Sales and profits fall for brickmaker Ibstock

Ibstock says it is well placed for the recovery in the construction market.

The group, which makes a diverse range of building products, saw revenue fall 20 per cent to £178 million.

Pre-tax profits reduced by 60 per cent to £12m.

Sales volumes were also hit by exceptionally wet weather in the early part of the half year..

Ibstock says major capital investment projects are now close to completion, with capacity in place for the market recovery.

Investments has been made to increase brick production at Aldridge.

Commissioning of the new Atlas brick factory is well advanced and once operating at full capacity, the upgraded clay factory network will be capable of operating at roughly double the levels of brick output produced over the last 12 months.

The new Government's focus on accelerating the delivery of new housing and infrastructure is expected to form a more positive backdrop for housing industry supply chains and effective demand over the medium term

The group remains focused on taking action to respond to prevailing market conditions and will continue to manage its cost position carefully, balancing stock levels with further investments in cost and capacity to match market demand

Chief executive Joe Hudson said: "Market conditions remained challenging in the first half, as expected, with sales volumes below those reported in the comparative period. We delivered a solid profit performance for the period which reflected our ongoing focus on the active management of cost and margin."

He added: "The new Government's commitment to increasing the supply of new homes creates a more positive backdrop for medium term demand, and the Group remains well-positioned for market recovery. Our investments over the last few years have added high quality, lower cost, efficient and more sustainable capacity to our network and developed new capabilities for the group in diversified construction markets, while also creating a leaner, more customer-focused business. We believe this will be a powerful combination as market conditions improve.

"The fundamental drivers underpinning demand in our markets are firmly in place and our prospects remain strong, underpinned by our robust balance sheet."

Atlas at Aldridge will produce the UK's first externally verified carbon neutral brick and, when operating at full capacity, will increase annual network capacity by over 100 million bricks to support the Group's long-term growth objectives.

The first volumes of this innovative new product are expected during the second half of the year.

Work to upgrade the dryers and packaging equipment in the adjacent Aldridge factory was completed during the second half of 2023 and Ibstock is already seeing significant improvements in efficiency and reductions in energy use at the site.

Production at both factories will ramp up over the course of the second half.