- Ibstock expects full-year revenue to fall 21% to around £405mn
- Headcount reduced to reflect near-term demand expectations
- Net debt rose from £46mn to £101mn
Aarin Chiekrie, equity analyst, Hargreaves Lansdown:
“It’s no real surprise to see Ibstock wrestling against the struggles of a housing market slowdown. Residential volumes have dropped significantly in 2023, and the group expects business to remain subdued over the near term. To combat the challenging market backdrop, Ibstock reduced headcount and pulled back on production, carefully matching supply with demand to try and avoid a build-up of inventory. This involved the permanent closure of the group’s brick factory in Surrey, which will cost the group around £20mn over the current and prior year. This isn’t great news and raises questions about the group’s ability to ramp up production quickly when the market turns. In the meantime, cost-cutting measures remain the key route to protecting group margins.
There are some very early signs the worst may be behind Ibstock now. Cost inflation appears to have eased and the fact that lenders are becoming more competitive on mortgage rates is a major positive for homebuyers, which ultimately feeds through to increased demand for Ibstock’s products.”
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