Trading Update

RNS Number : 0856W

Ibstock PLC

30 July 2018

 

30 July 2018

Ibstock plc

Trading Update

Ibstock plc (the "Group") today announces an update on trading and the outlook for the year.

The Group's adjusted EBITDA for the six months ended 30 June 2018 is expected to be circa £58m, subject to finalisation of auditor review. The results reflect a weather impacted start to the year and higher energy costs, as announced in the trading update given at May's AGM.  Reported EBITDA will be circa £66m which includes the previously announced sale of surplus property.

Demand from the Group's UK brick customers continues to be strong, particularly from the new housing sector, and market fundamentals remain favourable.

The Group's UK brick factories have been producing at, or close to, full production capacity for an extended period. In recent months however, particularly in July, production has been lower than expected and despite corrective measures output, and therefore cost recovery, in the second half of the year is now anticipated to be below expectations. A twelve month period of increased maintenance activity is now planned to ensure the factories can operate at sustainable levels to meet continued increasing demand.

As a result Ibstock now expects that adjusted EBITDA for the year ended 31 December 2018 will be in the range of £121m to £125m with reported EBITDA in the range £130m to £134m.

The Group's new brick factory in Leicestershire is outside the scope of these measures and is expected to be fully commissioned by the end of 2018, as planned.

The Board's expectations in respect of the interim dividend for 2018 and a proposed supplementary dividend in line with the previously announced supplementary dividend policy are unchanged. Cash generation remains strong and has been augmented by surplus property disposals.

Joe Hudson, CEO, said: "Demand in our UK brick markets is robust and the outlook for our UK Clay business remains encouraging, supported by the ongoing need for new housing. As market leader Ibstock is in a strong position to benefit from this positive backdrop.

"However, following my appointment as CEO, the Group has completed a review of its brick manufacturing assets which has identified a number of measures that are required to sustain the quality and range of our production output. While the resulting additional maintenance shutdowns and extra spending on plant maintenance and refurbishment will have a short-term impact on our financial performance, we firmly believe that it is the right thing to do for our customers and to maximise long-term value for shareholders. We will be working closely with all customers to ensure we continue to meet their demand requirements over the second half."

The Group's results for the six months ended 30 June 2018 will be announced as planned on 9 August 2018.

The person making this notification on behalf of Ibstock plc is Robert Douglas, Company Secretary.

Enquiries

Ibstock (enquiries via Citigate Dewe Rogerson)
Joe Hudson (CEO)
Kevin Sims (CFO)
Citigate Dewe Rogerson	020 7638 9571
Kevin Smith
Nick Hayns

 

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