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Ibstock Plc Interim Results Statement – period 6 months to 30th June 2020
06 Aug 2020
Interim results for the six-month period ended 30 June 2020
Decisive actions taken in response to significant COVID-19 impact; business strengthened and well positioned for market recovery
Adjusted results1 | Statutory results | |||||
|---|---|---|---|---|---|---|
Half year to 30 June | H1 2020 | H1 2019 | Change | H1 2020 | H1 2019 | Change |
Revenue | £131m | £203m | -36% | £131m | £203m | -36% |
Adjusted EBITDA1 | £10m | £59m | -84% | |||
(Loss)/Profit before tax | £(11)m | £42m | £(52)m | £41m | ||
EPS | (0.9)p | 9.0p | (12.1)p | 8.1p | ||
Net debt | £103m | £62m | +£41m | |||
Interim dividend | Nil | 3.2p | Nil | 3.2p |
1Alternative Performance Measures are described in Note 3 of the financial statements
Operational Headlines
- Production activities ceased temporarily from late March, following Government steps to control the COVID-19 pandemic
- New safe working practices and protocols introduced, allowing a phased re-opening of production from May
- Continued commitment to our community agenda throughout lockdown, including donations of PPE to local NHS facilities and fundraising for our charity partner, Shelter
- Clay sales volumes recovered to around 60% of prior year levels in June, from 10% in April, with recovery in the merchant channel outpacing house builder volumes
- Concrete business delivered more resilient performance, underpinned by RMI and infrastructure markets, with volumes at 80% of prior year levels in June from 30% in April
- Group-wide restructuring programme to deliver material reduction in fixed cost base, including closure or mothballing of three clay factories and headcount reductions; to deliver up to £20 million of annual fixed cost savings in 2021, at a cash cost of £10 million
Financial Headlines
- Revenue decline of 36% reflects impact of COVID-19 pandemic with significant reductions in both Clay Division, down 43%, and Concrete Division, down 15%
- Adjusted EBITDA1 down 84% reflecting lower sales volumes and operational gearing. In addition, under-recovery of costs associated with the substantial reduction of inventory impacted adjusted EBITDA1 by £10 million in the first half
- Statutory loss before tax of £52 million (2019: £41 million profit) reflects weaker adjusted performance and non-underlying costs of £41m related to COVID-19 and restructuring
- Group was adjusted free cash flow positive during the second quarter reflecting strong focus on cash management through the pandemic
- Robust balance sheet with closing leverage of 1.6x and RCF liquidity headroom of over £110 million. Covenants amended at December 2020 and June 2021
Current Trading and Outlook
- Majority of manufacturing sites now safely re-opened
- Continued recovery in demand patterns in July: Clay sales volumes at around 80% and Concrete sales volumes at around 85% of prior year levels
- Remains difficult to predict outturn for the year given significant COVID-19 uncertainty
- Fundamentals for our markets remain positive; actions taken to strengthen the business and enhance operational flexibility leave us well positioned for recovery in our core markets
Joe Hudson, Chief Executive Officer of Ibstock Plc, commented: “The COVID-19 pandemic has created unprecedented challenges for our industry and the wider UK economy. In response, we have taken swift and wide-ranging action to safeguard the future of the business, including some difficult decisions about the future shape of our manufacturing network. Throughout this period, the health and safety of our colleagues has been our key priority, and I would like to thank them all for their dedication and support over the last few months.
“We entered the crisis with a strong balance sheet. Decisive management action at the outset of the pandemic to control costs and preserve cash ensured the Group was adjusted free cash flow positive during the second quarter and we remain in a solid financial position. With new safe working procedures in place, the majority of our manufacturing plants have now reopened and we are encouraged by recent market trends.
“The fundamentals for our markets remain positive, with a substantial housing deficit in the UK and Government policy which is supportive of the role the construction sector will play in the UK economic recovery. The action we have taken to strengthen the business and improve liquidity, including measures to reduce costs and restructure our operations, provide further flexibility and position us well both to meet current challenges and benefit from recovery in our core markets.”
Results presentation
Ibstock is hosting an audio webcast for investors and analysts at 9am UK time today.
To register for the webcast, please see: https://brrmedia.news/rgr27
The presentation can also be heard via a conference call, where there will be the opportunity to ask questions.
Conference Call Dial-In Details: +44 (0)330 336 9411
Confirmation code: 3006778
An archived version of today’s webcast analyst presentation is available here.
Ibstock Plc | |
|---|---|
Joe Hudson, CEO | 07919 102730 |
Chris McLeish, CFO | 07880 486329 |
Robert Coates, Investor Relations Director |
Citigate Dewe Rogerson | 020 7638 9571 |
|---|---|
Kevin Smith | |
Nick Hayns |
About Ibstock Plc
Ibstock Plc is a leading manufacturer of clay bricks and a diversified range of clay and concrete products, from its operations in the United Kingdom. Its principal products are clay bricks, brick components, concrete roof tiles, concrete substitutes for stone masonry, concrete fencing and pre‐stressed concrete products.
The Group's two divisions are:
Ibstock Clay: The leading manufacturer by volume of clay bricks sold in the United Kingdom. With 19 manufacturing sites Ibstock Brick has the largest brick production capacity in the United Kingdom. It operates a network of 23 active quarries located close to its manufacturing plants. Ibstock Brick commissioned a new soft mud brick manufacturing plant in Leicestershire in 2018 that added approximately 100 million bricks to its brick production capacity per annum. Ibstock Kevington provides masonry and pre-fabricated component building solutions, operating from 5 sites across the UK.
Ibstock Concrete: A leading manufacturer of concrete roofing, walling, flooring and fencing products, along with lintels and general concrete building products, with 15 manufacturing plants in the United Kingdom.
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