REG - Ibstock PLC - Q3 Trading Update

IbstockAnnouncement

18/10/2022 07:00

For best results when printing this announcement, please click on link below:
http://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20221018:nRSR1758Da&default-theme=true

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  (#_ftn1) .

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 substantially completed the £30 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  (#_ftnref1) 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 (mailto:rns@lseg.com)
 or visit
www.rns.com (http://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 (https://www.lseg.com/privacy-and-cookie-policy)
.   END  TSTGPGGUUUPPGBM