Ibstock Adjusts Earnings Forecast Amid Rising Costs and Competitive Market
Ibstock Plc, the UK's leading brick manufacturer, has revised its full-year earnings guidance downward, citing higher than expected costs and a competitive market environment that has made it difficult to fully pass on cost inflation to customers. The company now anticipates its adjusted EBITDA for 2025 to be between £77 million and £82 million, a adjustment from previous expectations, reflecting the challenges faced in the first half of the year.
The firm reported that while activity levels in its markets have remained above the prior year period, driven by increased demand in residential construction, the recovery has been more pronounced in new build residential construction markets. This shift has adversely affected average selling prices due to changes in sales mix, further complicating the company's ability to offset the impact of rising costs.
In response to these challenges, Ibstock has been actively increasing productive capacity at several of its clay factories to meet anticipated higher demand from the UK housing market's recovery. However, these efforts have led to higher than expected incremental fixed costs, as the company works to ramp up productivity and operational efficiency from initial lower levels at these facilities.
Despite these headwinds, Ibstock's chief executive, Joe Hudson, expressed optimism about the signs of recovery in the UK housing market and the company's strategic positioning to benefit from this upturn. 'We remain committed to taking steps to ensure we are well placed to support customers and benefit from the recovery as it gathers pace,' Hudson stated, highlighting the company's confidence in its long-term strategy despite the short-term margin pressures.
