6th Aug 2020 10:56
(Alliance News) - Clay bricks and concrete products manufacturer Ibstock PLC on Thursday swung to a first half loss due to a sudden halt in construction activity amid the Covid-19 pandemic, but said that it has reopened the majority of its manufacturing sites and is seeing continued recovery in demand patterns in July.
For the six months to June 30, the company recorded a pretax loss of GBP52 million, compared with GBP41 million profit a year ago. The loss was blamed on weak operating performance and non-underlying costs of GBP41 million relating to Covid-19 and restructuring.
Prior to exceptional items, the adjusted pretax loss was GBP10.5 million versus a GBP41.6 million profit last year. Adjusted earnings before interest, tax, depreciation and amortisation fell 84% to GBP10 million from GBP59 million.
Revenue reduced by 36% to GBP131 million from GBP203 million, with the Clay division seeing a 43% year-on-year drop to GBP86.5 million and Concrete unit recorded a 15% drop in revenue to GBP44.5 million.
Ibstock said it has commenced a restructuring programme to deliver material reduction in its fixed cost base, including closure or mothballing of three clay factories and headcount reductions, to deliver up to GBP20 million of annual fixed cost savings in 2021 at a one-time cash cost of GBP10 million.
Looking forward, the company said: "We are encouraged by recent market trends, with July sales volumes at around 80% in clay and around 85% in concrete compared to prior year levels. While trading conditions have continued to improve, significant Covid-19 uncertainty persists and so it remains difficult to predict what the outcome for the year will be.
"The fundamentals for our markets remain positive, with a substantial housing deficit in the UK and government policy which is supportive of the role the construction sector will play in the UK economic recovery."
Shares in the FTSE 250-listed company were down 3.6% at 162.10 pence each.
By Tapan Panchal; [email protected]
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