TIDMIBST
RNS Number : 3839M
Ibstock PLC
21 January 2021
21 January 2021
Ibstock plc
Trading Update
Ibstock plc ('Ibstock' or the 'Group'), a leading UK
manufacturer of clay bricks and concrete products, today issues a
trading update for the year ended 31 December 2020.
Trading performance
Further to the third quarter trading update, announced on 28
October 2020, the Board is pleased to confirm that the Group saw a
continuation of the previously reported improving market trends
during the final quarter of 2020, with encouraging activity levels
in all key end-market segments. Against this backdrop the Group
traded well in the period, with solid clay brick sales volumes, and
concrete sales volumes modestly ahead of prior year levels.
Activity in the final quarter benefited from better than expected
demand in both new build housing and the Repairs, Maintenance and
Improvement (RMI) markets through our builders' merchant customers,
particularly in the latter part of the period. The strong recovery
in market conditions through the second half enabled the Group to
achieve revenues of around GBP315 million for the full year, down
by 23% compared with 2019, with second half performance down by
approximately 10% year on year.
The remaining cost and capacity actions from the restructuring
programme outlined in Q2, which were due to be delivered by the end
of 2020, were successfully implemented during the final quarter.
Together w ith the improved volume levels achieved during the final
quarter, this resulted in EBITDA margins for the final months of
the year in both divisions back close to the underlying levels
achieved in the prior year periods.
As a result of the strong trading performance in Q4, together
with the positive impact of the cost actions taken in the year, the
Group now expects to report adjusted EBITDA for 2020 modestly above
the previous guidance of GBP50 million given in the trading update
of 28 October 2020.
Financial position
Cash flow performance for the year was materially ahead of
expectations, with closing net debt(1) of approximately GBP70
million, compared to GBP85 million as at 31 December 2019, and
GBP103 million reported at 30 June 2020. Cash flow performance
benefited from both the improved trading conditions through the
second half of 2020, and the decisive actions taken to manage cost
and working capital throughout the period.
The Group settled all amounts previously deferred under the HMRC
COVID-19 deferred payment arrangements within the 2020 year,
representing the acceleration of approximately GBP7 million which
had previously been expected to be paid in the first quarter of
2021.
During the final quarter of the year, the Group also concluded
an extension to its GBP215 million Revolving Credit Facility by a
period of 12 months to March 2023.
Outlook
Looking ahead, we are encouraged by recent market trends in the
industry and the resilience of demand from our house builder and
merchant customers. Whilst we remain mindful of ongoing
uncertainties, including those related to the future impact of
COVID-19 and the expected changes in the Help-to-Buy and stamp duty
rules, the good momentum achieved through the end of 2020 provides
us with a strong platform for progress in the current year.
Overall, market fundamentals for the Group's products remain
robust, with a structural deficit of housing, low interest rates,
and Government policy which is supportive of the role the
construction sector will play in the UK economic recovery. The
Group has a strong balance sheet and the action taken in 2020 to
reduce costs and increase flexibility leaves us well positioned to
take advantage of both continued improvement in our markets and
future growth opportunities.
Joe Hudson, CEO of Ibstock PLC, commented today:
"I am proud of the way that our people have navigated the
challenges of 2020, and I would like to thank them all for their
continuing effort and commitment. Our focus remains, above all
else, on ensuring the health and safety of colleagues, customers
and partners across the supply chain.
"Having taken steps to protect and reshape our business, the
Group traded ahead of our expectations in the latter part of the
year. While we are mindful of the ongoing uncertainties relating to
COVID-19, we are encouraged by the continuing recovery of our
markets through the end of 2020 and enter the new year in a strong
position to capitalise on the opportunities in front of us."
The Group expects to announce its audited results for the year
ended 31 December 2020 on 10 March 2021.
1 Net debt is stated on a consistent basis to prior periods,
excluding lease liabilities arising from IFRS16.
- ends -
Enquiries to:
Ibstock plc
Chris McLeish, CFO 01530 261999
Citigate Dewe Rogerson 020 7638 9571
Kevin Smith
Nick Hayns
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 substitutes 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
15 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.
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