Ibstock shares slump as cut earnings outlook as trading deteriorates

Ibstock PLC on Monday warned it expects second-half performance to be materially below its previous expectations after weak trading in September and October.

Chief Executive Joe Hudson said: "Trading conditions deteriorated sharply during the third quarter, with weakness continuing into October. We have responded by reducing production to manage inventory, taking further cost action and maintaining tight control of cash. These production decisions create an additional near-term earnings headwind but are necessary to align output with demand."

In response, shares in the Leicestershire, England-based building products supplier plunged 12% to 70.60 pence each in London on Monday morning. The stock has dropped 48% in the last 12 months.

Ibstock now expects full-year adjusted earnings before interest, tax, depreciation and amortisation to be in the mid-GBP40 million range.

In August, the firm forecast a full-year outturn at "around the lower end" of market expectations, which Ibstock cited at the time as £59 million to £68 million. In 2025, Ibstock reported adjusted Ebitda of £71 million.

Ibstock said weak market conditions continued through September and October and as a result, Clay division brick sales in the third quarter were 22% below expectations.

To align output with lower demand and limit inventory build, the group has reduced production in the quarter by around 20% against the plans set out at the half year.

Lower fixed-cost absorption is expected to reduce adjusted Ebitda by around £6 million, in addition to the impact of lower sales volumes.

Ibstock said the introduction of the Your First Home support scheme by the UK government represents a "welcome and potentially meaningful" intervention for the housing market.

But it added while the announcement reinforces "confidence in the group's medium-term market outlook, the delay to its introduction until April 2027 is disappointing and has put additional pressure on near-term demand."

Ibstock said it is prioritising cash generation through "disciplined management of inventory, capital expenditure and discretionary costs."

It remains "confident that our strategic land assets, including calcined clay, will provide near term support to accelerate debt reduction."

In addition, Ibstock said commissioning of its ceramic facades factory at Nostell is progressing well and is expected to complete by the end of the year.

The facility will broaden its product offering and, as volumes build, is expected to generate attractive financial returns over the medium term, it said.

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