TIDMIBST
RNS Number : 1758D
Ibstock PLC
18 October 2022
18 October 2022
Ibstock plc
Q3 Trading Update
Strong trading performance supported by robust demand and
resilient business model
Ibstock plc ('Ibstock' or the 'Group'), a leading UK
manufacturer of clay bricks and concrete products, announces a
trading update for the quarter ended 30 September 2022.
Highlights
-- Trading ahead of our expectations in the third quarter with
robust demand patterns and strong operational performance
-- Effective management of the cost base, including energy costs,
and resilience in our business model have supported performance
-- Expect to maintain strong control of costs, and retain our dynamic
pricing strategy against a backdrop of ongoing cost inflation
-- Board now expects FY22 performance to be above its previous
expectations
Trading update
The Group continued to trade well in the third quarter, with
demand patterns across the business remaining robust. The business
delivered a strong operational performance, with good fixed cost
management and consistent network reliability.
Overall, performance in the quarter was ahead of the
expectations we communicated at the time of the half-year
announcement in July 2022.
Clay
Sales volumes in the third quarter were marginally above the
comparative prior year period. Our energy price surcharge remained
in place, which enabled the recovery of cost inflation. Our energy
price risk management strategy continues to be effective in
mitigating significant volatility in energy markets: our energy
requirements are now well covered for the 2022 year, and we have
cover for 2023 approaching 50% of projected network needs.
The strategic growth investments at our Atlas and Aldridge
factories are progressing well and are on track to start
commissioning as expected from the end of 2023. These facilities
will provide the Group with efficient, low-cost capacity, support
the diversification of our unrivalled product range, and produce
the UK's first net-zero carbon brick [1] .
Concrete
Overall, performance was in line with expectations, with volumes
broadly similar to the comparative prior year period. Volumes of
walling stone were modestly above the comparative prior year
period, offset by slightly lower floor beam volumes. Following
operational challenges in the first half of the year, we have seen
encouraging improvement in our roof tile output with sequential
quarterly margin progression.
Futures
We have continued to make good progress in developing the
Ibstock Futures business during the quarter. The Futures leadership
team is now in place, ensuring the business is well placed to
accelerate the Group's entry into fast growth construction product,
solutions and technology markets.
Following the asset acquisition in H1, the integration of
Telling GRC is progressing well and as expected. During the third
quarter, we were pleased to strengthen further our capabilities
through the acquisition of Generix, a non-combustible façade
systems business. This acquisition represents a further strategic
step in broadening the range of façade systems offered within
Futures.
Balance sheet and capital allocation
The business delivered a strong free cash flow performance in
the third quarter, reflecting both the robust trading performance
and disciplined working capital management.
We have now s ubstantially completed the GBP30 million share
buyback announced in April 2022, with issued share capital having
reduced by around 4% to date. This return of capital is part of our
disciplined approach to capital allocation alongside our committed
growth investments. We have a clear path for growth and value
creation over the next five years, based on a combination of
investment within our core business and diversified growth
opportunities, which supports our medium-term financial
targets.
We have a strong balance sheet, with the ratio of Net Debt to
EBITDA for the 2022 year projected to remain towards the bottom end
of our target range, and efficient long-term debt financing with
attractive rates of interest. We remain confident in our ability to
support both further growth investment and additional shareholder
returns over the medium term.
Full year outlook
Whilst remaining mindful of the uncertain macroeconomic
environment, the resilience of our business model and the strength
of our performance in the third quarter of the year give us
confidence in the outlook for the full year. Accordingly, we now
expect performance for the 2022 year to be above our previous
expectations.
Joe Hudson, Chief Executive Officer, commented:
"Our strong trading in the first half of the year continued
through the third quarter, supported by robust demand across our
end markets. We remain focused on serving our customers, through
providing high quality, sustainable products and solutions to
create much-needed homes and spaces across the UK.
"We are making good progress in line with the strategy set out
in March, and have continued to invest in areas that support our
plans to capture growth opportunities across both our existing
markets and new, fast growth segments of the construction
sector.
"Whilst we remain mindful of the elevated macroeconomic
uncertainty, we now anticipate performance for the 2022 year to be
above our previous expectations."
Ibstock plc 01530 261 999
Joe Hudson, CEO
Chris McLeish, CFO
Citigate Dewe Rogerson
Holly Gillis + 44 (0) 7940 797 560
About Ibstock Plc
Ibstock plc is a leading UK manufacturer of clay bricks and a
diversified range of clay and concrete
products. Its principal products are clay bricks, brick
components, concrete roof tiles, concrete alternatives for stone
masonry, concrete fencing and pre -- stressed concrete
products.
The Group's two divisions are:
Ibstock Clay: The leading manufacturer by volume of clay bricks
sold in the United Kingdom. With 16
manufacturing sites Ibstock Brick has the largest brick
production capacity in the United Kingdom. It
operates a network of 18 active quarries located close to its
manufacturing plants. Ibstock Kevington
provides masonry and pre-fabricated component building
solutions, operating from 6 sites across the United Kingdom.
Ibstock Concrete: A leading manufacturer of concrete roofing,
walling, flooring and fencing products,
along with lintels and general concrete building products, with
14 manufacturing plants in the United Kingdom.
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.
[1] Scope 1 and 2 emissions
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
RNS may use your IP address to confirm compliance with the terms
and conditions, to analyse how you engage with the information
contained in this communication, and to share such analysis on an
anonymised basis with others as part of our commercial services.
For further information about how RNS and the London Stock Exchange
use the personal data you provide us, please see our Privacy
Policy.
END
TSTGPGGUUUPPGBM
(END) Dow Jones Newswires
October 18, 2022 02:00 ET (06:00 GMT)
Ibstock (LSE:IBST)
Historical Stock Chart
From Jun 2024 to Jul 2024
Ibstock (LSE:IBST)
Historical Stock Chart
From Jul 2023 to Jul 2024