Brickmaker buoyed by demand but warns high energy prices will continue into second half
Rising energy costs and the effects of the bad weather earlier this year dented brickmaker Ibstock鈥檚 first half earnings, the group reported today.
The firm鈥檚 adjusted Ebitda dipped by 2.2% to 拢58.4m in the six months to the end of June on turnover of 拢229.2m, up 1%, while pre-tax profit was up 31% at 拢50.9m, boosted in part by the sale of a former quarry in Bristol.
Higher gas costs hit Ebitda, with increases in the mid-teen percentages, and the group expected the rising price environment to continue into the second half.
But current demand for bricks remained robust, said chief executive Joe Hudson, notably from the new build housing sector, while overall market fundamentals remained favourable.
He added that following a business review the group鈥檚 UK brickmaking plants would undergo 12 months of increased maintenance activity 鈥渢o ensure the factories can operate at sustainable levels to meet continued increasing demand鈥�.
Hudson, who was appointed in April, said while the resulting shutdowns and extra spending on maintenance and refurbishment would have a short-term impact on the group鈥檚 financial performance such overhauls were necessary for the business.
Along with 23 quarries Ibstock operates 19 brick production plants across the UK, and Hudson said the commissioning of the new 100 million bricks-a-year production plant in Leicestershire, adding around 13% of capacity, was continuing as scheduled and would not be affected by the planned maintenance programme.
The group鈥檚 concrete business, which generated 拢50m of revenues in the first half, level with the same period last year, was hit by the bad weather early on in 2018 and less work going on in the repair and maintenance sector.
Ibstock said adjusted Ebitda for the year ended 31 December 2018 would be between 拢121m to 拢125m, with reported Ebita in the range of 拢130m to 拢134m.
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