6th Aug 2025 11:30
(Alliance News) - Ibstock PLC on Wednesday maintained its dividend and guidance as pretax profit fell due to cost inflation, despite higher revenue.
The Leicestershire, England-based building products supplier said revenue increased 8.6% to GBP193.4 million in the six months to the end of June from GBP178.2 million a year ago.
Pretax profit was down 34% to GBP7.7 million from GBP11.8 million, as cost of sales climbed 11% to GBP141.0 million from GBP126.8 million and administrative expenses grew 15% to GBP23.8 million from GBP20.8 million.
Ibstock maintained its interim dividend per share from a year ago of 1.5 pence.
The company said there has been material growth in its key markets, particularly within the new-build residential market, as UK brick deliveries climbed 13%.
It said pricing progression in the period was "modest" against a competitive market backdrop, with lower profitability in the Clay business due to cost inflation.
"The new-build residential market showed encouraging signs of recovery in the first half of the year, but activity is still well below normalised levels. As we plan for a period of further market growth, we have invested in restoring core capacity to meet demand. Whilst this has impacted margins in the first half, it will ensure we are able to benefit fully from the recovery as the market progresses," said Chief Executive Officer Joe Hudson.
Looking ahead, Ibstock said it has made an encouraging start to the second half of the year. It expects sales volumes in the second half to grow compared to the previous year, but noted "broader macroeconomic risk and the potential impact this may have on our markets".
It said pricing in the second half is expected to remain stable, with some potential for positive sales mix as growth in end markets "rebalances to historic levels over time".
"We are focused on delivering improved operational efficiency and the disciplined management of costs," the company said.
It expects to achieve adjusted earnings before interest, tax, depreciation and amortisation ahead of the comparative period in the second half. It continues to expect adjusted Ebitda in the full year between GBP77 million and GBP82 million.
For 2024, Ibstock reported adjusted Ebitda of GBP79 million.
In the longer term, Ibstock said the market "presents strong growth prospects underpinned by supportive government initiatives, improving affordability metrics and increasing mortgage approval levels".
The Clay network can support "further significant market growth from current levels" without structurally increasing fixed costs, the company added.
Ibstock said it has increased confidence in delivering its committed revenue target of GBP600 million over the medium term.
CEO Hudson added: "With both our core and diversified platforms now substantially in place to meet growing demand, I am confident in our ability to deliver on our medium-term revenue goals alongside improvements in profitability and returns driven by margin focus and significant operational leverage through the recovery cycle."
Shares in Ibstock were up 1.6% at 149.80p in London on Wednesday morning.
By Michael Hennessey, Alliance News reporter
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