The manufacturer suffered an 8% share price drop after revealing that summer sales fell 22% below internal expectations. In addition to cutting output, Ibstock has curbed discretionary spending to manage inventories while overall UK brick volumes shrank 17% year on year throughout July and August. Chief executive Joe Hudson acknowledged that lower output creates a near-term earnings headwind, but argued the move is vital to match weak residential demand. The company also criticized ministers for postponing the launch of the Your First Home scheme until next spring.
Key points
Ibstock cut production levels by a fifth and curbed discretionary spending to manage risi…: Ibstock cut production levels by a fifth and curbed discretionary spending to manage rising inventories amid weak demand.
The company criticized the government for delaying the launch of the Your First Home sche…: The company criticized the government for delaying the launch of the Your First Home scheme until next April.
The downturn aligns with downgraded official forecasts predicting 190,000 fewer homes bui…: The downturn aligns with downgraded official forecasts predicting 190,000 fewer homes built across the UK by 2031.
Sources checked by our analysis pipeline: 1
Sales at the UK’s largest brickmaker plunged by more than a fifth over the summer, as it criticised the government for not introducing fresh help for the housing sector faster.
Leicestershire-based Ibstock said on Monday that sales slumped by 22% below its expectations in the quarter to the end of September, prompting it to slash production levels by a fifth.
Ibstock issued its second profit warning this year and said that UK brick market volumes declined by 17% year on year in July and August, with weak market conditions continuing through September and October.
“Trading conditions deteriorated sharply during the third quarter, with weakness continuing into October,” said Joe Hudson, the chief executive of Ibstock. “We have responded by reducing production to manage inventory, taking further cost action and maintaining tight control of cash. These production decisions create an additional near-term earnings headwind but are necessary to align output with demand.”
The warning by the company, which now expects full-year profits to be “materially below” previous expectations, comes days after the Office for Budget Responsibility cut its forecast for the…
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