Ibstock forecasts stronger 2025, shares spark
By Abigail Townsend
Date: Wednesday 05 Mar 2025
(Sharecast News) - Shares in Ibstock sparked on Wednesday, after the construction materials group forecast improved trading on the back of a strengthening housebuilding sector.
The firm, a specialist manufacturer of clay bricks and concrete products, has been hit hard by the downturn in the building sector.
In the year to 31 December, revenues slid 10% to £366m - or by 13% on a like-for-like basis - while pre-tax profits slumped 30% to £21m.
Ibstock said demand was subdued throughout 2024, hitting sales volumes in the core business in the first half especially.
However, demand started to strengthen as the year progressed. Second-half revenues were up 6% in the first six months, with the improved trading carrying into the current year.
Ibstock said trading in the early weeks of 2025 had been "solid", with sales volumes head of the comparative period a year previously."
"Improvement in market volumes [is] expected in 2025, with momentum building through the year," the FTSE 250 firm added.
As at 0945 BST, shares in Ibstock were 7% stronger at 162.08p.
Joe Hudson, chief executive, said: "Our continued focus on the active management of capacity and margin ensured we delivered a resilient performance in 2024.
"We expect an improvement in market volumes in 2025, with momentum building through the year. Ibstock is well-positioned for a market recovery, and the fundamental drivers of demand in our markets remain firmly in place.
"We see a significant opportunity for a new era of housebuilding in the UK."
The UK housebuilding sector has been hit hard by soaring costs, while high interest rates and the cost of living crisis dented consumer demand for new homes.
However, analysts believe the sector may have turned a corner, supported by falling interest rates and moves by government to boost housebuilding, including shaking up the planning system.
Aarin Chiekrie, equity analyst at Hargreaves Lansdown, said: "Many of the challenges are beyond Ibstock's control - such is the nature of a cyclical industry. But the group hasn't just stood by and watched. It's been busy streamlining operations, cutting costs and making tough but necessary calls, including trimming dividends to preserve cash.
"While it's still early days, there are some signs of life returning to the newbuild market.
"If the markets are right about two more rate cuts this year, mortgage affordability should see a slight boost, potentially fuelling further demand for Ibstock's products."
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