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Ibstock half-year profit declines in "subdued market environment"

2nd Aug 2023 09:09

(Alliance News) - Ibstock PLC said its half-year performance showed "resilience in a subdued market environment", with half-year revenue and profit down but performing in line with expectations.

The Leicestershire, England-based maker of clay and concrete building products said pretax profit in the six months ended June 30 was down 42% to GBP29.9 million, from GBP51.2 million the year prior. This stemmed from an exceptional GBP10.7 million cost from a potential closure of the Ravenhead factory, of which GBP1.5 million was a cash cost.

Revenue fell 14% to GBP223 million from GBP259 million year-on-year, which Ibstock said reflected reduced activity levels in its residential markets.

Chief Executive Officer Joe Hudson said: "We have continued to make strong progress with our strategic investment plans that will underpin Ibstock's future growth and enhance our industry leadership position."

Adjusted earnings before interest, tax, depreciation and amortization was down 11% to GBP63 million, from GBP71 million the year before, which reflected Ibstock's "disciplined approach to pricing" and an "intense focus on cost and capacity management".

Net debt stood at GBP89.1 million on June 30, up 94% from GBP45.9 million on December 31, which was due to the investment in working capital combined with GBP32.7 million of capital expenditure in growth projects.

Ibstock declared an interim dividend of 3.4 pence per share, up 3.0% from 3.3p the year prior.

Ibstock said it was confident in its medium term outlook, and committed to its medium term financial targets. The company said its balance sheet provided resilience and provided optionality on investment and shareholder returns.

"While recent macroeconomic events have introduced greater uncertainty into the outlook, we remain confident in our ability to respond to market conditions and the board's expectations for the full year are unchanged," said Ibstock.

Shares in Ibstock were up 4.7% at 159.12p in London on Wednesday morning.

By Will Neill, Alliance News reporter

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