Revenue Increases 3.3% for Ibstock in 2016 First Half
Ibstock plc recently announced its unaudited results for the six month period ended June 30, 2016.
Ibstock plc recently announced its unaudited results for the six month period ended June 30, 2016. Revenue was up 3.3% to £210 million (approximately $274.2 million), compared to £148.9 million (~ $194.5 million) in the first half of 2015. Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) was up 7.3% to £55.6 million (~ $72.6 million). Profit before taxation for the period was £37.9 million (~ $49.5 million), compared to £25.2 million (~ $32.9 million) in the same period last year. Earnings per share were £0.074 (~ $0.096) and interim dividends were£ 0.024 (~ $0.031) per share.
Ibstock has performed in line with the expectations set at the time of its AGM trading statement in May, with continued growth in underlying revenue and profit. A solid overall performance from UK operations has been supported by encouraging growth in revenue and profitability from U.S. business. The company continues to invest in its manufacturing base and is progressing the major capital projects in its UK clay and concrete businesses, which will reportedly position it to perform strongly in those markets as the investments are commissioned.
The UK businesses, which account for 82% of the company, achieved stable revenues of £172 million (~ $224.6 million), a 0.1% reduction compared to 2015. Adjusted EBITDA in the UK increased to £51.2 million (~ $66.9 million), a 1.5% increase on the prior year. Trading performance benefited from energy costs, which were lower than in the first half of 2015. Energy costs are not expected to be as favorable in the second half of 2016.
UK Clay product revenue was reduced by 3.8% on the equivalent period in 2015 to £125.4 million (~ $163.8 million). Although sales grew into the housebuilding sector, total brick volumes declined slightly, largely due to the industry-wide destocking of brick within the builders merchant and distributor supply chain that was first identified back in March, which also impacted on the product and pricing mix. Despite achieving price increases by channel in line with expectations, the change in channel and product mix reduced the overall price increase achieved to low single digits.
At Ibstock in Leicestershire, construction work on the capital investment in a new soft mud brick manufacturing plant, which will add 100 million to the company’s current brick capacity, reportedly is progressing well. The new plant is scheduled to commission in the second half of 2017 and will provide a highly competitive facility with the process flexibility to manufacture products across the spectrum of the existing Ibstock Brick soft mud product range, as well as allowing the development of new products.
UK Concrete revenue of £46.6 million (~ $60.9 million) showed an increase of 11.6%, with sales growth from both the Supreme and Forticrete businesses. Supreme benefited in particular from healthy demand for its products in the domestic landscaping RMI sector, while Forticrete continued to grow its sales into the new build housing sector.
Forticrete is currently progressing the construction of a new concrete roof tile line at Leighton Buzzard, which is on schedule for commissioning to be completed in the second half of 2016. The line will manufacture a new range of concrete tile to complete the Forticrete range and make the company a full range supplier to the new build housing sector. These new tile have been designed to be aesthetically superior and provide savings on installation costs against older competing designs. The full commercial launch of the new product range will take place in the first half of 2017.
The company’s U.S. business, which accounts for 18% of the group, performed strongly in the first half of 2016 with an increase in revenue of 9.7% (in constant currency) to £38 million (~ $49.6 million). Adjusted EBITDA increased to £4.4 million (~ $5.7 million), a 182% improvement in constant currency.
Unusually mild winter weather in the first quarter of 2016 enabled a strong start to the year, which was maintained as the gradual recovery of activity levels in key regional markets continued. With non-residential markets remaining steady, the growth in residential starts seen in 2015 has continued into the first half of 2016. The U.S. business has also continued to benefit from improving operational leverage and price increases that reflect a favorable product mix. U.S. operations benefited from foreign exchange movements, which increased revenue by £3.8 million (~ $5 million) and adjusted EBITDA by £0.4 million (~ $0.5 million).
For more information, visit www.ibstock.com.