Ibstock plc (LON: IBST), a leading manufacturer of clay bricks and concrete products in the United Kingdom, today issued a trading update for the year ended 31 December 2019.
The Group delivered a resilient trading performance for the year against a backdrop of political and economic uncertainty and reduced new build housing activity in the second half, and expects to deliver adjusted EBITDA broadly in line with market expectations for 2019.
Total revenues were up mid-single digits for the full year compared to 2018, primarily reflecting pricing benefits in our clay brick business, volume growth in some of our key concrete product lines, including roofing, and the consolidation of Longley Concrete, acquired in July 2019.
At 31 December 2019, net debt1 was approximately £84 million, after the payment of the supplementary dividend announced at the interim results, the acquisition of Longley Concrete and investment in working capital as brick inventories increased from historically low levels. Ibstock plc continues to benefit from strong underlying cash generation and remains towards the lower end of its target leverage range of 0.5-1.5x net debt to adjusted EBITDA2.
Looking ahead, the lower levels of residential construction activity in the second half of 2019 have created a more subdued market backdrop as we enter 2020. However, the market fundamentals for new build housing in the UK remain robust, with a structural deficit of housing, low interest rates and unemployment, and the Government’s Help-to-Buy scheme in place until 2023. The Group therefore remains well positioned and, with a strong balance sheet, we continue to assess investment options in the UK as we look to deliver growth over the medium term.
The Group will announce its results for the year ended 31 December 2019 on 3 March 2020.
1 Net debt is stated on a consistent basis to prior periods, excluding lease liabilities arising from IFRS16.
2 Leverage range calculated as net debt to adjusted EBITDA before the impact IFRS16.