# Ibstock plc Resilient trading performance and good strategic progress

- Link: https://www.directorstalkinterviews.com/ibstock-plc-resilient-trading-performance-and-good-strategic-progress/412807342
- Published: 2020-03-03T07:58:46+00:00
- Author: Giles Arbor

**Ibstock plc** (LON:IBST), a leading manufacturer of clay bricks and concrete products
in the United Kingdom, announced today its results for the year ended 31 December
2019.

**Financial Highlights:**

 * Solid revenue growth of 5%, reflecting growth in both our Clay and Concrete divisions
 * Adjusted EBITDA of £122 million, representing growth of 2% excluding a c.£7 million
   benefit from the adoption of IFRS 16
 * Adjusted EPS for 2019 marginally lower year-on-year, reflecting a higher effective
   tax rate for the year of 18.9% (2018: 17.4%)
 * Statutory PBT and EPS for 2019 are lower year-on-year, primarily reflecting exceptional
   profits on disposal of surplus property in FY18
 * Final dividend of 6.5 pence per share (2018: 6.5 pence per share) making the 
   2019 full year ordinary dividend 9.7 pence per share (2018: 9.5 pence per share),
   a 2% increase
 * Continued strong cash flow generation enabled an additional 5.0 pence per share
   supplementary dividend paid in September 2019
 * Net debt at year end, at £85 million, a net debt/EBITDA ratio of 0.7x (pre-IFRS
   16), towards lower end of target range

**Operational Highlights:**

 * Resilient trading performance for the year, against a backdrop of political and
   economic uncertainty and reduced new build housing activity in the second half
   of 2019
 * Solid progress made with our three strategic priorities – Sustain, Innovate and
   Grow
 * Production volumes have benefited from the new Eclipse brick factory in Leicestershire,
   and the maintenance programme, which progressed as planned, allowing us to re-
   build inventory during the year from historic low levels
 * Integration of Longley Concrete is progressing well and the business has performed
   in line with expectations
 * [Sustainability](https://www.directorstalkinterviews.com/sustainability-green-stocks-news)
   roadmap published with our progress in this area recognised externally with several
   awards, including an edie award for energy management for the second year in 
   a row
 * Announcing £45 million investment to re-develop and expand existing brick factory;
   to be commissioned in 2022, delivering a leading production cost and sustainability
   profile

> **Joe Hudson, Chief Executive Officer of Ibstock plc, commented:**
> “2019 was a year of progress for Ibstock, as we delivered a resilient trading 
> performance against a backdrop of political and economic uncertainty. We made 
> good progress against our strategic priorities, including measures to enhance 
> production volumes and quality, the strengthening of our executive team and expanding
> our Concrete business, through the acquisition of Longley Concrete.
> “Our strong cash generation allowed us to invest in the business and to pay a 
> further supplementary dividend to our shareholders while remaining towards the
> lower end of our debt guidance range. Today we are announcing a further investment
> in a new state-of-the-art 80 million per annum clay brick factory to re-develop
> our Atlas site, in the West Midlands.
> “Fundamentals in the UK remain robust, with a structural housing deficit, low 
> interest rates, high employment and the benefit of the Government’s Help-to-Buy
> scheme all underpinning the market. However, the political uncertainty which caused
> more subdued market conditions in the second half of 2019 has meant a slower start
> to 2020. We anticipate that activity levels will improve as the year progresses,
> and as a result, expect to deliver a stable outcome for the year.”

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