionally strong performance in 2022, when the company posted sales revenue of £513 million (+26%) and EBITDA of £140 million (+36%).

But despite the 14% decline in revenues to £223 million (compared to £259 million in the first half of 2022) and 11% contraction in EBITDA to £63 million, the first-half results were still slightly better than expected. CEO Joe Hudson commented:

“Our first half performance demonstrates our resilience in a subdued market environment, with lower customer demand across both new build and RMI segments.

Our focus on customer service and commercial execution, coupled with disciplined management of capacity and costs, has enabled us to deliver a result marginally ahead of our expectations, despite more challenging trading conditions.”

Out of the total revenue of £223 million, £162 million was generated by the Ibstock Clay division (-13%) and £61 million by the Concrete division (-17%).

Despite the subdued market backdrop, Ibstock decided to keep its selling prices firm and increase finished goods inventories to absorb fixed costs. At the same time, it took the decision to close the Ravenhead brick factory, which was considered to have higher costs than the Group’s other 36 facilities. The closure will reduce the Group’s current clay brick network capacity by around 40 million bricks.

Read the full article in Brick World Review 2/2023