First Quarter Trading Update
First quarter sales volumes below expectations due to weak residential construction demand and wet weather, but adjusted EBITDA in line with guidance.
vs expectations: in line
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Ibstock Plc ("Ibstock" or the "Group"), a leading UK manufacturer of a diverse range of building products and solutions, today issues a trading update for the first quarter of 2024.
Trading Update
Trading conditions in the first quarter remained challenging, with activity levels across residential construction markets remaining subdued during the period. As a result, sales volumes were below our expectations, with weaker end market demand in part reflecting the exceptionally wet weather experienced across the UK during the early months of the year.
Despite weaker volumes, a strong performance across our cost reduction actions, commercial discipline and operational execution enabled the Group to deliver adjusted EBITDA for the period in line with our expectations.
We are encouraged by recent lead indicators which suggest some improvement in future demand, and it will be important to see how this translates into activity during the spring season. We remain focussed on costs and operational performance during this period of market volatility but continue to expect volumes to improve as the year progresses, with our expectations for full year adjusted EBITDA remaining unchanged.
Our major capital projects are on track with commissioning of the new Atlas factory and the first phase of the brick slip systems investment in Nostell progressing well. These projects, together with the significant investment in our core business over recent years, leave the Group well positioned to support the significant unmet demand for new build housing in the UK.
Joe Hudson, CEO of Ibstock PLC, said:
"Trading conditions remained challenging in the first quarter. Against this background, adjusted EBITDA for the period was in line with our expectations, supported by our disciplined action on costs and strong operational execution.
"While we expect market demand to remain subdued in the near term, lead indicators reflect an increase in housing market activity, which offers encouragement for an improvement in volumes in due course.
"Our medium-term prospects remain strong, underpinned by our robust balance sheet, well invested manufacturing network and leading market positions. We have the capability to take advantage of opportunities against the current subdued backdrop, and the business is well placed to achieve strong, profitable growth as our markets recover."
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