Brickmaker Ibstock has reported a strong balance sheet offering ‘resilience in subdued conditions’ and strategic options for the future.
It comes after the company reported a 25 per cent rise in revenues in the last financial year of £510 million.
The Group said its underlying profit expectations for the year ending 31 December 2023 are unchanged.
The manufacturer saw margins in Q3 despite sales volumes being below those achieved in Q2, due to “effective cost reduction” and stable pricing.
“Market demand in the period was more subdued than expected,” said Ibstock.
However, the Board anticipates its actions will mitigate “demand weakness” in the wider UK brick industry in the final quarter.
The Group said it will continue to manage capacity and costs amid “ongoing challenging market conditions” and a subdued residential construction sector, ensuring it is well positioned when activity recovers.
It expects its new Atlas factory in the West Midlands to open towards the end of the year, and to bring to market the “UK’s first certified carbon-neutral brick” in 2024, not by the end of 2023 as previously reported.
The Leicestershire business is reportedly aiming for 20 per cent of its sales by the end of the decade to come from new sustainable products, and to be net zero by 2040.
The Group comprises two core business divisions, Ibstock Clay and Ibstock Concrete.
“The Group delivered a resilient performance in the third quarter despite a very challenging market backdrop,” said CEO Joe Hudson.
“I am proud of the way that everyone at Ibstock has remained focused on the delivery of a strong operational performance while also ensuring that the Group made continued strategic progress.
“As macroeconomic conditions stabilise, we expect a recovery in market activity, reflecting the significant underlying demand for new build housing in the UK.
“Whilst we are taking a cautious view around the pace and timing of this recovery, we remain confident in our ability to continue to respond to market conditions, taking the action necessary to protect performance, while ensuring the business remains well-positioned for an increase in activity.”
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