Ibstock plc - Actions taken after difficult first half

Davy Research
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It was a difficult first half for Ibstock although, as with other UK construction businesses, revenue trends have begun to improve. That said, Ibstock’s volumes in July were still 15-20% down year-on-year. The group has responded to the impact of COVID-19 by seeking to adjust its cost base; in Ibstock’s case, it is lowering employee numbers by around 15% which is expected to yield fixed cost savings of £20m next year. The group is also shutting circa 5% of its brick capacity. The measures taken will clearly help shield it from any protracted weakness in demand for its products. The longer-term prospects for the business remain sound, with Ibstock bolstered by the need for new housing along with UK government efforts in this regard.