Ibstock Sales Weak as Medium Term Prospects Hold

IN ITS first quarter trading update, Ibstock sales volumes were “below expectations” as the company says conditions remain “challenging”.

Activity levels across residential construction markets remain subdued during the Q1, with weaker end market demand in part reflecting the exceptionally wet UK weather in the early months of the year.

However, Ibstock Group says it delivered adjusted Q1 EBITDA “in line with our expectations”. This was achieved through cost reductions, commercial discipline and operational execution.

The business says “we are encouraged by recent lead indicators which suggest some improvement in future demand”.

Costs and operational performance “during this period of market volatility” will remain a focus. The company expects sales volumes to improve as the year progresses, and its expectations for full year adjusted EBITDA are unchanged.

Ibstock reports its major capital projects are on track with commissioning of the new net zero Atlas factory in the West Midlands and the first phase of the brick slip systems investment in Nostell, Yorkshire progressing well.

The company says, the projects, together with previous investment in its core business over recent years, leave the Group “well positioned to support the significant unmet demand for new build housing in the UK”.

Ibstock Sales

Joe Hudson, CEO of Ibstock PLC, said: “Trading conditions remained challenging in the first quarter. Against this background, adjusted EBITDA for the period was in line with our expectations, supported by our disciplined action on costs and strong operational execution.

“While we expect market demand to remain subdued in the near term, lead indicators reflect an increase in housing market activity, which offers encouragement for an improvement in volumes in due course.

“Our medium-term prospects remain strong, underpinned by our robust balance sheet, well invested manufacturing network and leading market positions. We have the capability to take advantage of opportunities against the current subdued backdrop, and the business is well placed to achieve strong, profitable growth as our markets recover.”

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