Third Quarter Trading Update
Weaker than expected demand in clay and concrete markets in Q3 leads to revised H2 EBITDA guidance.
vs expectations: below
- H2 2025 adjusted EBITDA similar to first half
- Market share Q3 ahead of comparative period
- Covenanted leverage at year-end around 2 times
- Sales volumes second half in line with first half
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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 third quarter of the financial year ending 31 December 2025 and the year to date.
| · | A more uncertain near term backdrop in the Group's core construction markets has led to weaker than expected demand, with an associated impact on both Clay and Concrete revenues during the third quarter. |
| • | Market share in the third quarter based on published industry data was ahead of the comparative period, and in line with the first half of the 2025 year. However, in light of softer market demand, sales volumes in the second half are now expected to be in line with the first half of the year, with continuing weighting towards new build residential customers |
| • | Core manufacturing networks operated at higher levels of productivity and operational efficiency in the third quarter, with performance improving in line with our expectations. |
| • | In light of the lower levels of market activity and anticipated pricing, the Board now expects H2 2025 adjusted EBITDA to be similar to the first half of the year. |
| • | Continued focus on cash management delivered a solid Q3 cash performance, with the Group retaining a robust financial position. |
Trading Update and Outlook
A more uncertain near-term economic and political backdrop has led to a weaker than expected demand in both the Clay and Concrete businesses' core markets during the third quarter. Customers were more cautious as the quarter progressed, with these conditions now assumed to continue through the remainder of the year. Market share in the third quarter based on published industry data was ahead of the comparative period, and in line with the first half of the 2025 year. However, in light of softer market demand, sales volumes in the second half are now expected to be in line with the first half of the year. Market dynamics, coupled with the continued shift in sales mix towards new-build residential demand, have also limited the Group's ability to achieve targeted pricing levels.
The Group's core manufacturing networks operated at higher levels of productivity and operational efficiency in the third quarter, in line with our expectations.
A focus on cash management, with tight control of capital expenditure, working capital and discretionary spend enabled the Group to deliver a solid cash flow performance in the third quarter. As a consequence, whilst net debt at the end of the 2025 year is expected to be above previous guidance, the Group retains a strong financial position with covenanted leverage at year-end expected to be around 2 times.
We will continue to act with agility around network utilisation, in light of anticipated demand, ensuring that we balance the need for operational flexibility with a focus on financial efficiency and capital returns.
In light of the lower levels of market activity and pricing anticipated during the second half, the Board now expects adjusted EBITDA in the second half of the 2025 year to be similar to the level achieved in the first half of the year.
Strategic Progress
Our Atlas pathfinder factory continues to make good progress, with reliability and quality advancing and multiple new products progressing well through final commissioning. As we move into 2026, out of commissioning and into production, we expect to see a good uplift in profitability at Atlas.
The commissioning of our pioneering ceramics facades factory in Nostell is also progressing well. This will serve to meet pressing UK building needs. We remain committed to developing innovative and sustainable ways to build the future and believe that modern construction markets represent an important source of diversified growth for the Group over the medium term.
Our calcined clay project is on track and with R&D and testing now complete, we are having discussions with potential partners to explore value creation opportunities. We are now assessing proposals and expect to be able communicate further on the direction of these by the time of our 2025 full year results.
Joe Hudson, CEO of Ibstock PLC, said:
"With clear, long term structural imperatives for residential construction growth, it is disappointing that additional near term headwinds are impacting momentum in our markets in the latter part of the year. In spite of this difficult and uncertain market backdrop, the Group has continued to make good operational progress and maintain share.
"Whilst it remains difficult to predict the pace and timing of market recovery, we will continue to focus on strong execution and progressing our long term strategic growth projects. These initiatives, combined with the increasing contribution from our recent investments, leave us well positioned to benefit as the market returns."
Investor Event: As indicated at the time of our 2025 Interim Results, the Group will be hosting a site visit for investors at its Atlas factory on December 8th. Details to follow.
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