Interim Results

Interim Results 6 August 2025

LEI: 2138003QHTNX34CN9V93

Ibstock Plc

Interim results for the six months ended 30 June 2025

Volumes growing with market recovery; margins expected to build from H2 25

Ibstock Plc ("Ibstock" or the "Group"), a leading UK manufacturer of a diverse range of building products and solutions, announces results for the six months ended 30 June 2025.

Market recovery drives volume growth

Investing in core and diversified capacity

Current trading and outlook

Longer term growth outlook

Joe Hudson, Chief Executive Officer, commented:

"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.

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."

Capital Markets Events: Ibstock is committed to developing innovative and sustainable ways to build the future and is pleased to confirm that it will be hosting a Capital Markets Day at its Atlas factory in the final quarter of 2025, followed by a visit to its Nostell facility in the first half of 2026. Details to follow.

Results presentation

Ibstock is holding a presentation at 10.30 BST today at UBS, 5 Broadgate, London EC2M 2QS.

Please contact [email protected] to register your in-person attendance.

A live webcast of the presentation and Q&A is also available. Please register here for the live webcast.

The presentation can also be heard via a conference call, where there will be the opportunity to ask questions.

An archived version of today's webcast analyst presentation will be available on www.ibstock.co.uk later today.

About Ibstock Plc

Ibstock Plc is a leading UK manufacturer of building products and solutions, backed by design and technical services that comprises two core divisions:

Ibstock Clay: The leading manufacturer by volume of clay bricks sold in the UK, with 15 manufacturing sites served by 15 active quarries. Ibstock Kevington provides masonry and prefabricated component building solutions, operating from four sites.

Ibstock Concrete: A leading manufacturer of concrete roofing, walling, flooring and fencing products, along with lintels and rail & infrastructure products. The concrete division operates from 13 manufacturing sites across the UK.

Both divisions are complemented by Ibstock Futures, which was established in 2021 to accelerate growth in new segments of the UK construction market and focuses on even more sustainable solutions and Modern Methods of Construction (MMC) from two main locations.

The Group's ESG 2030 Strategy sets out a clear path to address climate change, improve lives and manufacture materials for life, with an ambitious commitment to reduce carbon emissions by 40% by 2030 and become a net zero operation by 2040.

Further information can be found at www.ibstock.co.uk

Forward-looking statements

This announcement contains "forward-looking statements". These forward-looking statements include all matters that are not historical facts and include statements regarding the intentions, beliefs or current expectations of the directors. By their nature, forward-looking statements involve risk and uncertainty because they relate to future events and circumstances that are difficult to predict and outside of the Group's ability to control. Forward-looking statements are not guarantees of future performance and the actual results of the Group's operations. Forward-looking statements speak only as of the date of such statements and, except as required by applicable law, the Group undertakes no obligation to update or revise publicly any forward-looking statements.

1Alternative performance measures are described in Note 3 to the interim financial statements.

Chief Executive's Review

Introduction

The Group delivered strong growth in revenues in the first half of the year, driven by a robust volume performance, with activity in the first half of the 2025 year significantly above last year's levels. Overall, UK brick market deliveries including imports for the five months ended 31 May 2025 of 750 million were 13% above the comparative period, with the Group's performance ahead of this level. We are encouraged by the progress of market recovery to date, and, whilst mindful of short-term uncertainties, anticipate further progress in volumes during the second half of the year.

As the Group prepares for a period of further volume recovery, we have taken steps to reactivate productive capacity to meet demand. Whilst doing so, we have incurred higher-than-expected incremental costs in the first half, which impacted profitability in the Clay division. Whilst the performance delivered in the first half fell short of our initial expectations, we are focused on driving efficiencies through the factory network and expect profitability to improve in the second half of the year. Having reactivated around 20% of total clay network capacity over the last 12 months, at the end of June 2025 the Group had around 85% of total capacity in an active state, with the remaining 15% remaining either idle or mothballed.

Pricing progression in the first half of 2025 was modest, reflecting a competitive market backdrop in some areas of the market, meaning we were not able to fully recover cost inflation in the period. We also experienced a negative impact of sales mix, as a result of relatively stronger growth in new-build residential construction.

We remain committed to developing innovative and sustainable ways to build the future and have made good progress with both our core business and diversified growth strategy. At our Atlas pathfinder factory the team continues to ramp up production of our lowest carbon bricks to date, demonstrating our commitment to sustainable manufacturing at scale. Our two investments at the Nostell factory are also progressing well. These investments enable us to cater to evolving UK building needs, serving existing and new customers with a wide range of lower carbon ceramic façade solutions.

Our calcined clay project is progressing well. Having undertaken rigorous R&D and testing, we are now preparing to accelerate to the next phase of the project and are in detailed discussions with potential partners, with a commercial roadmap expected to be concluded by the end of that process. This low-carbon cement substitute solution should enable a 40% carbon saving versus ordinary Portland cement, and presents a significant opportunity as a growth driver.

Activity levels in the early weeks of the second half continue to reflect improving demand, and we anticipate a continued increase in sales volumes in the second half of the year, although we remain mindful of broader macroeconomic risk and the potential impact this may have on our markets. We expect pricing to remain stable, with the potential for some improvement in sales mix, as the Group's markets revert to historical levels, over time.

Our focus on embedding a consistent high-performing manufacturing culture throughout the network is expected to drive further efficiencies and will support an improvement in profitability within our core business. We believe that we are in a strong position to benefit from the anticipated market recovery, with one of the broadest ranges of building products and solutions in the UK and the core capacity now in place to support further significant market growth over time.

We have been recognised for leading the way in sector sustainability for many years and this remains a core part of our strategy, complemented by an increasing focus on social impact. This focus will also serve to unlock wider market opportunities such as our expansion into social housing, a key vector of market growth going forward.

Our balance sheet remains solid, and we expect net debt to reduce during the second half of the year with an increase in adjusted EBITDA1 and working capital requirements that are seasonally lower in the second half. In the long term, in addition to benefiting from the strong underlying growth from the business, free cash flow generation is expected to accelerate as our significant organic capital investment programme draws to a close and capital expenditure reverts to more typical maintenance levels. This de-leveraging will leave us with a strong balance sheet and enhanced financial flexibility, in respect of broader capital allocation strategies and future growth investments.

The Board has recommended a dividend of 1.5 pence for the period, reflecting its continued confidence in the prospects for the business (2024:1.5 p).

Financial Performance

Revenue for the period was up by 9% to £193 million (2024: £178 million) as we delivered strong volume growth in the first half, particularly within the Clay division. Pricing progression was modest across the Clay and Concrete businesses, reflecting a competitive market environment. We also experienced a negative impact from sales mix, with stronger than average growth within the new-build residential market and a relatively more subdued RMI sector.

During the period we took the decision to reactivate a proportion of our inactive core capacity, to ensure that we are ready to meet recovering demand. Whilst this led to higher-than-expected incremental costs in the period, we expect profitability to improve in the second half as productivity and operational efficiency ramp up.

Adjusted EBITDA1 for the period of £36 million was down 6% (2024: £38 million) reflecting these incremental costs, as well as a competitive market backdrop which limited our ability to pass through cost inflation. Adjusted EBITDA1 margins for the period were down 280 basis points to 18.4%.

Profit before tax for the period of £8 million (2024: £12 million) was down 35%. Basic EPS on an adjusted basis1 for the period was 3.0p (2024: 3.5p), reflecting a tax rate of 26%, in line with guidance given at the time of our 2024 full-year results.

We disposed of the first tranche of a closed site at Ravenhead in the North West during the period, recognising cash proceeds of £3 million (and generating a profit on disposal of just over £1.5 million). We continue to expect to realise proceeds of around £30 million from the land estate over the coming 3 to 5 years.

Net debt1 at the end of the period stood at £145 million, compared to £122 million at the beginning of the period, reflecting the planned seasonal investment in working capital. We expect to generate positive cash flows in the second half of the year, and for the closing net debt1 number to be slightly above the prior year level, reflecting the revised profit guidance for the 2025 year set out in our 11 June trading update.

Divisional Review

Clay : Investing in core capacity to meet growing market demand

The Clay Division delivered a strong volume performance with revenue for the first half of £133.5 million, up 12% from the comparative period (2024: £119.4 million). Within this, the core Clay business delivered sales of £128.4 million, up 11% (2024: £115.5 million), whilst Ibstock Futures recorded an encouraging increase in sales to £5.2 million (2024: £3.9 million).

Overall, total UK brick market deliveries for the five months ended 31 May 2025 of 750 million were 13% above the comparative period, with the Group's performance ahead of this level. Progression in selling prices was modest, reflecting a more competitive backdrop in some parts of the market. We experienced a negative impact from sales mix: the division achieved stronger growth within our wire-cut brick product range, the majority of which are for new build housing markets, with growth more muted for our soft-mud brick range, which typically provides a more differentiated offering into RMI and specification-led markets. We also experienced regional variation in demand patterns, with volume growth in most regions compared to a reduction in London and the South East. The proportion of non-best sales volumes was above the historic average, reflecting lower operational yields at factories ramped up during the period.

Adjusted EBITDA1 of £32.8 million was down 4% (2024: £34.2 million) due to higher-than-expected incremental costs arising from adding back core capacity from a number of factories to meet demand and a more competitive market backdrop, limiting our ability to pass through cost inflation. Production volumes during the first half of 2025 represented around two-thirds of total available capacity (H1 2024: around 50%).

Adjusted EBITDA1 margins for the period within the Clay Division were 24.6%, down 400 basis points (2024: 28.6%) reflecting lower margins within the core Clay business for the reasons outlined above, partly mitigated by an improvement in financial performance within the Ibstock Futures business.

The performance of the Ibstock Futures business is reported within the Clay segment. We are pleased with the progress made by Ibstock Futures during the period. We remain committed to developing innovative and sustainable ways to build the future and believe that modern construction markets represent an important source of diversified growth for the Group over the medium term.

Excluding the contribution made by the Glass Reinforced Concrete (GRC) business, which ceased during the first half of the 2025, revenue at Ibstock Futures grew by over 50% year-on-year as all product lines delivered progress. Total revenue on a reported basis increased by 32% in the period to £5.2 million (2024: £3.9 million).The financial performance of Ibstock Futures also showed progress, with overall net costs (including research and development expenditure) reducing to £1.5 million (2024: £3.3 million).

Concrete: Solid growth in residential categories but with lower rail activity impacting mix

Revenues within the Concrete division were up 2% on the comparative period, at £59.9 million (2024: £58.8 million). This reflected solid volume growth across residential product categories, offset by weaker rail infrastructure sales volumes. Infrastructure rail volumes were materially lower year-on-year as activity levels in UK rail infrastructure markets fell to historically low levels.

Adjusted EBITDA1 within the division of £6.0 million was down 20%, (2024: £7.5 million) with adjusted EBITDA1 margin down by 280 basis points year-on-year to 9.9% (2024: 12.7%). The reduction in margin principally reflected an adverse sales mix effect, with lower volumes in the rail infrastructure sector (which represents a higher-margin part of the Concrete division). Performance within the division's residential product categories was relatively more resilient, although margins were marginally lower, reflecting a more competitive backdrop in some parts of the market.

As an agile business operating in attractive product categories with strong fundamentals, the Concrete business is well positioned to deliver significant improvement in performance as markets recover.

Navigating and driving the business under North Star

Our operational strategy remains anchored around the three strategic pillars of Sustain, Innovate and Grow. Within these pillars, and in order to further accelerate progress, we have redefined our focus to five key strategic priorities under the collective banner of the "North Star". This initiative underlines our resolve to define and differentiate our business with clarity and intensifies our focus on driving execution across the network.

Sustain

A Safe Reliable Production System

The Group has invested significant capital in the factory networks of our business over recent years. At the same time, the operational challenges faced by our business over the last 6 months highlight the need for an enterprise programme to embed a consistent, high-performance manufacturing culture across the Group. We have therefore created a dedicated team charged with designing and embedding the Ibstock Safe, Reliable Production System.

This multi-year transformation programme aims to drive safety, efficiency and product quality. During the first half, we made good progress on the development of a standardised work system, which will facilitate best practice across the network. We intend to roll this system out to one clay factory initially, before embedding it more broadly from 2026.

Customer Focus and Obsessive Customer Experience

We are proud of our enduring customer relationships, earned through a high-quality and broad range of products, trust, and a deep understanding of our customers' needs. We are building a stronger data- oriented approach for customer and demand insights, and this is enhancing the effectiveness of our commercial teams. In addition, we are sharpening our focus on the specification market, which provides a significant growth opportunity. Finally, we will ensure that we are agile and able to respond to growth in demand and customer New Product Development (NPD) requirements, through digital demand planning and advanced Sales & Operational Planning (S&OP) capabilities.

Innovate

Sector Innovation

Ibstock is committed to developing innovative and further sustainable ways to help provide solutions and additionality to the UK's critical building needs with a number of key strategic initiatives:

New Product Development - Product innovation remains a key driver of growth and we continue to innovate across our wider core product range. On NPD, we are expanding choice, accelerating innovation and advancing sustainability across our diverse product category portfolio. So far this year, six new core brick products have been introduced - primarily targeting the Specification market - supporting our focus on higher-end customer needs. Other Core product ranges are evolving with an emphasis on increased recycled content and lower embodied carbon. Major capital projects at Atlas and Nostell are also actively enabling new product development programmes across both core and diversified markets, helping us bring innovation to market at pace. We are also developing some exciting new modular façade products within Ibstock Futures to serve MMC markets and are engaged in commercial trials with a number of customers. The share of revenue from new and sustainable products remained above the Group's target of 20% in the first half.

Atlas - Our Atlas pathfinder factory is progressing well, and the team is ramping up production of our lowest carbon bricks to-date. The capacity and range at the new factory is extensive with multiple new products progressing through commissioning. Once at full capacity, the factory will produce 105 million bricks per annum. As our pathfinder factory, the team have piloted new efficiencies and technologies to deliver a reduction in carbon intensity and cost which could be rolled out across the wider factory network.

Also, continuing our 'pathfinder' approach, Atlas has been shortlisted - alongside partners - for the Government's HAR2 (Hydrogen Allocation Round 2) programme. The proposal includes a Green Hydrogen project at our Atlas factory, reinforcing our commitment to innovation in low-carbon manufacturing. With cutting-edge technology already in place, Atlas is currently delivering approximately 50% lower carbon emissions than the previous facility. If the first phase of the Green Hydrogen project progresses, we expect to increase that reduction to around 75%, with further potential as our hydrogen strategy continues to evolve.

Nostell - Our two investments at the Nostell facility are progressing well. The first is ramping up and is focused on accelerating the pace and scale of slip production, using first-of-its-kind cutting technology in the UK. The new automated cutting line in Nostell progressed operations in the first half this year and delivered a positive profit contribution during the period. The second investment, a larger-scale project, is on track for commissioning at the end of this year and features a cutting-edge ceramic facades factory that will serve to meet pressing UK building needs. The market response to the first investment has been positive and reinforces our belief that the facades market will be a highly attractive growth segment for the Group over the medium term.

Calcined Clay - Cement and concrete currently contribute around 8% of total global CO2 emissions. Calcined clay presents the potential to dramatically reduce concrete's carbon emissions by around 40% versus ordinary Portland cement. The technology to produce calcined clay is now established elsewhere in the world, but our clay footprint presents Ibstock with the potential to be the first industrial-scale producer in the UK. Having concluded extensive technical work over the last few years, the Group is now at an important stage to crystallise the potential from this opportunity. Detailed discussions with potential partners are underway, with a commercial roadmap expected to be concluded by the end of that process.

Grow

Sector Leading Sustainability and Social Impact

Ibstock is recognised as a market-leader in its sustainability approach and this remains a core part of our strategy. We are now halfway through our ESG 2030 strategy commitments and as a result, during the first half, we conducted a materiality exercise to review and refine our approach, which validated our strategy and targets. At the same time, we recognise that the question of sustainability must be viewed through a wider lens and, accordingly, our strategy will now be complemented and enhanced by an additional focus on social impact. This offers a gateway to wider market opportunities such as our expansion into social housing and aligns our values with the evolving needs of customers, as well as enabling a sense of pride for colleagues through our focus on placemaking principles within communities.

People and Culture

A commitment to the values of courage, trust and teamwork lies at the heart of Ibstock's culture. Building on this, we want to be a champion within our industry for developing people and culture. We are proud of our well established Early Careers and Talent Management programmes, and have augmented these through the launch during the first half of an all-employee development offering and further ongoing upskilling opportunities.

Medium term targets on track

With both our core and diversified platforms now in place to meet growing demand, and with the market recovery progressing, the Group has increased confidence in delivering its committed revenue target of £600 million, with an ambition to grow beyond that. 

Our conviction is underpinned by the Government's commitment to accelerate new housing activity over the current Parliament, facilitated by investment and reform in planning; and its recent commitment to social housing, with a new 10-year £39 billion Social and Affordable Homes Programme.

The Group has an opportunity to establish leadership in supporting modern construction markets by bringing new products and systems to market, to help address a pressing need for housing. Investment in innovation will be a significant driver of growth as Ibstock Futures ramps up, and the Nostell plant is on track to produce an unrivalled product offering with its ceramic facades proposition. The pace of new product launches within the core business is also driving incremental growth in the core business. The Atlas plant is pioneering more sustainable production technologies and delivering the UK's first externally-verified carbon neutral bricks. Overall, we continue to expect revenues from new and more sustainable products to represent at least 20% of total revenues over the years ahead.

We retain a strong conviction in the attractive fundamentals of our business, and believe that our well-invested assets, talented and committed people, and leading market positions will deliver an uplift in margins and returns over the years ahead. Adjusted EBITDA1 margin growth will be underpinned by an ongoing focus on operational efficiency, and the steps to implement best practice production principles throughout the network. There will also be a significant positive impact on profitability from operational leverage with volume recovery alongside an improvement in pricing and mix if, as expected, our markets return to normalised levels over the years ahead.

Accordingly, we continue to target an adjusted EBITDA1 margin in the core Clay business of more than 35%, at least in line with historical levels, and for Group margins of at least 28%.

Outlook for 2025

We have had an encouraging start to the second half of the year. We anticipate growth in sales volumes in the second half compared to the comparative period, although we remain mindful of broader macroeconomic risk and the potential impact this may have on our markets. We expect pricing to remain stable, with an improvement in sales mix over time as growth within product range, channels and regions rebalance to more typical levels.

With a clear focus on driving efficiencies through the factory network alongside the disciplined management of indirect cost, we expect profitability to improve in the second half, as productivity and operational efficiency ramp up.

As a result, the Group expects to achieve adjusted EBITDA1 in H2 ahead of the comparative period and continues to expect adjusted EBITDA1 for the full year to be in the range of £77 million to £ 82 million.

Ibstock continues to benefit from a solid balance sheet and well-invested factory network. With recent actions to add core capacity to its network, and its strategic investments in sector innovation, the Group is well-placed to support the significant growth in new build housing activity in the UK in the years ahead.

Chief Financial Officer's report

Introduction

The Group delivered strong growth in revenues in the first half of the year, against the backdrop of increasing market demand. In order to ensure we have the capacity to meet continuing market growth, we took steps during the period to reactivate productive capacity, although in doing so, incurred incremental costs in the first half, which impacted profitability in the Clay division. Pricing progression within the core business was modest, reflecting a more competitive market backdrop, which limited our ability to pass through cost inflation. Whilst performance in the first half fell short of our initial expectations, we are focused on driving efficiencies through the factory network alongside an intense focus on indirect cost, and expect profitability to improve in the second half of the year.

Group statutory profit before taxation of £7.7 million (2024: £11.8 million) reflected the lower trading performance, as well as an exceptional cost1 of £2.8 million (2024: cost of £3.2 million) relating to site closure and decommissioning activities, principally related to the run-off of GRC manufacturing operations, following the announcement of its closure in the second half of the 2024 year.

With continued strong progress against our strategic investment plans, we deployed around £21 million of capital investment (2024: £24 million) to sustain our networks and drive future growth in both core and diversified construction markets. We continue to manage our balance sheet carefully through the recent market weakness, and expect the cash generation profile of the business to provide additional scope for growth investment as well as incremental shareholder returns as conditions improve.

Alternative performance measures

This results statement contains alternative performance measures ("APMs") to aid comparability and further understanding of the financial performance of the Group between periods. A description of each APM is included in Note 3 to the financial statements. The APMs represent measures used by management and the Board to monitor performance against budget, and certain APMs are used in the remuneration of management and Executive Directors. It is not believed that APMs are a substitute for, or superior to, statutory measures.

Group results

The table below sets out segmental revenue, profit/(loss) before tax and adjusted EBITDA1 for the period

1 Alternative Performance Measures are described in Note 3 to the results announcement

2 Clay segment incorporates Futures business performance, and excludes exceptional cost1 of £2.8 million (2024: £3.2 million)

Due to rounding, numbers presented may not add up precisely to the totals provided and percentages may not precisely align to the reported figures

Revenue

Group revenue for the six months ended 30 June 2025 increased by 9% to £193.4 million (2024: £178.2 million) driven by strong volume growth, particularly within the Clay division. Pricing progression compared to the comparative period was modest, reflecting a competitive market environment. Revenue was also adversely impacted by sales mix, with stronger than average growth within the new-build residential market and a relatively more subdued RMI sector.

In our Clay division, revenues of £133.5 million represented an increase of 12% on the prior year period (2024: £119.4 million). Overall, UK brick market deliveries including imports for the five months ended 31 May 2025 were 13% above the comparative period, with the Group's performance ahead of this level. Encouragingly, the contribution from Ibstock Futures to this revenue number increased to around £5.2 million (2024: £3.9 million).

In our Concrete division, reported revenue increased by 2% year-on-year to £59.9 million (2024: £58.8 million). Performance reflected solid volume growth across residential product categories, offset by rail volumes which were materially lower year-on-year, as activity levels in UK rail infrastructure markets fell to historically low levels.

Adjusted EBITDA1

Management measures the Group's operating performance using adjusted EBITDA1. Adjusted EBITDA1 decreased by £2.2 million to £35.5 million in H1 2025 (H1 2024: £37.7 million). Performance reflected higher than expected incremental costs, as we reactivated a proportion of our clay capacity to ensure that we are ready to meet recovering demand, as well as a competitive market backdrop which limited our ability to pass through cost inflation.

Within the Clay division, adjusted EBITDA1 totalled £32.8 million (2024: £34.2 million), representing an adjusted EBITDA margin1 of 24.6% (2024: 28.6%) reflecting lower margins within the core Clay business for the reasons outlined above, partly mitigated by an improvement in financial performance within the Ibstock Futures business.

The clay division recognised a net cost of £1.5 million (2024: cost of £3.3 million) in respect of Ibstock Futures, underpinned by underlying revenue growth of over 50% as all product lines delivered progress. The Group has continued to invest in enabling research, development and marketing capability to support future revenue opportunities, including on calcined clay.

Within our Concrete division, adjusted EBITDA1 decreased to £6.0 million (2024: £7.5 million), as the division was impacted by materially lower sales volumes in our rail product categories. The adjusted EBITDA margin1 of 9.9% in concrete was below the 2024 level of 12.7%, with the reduction in margin principally reflecting an adverse sales mix effect, with lower volumes in the rail infrastructure sector (which represents a higher-margin part of the Concrete division).

Central costs decreased marginally to £3.2 million (2024: £4.0 million) reflecting lower charges arising from incentive plans.

Looking forwards, the Group remains focused on increasing operational efficiency across the factory network and tightly managing indirect cost.

Adjusted EBIT1

In order to focus on a more comprehensive measure of operating performance, and in line with a key remuneration measure for senior management, the Group has also started to measure and report the Group's performance using adjusted EBIT1. Adjusted EBIT1 is defined as adjusted EBITDA1 less underlying depreciation and amortisation.

For the six months to 30 June 2025, adjusted EBIT1 reduced to £20.7 million (2024: £23.1 million) reflecting reduced trading profits and a modest increase in underlying depreciation and amortisation to £14.8 million (2024: £14.6 million).

Exceptional items1

Based on the application of our accounting policy for exceptional items1, certain income and expense items have been excluded in arriving at adjusted EBITDA1 to aid shareholders' understanding of the Group's underlying financial performance.

The amounts classified as exceptional1 in the period totalled a net cost of £2.8 million (2024: £3.2 million cost), associated with decommissioning activities and other costs associated with closed sites as well as costs directly arising from our decision to close the Glass Reinforced Concrete (GRC) business.

Further details of exceptional items1 are set out in Note 5 of the financial statements.

Finance costs

Net finance costs of £4.8 million were above the level of the prior year (2024: £2.7 million), reflecting an increased interest cost on our bank borrowings as the average borrowing on our £125 million Revolving Credit Facility (RCF) increased over the comparative period, and the reduction in non-cash interest income arising from the unwind of discounted provisions.

Profit before taxation

Group statutory profit before taxation was £7.7 million (2024: £11.8 million), reflecting the lower trading performance, as well as an exceptional cost1 of £2.8 million (2024: cost of £3.2 million) relating to site closure and decommissioning activities, as detailed above.

Taxation

The Group recorded a taxation charge of £2.1 million (2024: £3.2 million) on Group pre-tax profits of £7.7 million (2024: £11.8 million), resulting in an effective tax rate ("ETR") of 26.8% (2024: 27.1%) compared with the standard rate of UK corporation tax of 25.0% (2024: 25.0%).

The adjusted ETR1 (excluding the impact of the deferred tax rate change and exceptional items) was 26.2% (2024: 26.2%).

We continue to expect the adjusted ETR1 for the 2025 year to be around 26%, in line with the rate reported in the first half.

Earnings per share

Group statutory basic earnings per share (EPS) decreased to 1.4 pence in the six months to 30 June 2025 (2024: 2.2 pence) primarily as a result of reduced trading performance in the period.

Group adjusted basic EPS1 of 3.0 pence per share decreased from 3.5 pence last year, reflecting reduced adjusted EBIT1. In line with prior years, our adjusted EPS1 metric removes the impact of exceptional items1, the fair value uplifts resulting from our acquisition accounting and non-cash interest impacts, net of the related taxation charges/credits. Adjusted EPS1 has been included to provide a clearer guide as to the underlying earnings performance of the Group. A full reconciliation of our adjusted EPS1 measure is included in Note 7.

Table 1: Earnings per share

Cash flow and net debt1

Adjusted operating cash flow increased by £2.3 million to £11.3 million (2024: £9.0 million), reflecting a decrease in adjusted EBITDA1, mitigated by a lower working capital outflow of £12.4 million (2024: outflow of £19.4 million).

The working capital outflow in the period reflected the typical seasonal build in the level of trade receivables. Inventories increased modestly during the period as we built a base level of finished goods inventories at the recently commissioned Atlas factory to support customer service over the coming months.

Adjusted net interest paid in the six months to 30 June 2025 increased marginally to £4.6 million (2024: £4.2 million), in line with our expectations. The increase compared to the comparative period reflected an increase in average borrowings.

Tax payments totalled £2.3 million (2024: £0.5 million) as the benefit from the accelerated write down on qualifying capital expenditure began to reduce with our organic growth projects nearing completion.

Other cash outflows of £4.9 million (2024: £4.6 million outflow) related to operating lease payments. The Group purchased no carbon emission credits in the period (H1 2024: none).

With Adjusted Operating Cash Flows1 in the period increasing marginally from the prior period, the cash conversion1 percentage increased to 32% (from 24% in 2024), reflecting a reduced investment in working capital versus the prior period.

Adjusted free cash flow1 in the period totalled an outflow of £9.6 million (2024: £15.5 million outflow). Capital expenditure of £20.9 million decreased by £3.5 million compared to the comparative period (2024: £24.4 million), as major project expenditure reduced, as anticipated, and sustaining capital continued to be tightly managed. Capital expenditure comprised around £9 million of sustaining expenditure, £1 million on the Atlas and Aldridge redevelopments, around £10 million on the Nostell brick slip investments and £1 million on smaller growth projects in the Concrete division.

For the full year, we continue to expect total capital expenditure of around £40 million with sustaining capital expenditure of around £20 million, and growth capital expenditure of £20 million.

Table 2: Cash flow (non-statutory)

1 Alternative Performance Measures are described in Note 3 to the consolidated financial statements. 2 Other includes operating lease payments

The table above excludes cash outflows relating to exceptional items1 of £3.2 million in 2025 (2024: £ 7.7 million) arising from the settlement of severance and certain decommissioning activities arising in the period.

Net debt1 (borrowings less cash) at 30 June 2025 totalled £144.5 million (31 December 2024: £121.6 million; 30 June 2024: £137.8 million). The movement during the period reflected the seasonal increase in working capital combined with £20.9 million of capital expenditure as the Group continued to invest in its growth projects.

We disposed of the first tranche of a closed site at Ravenhead in the North West during the period, recognising cash proceeds of £3 million (and generating a profit on disposal of just over £1.5 million). We continue to expect to realise proceeds of around £30 million from the land estate over the coming 3 to 5 years.

We expect to generate positive cash flows in the second half of the year, and for the closing net debt1 number at 31 December 2025 to be slightly above the prior year level, reflecting our revised profit guidance for the 2025 year set out in our 11 June trading update.

The Group's borrowings contain leverage covenants of no greater than 3.0x. Based on the covenant definition, leverage at 30 June 2025 totalled 1.9 times, comfortably below the covenant limit. At the balance sheet date, the Group had £58 million of undrawn committed facilities.

Adjusted return on capital employed1

Adjusted return on capital employed1 (adjusted ROCE1) decreased to 7.0% (2024: 8.0%) driven by reduced adjusted EBIT1 on a higher level of capital employed. The increase in capital employed compared to the comparative period principally reflected the incremental investment in organic growth projects.

Capital allocation

The Group's capital allocation framework remains consistent with that laid out in 2020, with the Group committed to allocating capital in a disciplined and dynamic way.

Our capital allocation framework is set out below:

Our framework remains underpinned by our commitment to maintaining a strong balance sheet, and we will look to maintain leverage at between 0.5 and 1.5 times net debt1 to adjusted EBITDA1 excluding the impact of IFRS 16, through the cycle.

Dividend

The interim dividend has been maintained in line with the prior year period at 1.5 pence per share (2024: 1.5 pence), reflecting the Board's continued confidence in the prospects for the business. The dividend will be paid on 15 September 2025 to shareholders on the register on 22 August 2025.

Pensions

At 30 June 2025, the defined benefit pension scheme ("the scheme") was in an actuarial accounting surplus position of £7.0 million (31 December 2024: surplus of £7.8 million; 30 June 2024: surplus of £8.8 million). Applying the valuation principles set out in IAS19, at the half year end the scheme had assets of £320.9 million (31 December 2024: £330.9 million; 30 June 2024: £341.4 million) against scheme liabilities of £313.9 million (31 December 2024: £323.1 million; 30 June 2024: £332.6 million).

On 20 December 2022, the Scheme completed a full buy-in transaction with a specialist third-party provider. Together with the partial buy-in transaction completed with the same counterparty in 2020, this transaction insured the significant majority of the Group's defined benefit liabilities.

Climate Change & TCFD

As a long-term, energy intensive business, a commitment to environmental sustainability and social progress is central to our purpose. In 2022 we launched the Group's ESG 2030 Strategy and remain committed to this approach. This strategy provides the framework for actions across three key areas:

At the same time, we have identified material transition and physical risks associated with climate change and considered the impacts of these on the financial performance and position of the Company, through our viability scenario assessment, our impairment testing and assessment of the useful economic lives of our assets. We have also assessed the resilience of our business model as part of our strategic planning process. The outputs from these activities are detailed in our TCFD disclosures contained in the 2024 Annual Report and Accounts.

The Group remains committed to increasing the transparency of reporting around climate impacts, risks, and opportunities. This year we continued to enhance our disclosure to ensure full compliance with the recommendations of the Task Force for Climate-related Financial Disclosures (TCFD) and those of Climate-related Financial Disclosure (CFD).

Related party transactions

Related party transactions are disclosed in Note 15 to the consolidated financial statements. During the current and prior year there have been no material related party transactions.

Subsequent events

Except for the proposed interim ordinary dividend, no further subsequent events requiring either disclosure or adjustment to these financial statements have arisen since the balance sheet date.

Going concern

The Directors are required to assess whether it is reasonable to adopt the going concern basis in preparing the financial statements.

In arriving at their conclusion, the Directors have given due consideration to whether the funding and liquidity resources are sufficient to accommodate the principal risks and uncertainties faced by the Group.

Having considered the outputs from this work, the Directors have concluded that it is reasonable to adopt a going concern basis in preparing the financial statements. This is based on an expectation that the Company and the Group will have adequate resources to continue in operational existence for at least twelve months from the date of signing these accounts.

Further information is provided in note 2 of the financial statements.

Principal Risks and Uncertainties

This section should be read in conjunction with the rest of this Half Year Statement as this provides further information concerning events that have occurred during the first six months of the financial year.

The Group's activities mean it is exposed to a variety of risks and uncertainties which could, either separately or in combination, have a material impact on the Group's performance and shareholder returns. These risks and uncertainties relate to: Regulatory and compliance, People and talent management, Cyber and information systems, Heath, Safety and environment (HSE), Economic conditions, Financial risk management, Customer and industry risk, Climate change and Major project delivery.

The Board assesses and monitors the key risks impacting the business and an explanation of the Group's approach to risk management is set out in Ibstock Plc's Annual Report 2024, a copy of which is available on the Group's corporate website, www.ibstock.co.uk.

The Group continues to be exposed to unfavourable macro-economic conditions, subdued consumer sentiment and a prolonged recovery in UK residential and infrastructure construction markets. These areas impact a number of the Group's principal risks including Economic conditions, Customer and industry risk, People and talent management and Financial risk management.

Having undertaken a comprehensive review during the first half of the 2025 year, the Board has concluded that the Group's existing principal risks and uncertainties remain unchanged from those set out in its 2024 Annual Report, and that there continue to be clear actions in place to appropriately mitigate these risks.

A full report on the Group's principal risks will be included with the FY 2025 annual report and accounts. The Board will continue to monitor the Group's principal risks during the remaining six months of the year, with a focus on Economic conditions, Customer and industry risk, People and talent management, Financial risk management, alongside Cyber security, Major project delivery and HSE.

1Alternative performance measures are described in Note 3 to the interim financial statements.

Statement of directors' responsibilities in relation to the half-yearly financial report

The directors confirm that to the best of their knowledge:

By order of the Board:

*Alternative performance measures are described in Note 3 to the interim financial statements.

1. AUTHORISATION OF FINANCIAL STATEMENTS

Ibstock Plc ("Ibstock" or "the Group") is a manufacturer of clay bricks and concrete products with operations in the United Kingdom. Ibstock Plc is a public company limited by shares, which is incorporated and registered in England. The registered office is Leicester Road, Ibstock, Leicestershire, LE67 6HS and the company registration number is 09760850.

The interim condensed consolidated financial statements of Ibstock Plc for the six months ended 30 June 2025 were authorised for issue in accordance with a resolution of the Directors on 5 August 2025. All disclosed documents relating to these results are available on the Group's website at www.ibstock.co.uk.

Publication of non-statutory accounts

The financial information contained in the interim statement does not constitute the Group's statutory accounts as defined in section 434 of the Companies Act 2006. The comparative figures for the financial year ended 31 December 2024, which have been extracted from the statutory accounts for that year, are not the Company's statutory accounts for that financial year. Statutory accounts for the year ended 31 December 2024 were approved by the Board of Directors on 4 March 2025. Those accounts have been reported on by the Company's auditor and delivered to the Registrar of Companies. The report of the auditor was (i) not qualified, (ii) did not include a reference to any matters to which the auditor drew attention by way of emphasis of matter without qualifying their report, and (iii) did not contain a statement under section 498 (2) or (3) of the Companies Act 2006.

2. BASIS OF PREPARATION

The interim condensed consolidated financial statements for the six months ended 30 June 2025 have been prepared in accordance with UK-adopted International Accounting Standard 34 'Interim Financial Reporting' as contained in UK-adopted IFRS.

They do not include all of the information and disclosures required in the annual financial statements, and should be read in conjunction with the Group's Annual Report and Accounts as at 31 December 2024, which have been prepared in accordance with UK-adopted International Accounting Standards (IAS).

The condensed consolidated financial statements are presented in Sterling and all values are rounded to the nearest thousand, except where otherwise indicated.

All accounting policies applied by the Group within the interim condensed consolidated financial statements are consistent with those applied by the Group in its consolidated financial statements for the year ended 31 December 2024, except in respect of taxation, which is based on the expected effective tax rate that would be applicable to expected annual earnings.

The following new amended standard and interpretations have been adopted in the preparation of the condensed consolidated financial statements:

• Lack of Exchangeability (Amendments to IAS 21).

The adoption of the standard and interpretations listed above has not led to any changes to the Group's accounting policies or had any other material impact on the financial position or performance of the Group.

In preparing the interim condensed consolidated financial statements the Group has assessed the critical accounting estimates and judgements applied in the preparation of the consolidated financial statements for the year ended 31 December 2024. The areas of critical judgement relating to exceptional items (see Note 5), significant source of estimation uncertainty regarding the Group's pension scheme liability valuation assumptions surrounding future changes in discount rates, inflation, the rate of increase in pensions in payment and life expectancy (see Note 12) and the Group's future cash flows expected to arise from Cash Generating Units (CGUs) assumptions related to long-term industry demand (see Note 9) are still considered critical to the preparation of the interim financial statements for the period ended 30 June 2025.

Going concern

Despite the macroeconomic downturn, there are initial positive external market indicators with inflation and mortgage rates stabilising, and proposed housing and planning policy changes which could increase both housing construction activity and effective demand for housing looking forward. Management does not believe that the going concern basis of preparation represents a significant judgement.

The Group's financial planning and forecasting process consists of a budget for the next year followed by a medium-term projection. The Directors have reviewed and robustly challenged the assumptions about future trading performance, operational and capital expenditure and debt requirements within these forecasts including the Group's liquidity and covenant forecasts, and stress testing within their going concern assessment.

In arriving at their conclusion on going concern, the Directors have given due consideration to whether the funding and liquidity resources above are sufficient to accommodate the principal risks and uncertainties faced by the Group, particularly those relating to economic conditions and operational disruption. The strategic report sets out in more detail the Group's approach and risk management framework.

Group forecasts have been prepared which reflect both actual conditions and estimates of the future reflecting macroeconomic and industry-wide projections, as well as matters specific to the Group.

The Group has financing arrangements comprising £100 million of private placement notes with maturities between November 2028 and November 2033, and a £125 million RCF maturing in November 2026. The Group believes it would be able to refinance these arrangements as they fall due or obtain equivalent alternative sources of finance. At 30 June 2025 the RCF was £67 million drawn.

Covenants under the Group's RCF and private placement notes require leverage of no more than 3 times net debt to adjusted EBITDA1, and interest cover of no less than 4 times, tested bi-annually at each reporting date with reference to the previous 12 months. At 30 June 2025 covenant requirements were met with significant headroom.

The key uncertainty faced by the Group is the industry demand for its products in light of macroeconomic factors. Accordingly, the Group has modelled financial scenarios which see reduction in the industry demands for its products thereby stress testing the Group's resilience. For each scenario, cash flow and covenant compliance forecasts have been prepared. In the most severe but plausible scenario industry demand for Clay products is modelled to be around 40% lower than 2022 in the second half of 2025, which is materially worse than the sales reduction seen in 2024, recovering to around 30% lower than 2022 in 2026. Concrete products are modelled to be 40% lower than 2022 in the second half of 2025 year, recovering to around 30% lower than 2022 in 2026.

In the severe but plausible scenario, the Group has sufficient liquidity and headroom against its covenants, with covenant headroom for FY 2025 expressed as a percentage of annual adjusted EBITDA1 being around 10%.

In addition, the Group has prepared a reverse stress test to evaluate the industry demand reduction at which it would be likely to breach the debt covenants, before any further mitigating actions are taken. This test indicates that, at a reduction of 44% in sales volumes versus 2022 in H2 2025, 45% in H1 2026 and 44% in FY 2026, the Group would be at risk of breaching its covenants.

The Directors consider this to be a highly unlikely scenario, and in the event of an anticipated covenant breach, the Group would seek to take further steps to mitigate, including the disposal of valuable land and building assets and additional restructuring steps to reduce the fixed cost base of the Group.

Having taken account of the various scenarios modelled, and in light of the mitigations available to the Group, the Directors are satisfied that the Group has sufficient resources to continue in operation for a period of not less than 12 months from the date of this report. Accordingly, the consolidated financial information has been prepared on a going concern basis.

3. ALTERNATIVE PERFORMANCE MEASURES

Alternative Performance Measures ("APMs") are used within the management report where management believes it is necessary to do so in order to provide further understanding of the financial performance of the Group. Management uses APMs in its own assessment of the Group's performance and in order to plan the allocation of capital and other resources. Certain APMs are also used in the remuneration of management and Executive Directors.

APMs serve as supplementary information for users of the financial statements and it is not intended that they are a substitute for, or superior to, statutory measures. None of the APMs are outlined within IFRS and they may not be comparable with similarly titled APMs used by other companies.

Exceptional items

The Group presents as exceptional at the foot of the Group's Condensed consolidated income statement those items of income and expense which, because of their materiality, nature and/or expected infrequency of the events giving rise to them, merit separate presentation to allow users of the financial statements to understand further elements of financial performance in the year. This facilitates comparison with future periods and the assessment of trends in financial performance over time.

Details of all exceptional items are disclosed in Note 5.

Adjusted EBIT, Adjusted EBITDA and Adjusted EBITDA margin

Adjusted EBIT represents earnings before interest and taxation and is adjusted to exclude exceptional items and the incremental depreciation and amortisation arising from historic fair value uplifts.

Adjusted EBITDA is earnings before interest, taxation, depreciation and amortisation and is adjusted to exclude exceptional items. Adjusted EBITDA margin is Adjusted EBITDA expressed as a proportion of revenue.

The Directors regularly use Adjusted EBIT and Adjusted EBITDA margin as key performance measures in assessing the Group's profitability. The measures are considered useful to users of the financial statements as they represent common APMs used by investors in assessing a company's operating performance, when comparing its performance across periods as well as being used in the determination of Directors' variable remuneration.

A full reconciliation of Adjusted EBIT and Adjusted EBITDA is included at the foot of the Group's Condensed consolidated income statement within the consolidated financial statements. Adjusted EBITDA margin is included within Note 4.

Adjusted EPS

Adjusted EPS is the basic earnings per share adjusted for exceptional items, fair value adjustments being the amortisation and depreciation on fair value uplifted assets and non-cash interest, net of associated taxation on the adjusting items.

The Directors have presented Adjusted EPS as they believe the APM represents useful information to the user of the financial statements in assessing the performance of the Group, when comparing its performance across periods, as well as being used in the determination of Directors' variable remuneration. Additionally, the APM is considered by management when determining the proposed level of ordinary dividend. A full reconciliation is provided in Note 7.

Net debt and Net debt to Adjusted EBITDA ("leverage") ratio

Net debt is defined as the sum of cash and cash equivalents less total borrowings at the balance sheet date. This does not include lease liabilities arising upon application of IFRS 16.

The Net debt to Adjusted EBITDA ratio definition removes the operating lease expense benefit within Adjusted EBITDA generated from IFRS16 compared to IAS 17.

The Directors disclose these APMs to provide information as a useful measure for assessing the Group's overall level of financial indebtedness and when comparing its performance and position across periods.

A full reconciliation of the net debt to Adjusted EBITDA ratio (also referred to as 'leverage') is set out below:

Adjusted Return on Capital Employed (Adjusted ROCE)

Adjusted Return on Capital Employed ("Adjusted ROCE") is defined as Adjusted earnings before interest and taxation as a proportion of the average capital employed (defined as net debt plus equity excluding the pension surplus). The average is calculated using the period end balance and corresponding preceding reported period end balance (year end or interim).

The Directors disclose the Adjusted ROCE APM in order to provide users of the financial statements with an indication of the relative efficiency of capital use by the Group over the period, assessing performance between periods as well as being used within the determination of executives' variable remuneration.

The calculation of Adjusted ROCE is set out below:

Average capital employed figures are derived using the following closing balance sheet values:

Adjusted effective tax rate

The Group presents an adjusted effective tax rate ("Adjusted ETR") within its Financial Review. This is disclosed in order to provide users of the financial statements with a view of the rate of taxation borne by the Group adjusted for exceptional items (defined above), fair value adjustments being the amortisation and depreciation on fair value uplifted assets, non-cash interest and changes in taxation rate on deferred taxation.

A reconciliation of the adjusted ETR to the statutory rate of taxation in the UK is set out below.

Cash flow related APMs

The Group presents an adjusted cash flow statement within its Financial Review. This is disclosed in order to provide users of the financial statements with a view of the Group's operating cash generation before the impact of cash flows associated with exceptional items (as set out in Note 5) and with the inclusion of interest, lease payment and non-exceptional property disposal related cash flows.

The Directors use this APM table to allow shareholders to further understand the Group's cash flow performance in the period, to facilitate comparison with future years and to assess trends in financial performance. This table contains a number of APMs, as described below and reconciled in the following table:

Adjusted change in working capital

Adjusted change in working capital represents the statutory change in working capital adjusted for cash flows associated with exceptional items arising in the period of £0.4 million (30 June 2024: £4.2 million; 31 December 2024: £3.1 million).

Adjusted operating cash flow

Adjusted operating cash flows are the cash flows arising from operating activities adjusted to exclude cash flows relating to exceptional items of £3.2 million (30 June 2024: £7.7 million; 31 December 2024: £11.2 million) but stated after cash flows associated with: interest income; proceeds from the sale of property, plant and equipment; purchase of intangibles; and lease payments reclassified from investing or financing activities totalling £2.0 million (30 June 2024: £4.7 million; 31 December 2024: £9.0 million).

Cash conversion

Cash conversion is the ratio of Adjusted operating cash flow (defined above) to Adjusted EBITDA (defined above). The Directors believe this APM provides a useful measure of the Group's efficiency of cash management during the period.

Adjusted free cash flow

Adjusted free cash flow represents Adjusted operating cash flow (defined above) less total capital expenditure. The Directors use the measure of Adjusted free cash flow as a measure of the funds available to the Group for the payment of distributions to shareholders, for use within mergers and acquisitions (M&A) activity and other investing and financing activities.

4. SEGMENT REPORTING

The Directors consider the Group's reportable segments to be the Clay and Concrete divisions.

The key Group performance measure is adjusted EBITDA, as detailed below, which is defined in Note 3. The tables, below, present revenue and adjusted EBITDA and profit/(loss) before taxation for the Group's operating segments.

Included within the unallocated and elimination columns in the tables below are costs including share based payments and Group employment costs. Unallocated assets and liabilities are pensions, taxation and certain centrally held provisions. Eliminations represent the removal of inter-company balances. Transactions between segments are carried out at arm's length. There is no material inter-segmental revenue and no aggregation of segments has been applied.

For all periods presented, the activities of Ibstock Futures were managed and reported as part of the Clay division. Consequently, the position and performance of Ibstock Futures for all periods has been classified within the Clay reportable segment.

There were £0.8 million of bill and hold sales included within the Clay segment's revenue during the six months ended 30 June 2025. At 30 June 2025, together with the £0.3 million of inventory from the bill and hold sales in the prior period £1.1 million inventory related to bill and hold sales remained on the Clay division's premises and £0.2 million on Concrete division's premises related to prior period bill and hold sales. During the current period, two customers accounted for greater than 10% of Group revenues, representing sales of £29.7 million and £19.3 million respectively. Also included within the Clay segment's Adjusted EBITDA was a £1.6 million profit from the partial disposal of the Ravenhead land during the period.

There were no bill and hold sales included within revenue during the six months ended 30 June 2024. At 30 June 2024, £0.7 million of inventory remained on the Clay division's premises and £0.1 million on Concrete division's premises related to prior period bill and hold sales. During the period, one customer accounted for greater than 10% of Group revenues with £27.2 million of sales across the Clay and Concrete divisions.

5. EXCEPTIONAL ITEMS