Business Review and First Half Slowdown Prompt New Strategy from Ibstock
A 12-month period of increased maintenance activity is planned to ensure that Ibstock’s factories can operate at sustainable levels to meet continued increasing demand.
Ibstock plc recently announced an update on trading and its outlook for the year. Demand from the group’s UK brick customers continues to be strong, particularly from the new housing sector, and market fundamentals remain favorable. The group’s UK brick factories have been producing at, or close to, full production capacity for an extended period. In recent months, however, particularly in July, production has been lower than expected. Despite corrective measures, output (and therefore cost recovery) in the second half of the year is now anticipated to be below expectations.
A 12-month period of increased maintenance activity is now planned to ensure the factories can operate at sustainable levels to meet continued increasing demand. The group’s new brick factory in Leicestershire is outside the scope of these measures and is expected to be fully commissioned by the end of 2018, as planned.
“Demand in our UK brick markets is robust and the outlook for our UK Clay business remains encouraging, supported by the ongoing need for new housing,” said Joe Hudson, CEO. “However, following my appointment as CEO, the group has completed a review of its brick manufacturing assets which has identified a number of measures that are required to sustain the quality and range of our production output. While the resulting additional maintenance shutdowns and extra spending on plant maintenance and refurbishment will have a short-term impact on our financial performance, we firmly believe that it is the right thing to do for our customers and to maximize long-term value for shareholders. We will be working closely with all customers to ensure we continue to meet their demand requirements over the second half.”
For more information, visit www.ibstockplc.com.