‘Challenging market conditions’ resulted in a weak financial performance for Leicestershire-headquartered brickmaker Ibstock as profits fell by more than half in its half year statement.
Pretax profit dropped 60 per cent to £11.8 million from £29.9 million in 2023, due to a slowdown in trading performance, forcing the company to cut its dividend by more than half to 1.5 pence per share from 3.4p previously.
Group revenue fell 20 per cent to £178 million (2023: £223 million), due mainly to lower sales volumes across the business, which the company claims reflects lower market demand.
Meanwhile, its cost of sales decreased 16 per cent from £150.9 million to £126.8 million and net debt rose 55 per cent over the period to £137.8 million (June 2023: £89.1 million).
The manufacturer also reported a four percent year-on-year drop in its concrete division to £59 million (2023: £61 million), and revenues in the Clay Division fell 26 per cent to £119 million (2023: £162 million).
As a result, the company anticipates a modest reduction in full year 2024 market volumes compared to the prior year, nevertheless, the Group claims it is “well positioned to serve customers and respond to an increase in activity as market conditions improve.”
Ibstock CEO 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.
“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.”
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