Ibstock Share News (IBST)

(Sharecast News) - Ibstock reported "solid" revenue growth of 5% in its preliminary results on Tuesday, to ?409m, which it said reflected growth in both its clay and concrete divisions.
The FTSE 250 brickmaker said its adjusted EBITDA reached ?122m for the 12 months ended 31 December, which represented growth of 2% excluding a ?7m benefit from the adoption of IFRS 16.

Adjusted earnings per share were "marginally lower" year-on-year for 2019, falling 3% to 18.3p, reflecting a higher effective tax rate for the year of 18.9%.

Statutory profit before tax and earnings per share were also lower year-on-year, falling 12% to ?82m and 13% to 16.3p respectively, which the board said reflected exceptional profits on the disposal of surplus property in the 2018 financial year.

The board declared a final dividend of 6.5p per share, in line with the final distribution in 2018, making the 2019 full year ordinary dividend 9.7p per share, up 2% year-on-year.

Continued strong cash flow generation enabled an additional 5p per share supplementary dividend, the directors noted, which was paid in September.

Net debt at year-end, at ?85m, made for a net debt-to-EBITDA ratio of 0.7x pre-IFRS 16, which was towards the lower end of Ibstock's target range.

On the operational front, Ibstock said trading performance for the year was "resilient", against a backdrop of political and economic uncertainty and reduced new-build housing activity in the second half.

Solid progress was reported on its three strategic priorities of "sustain", "innovate" and "grow".

Production volumes benefited from the new Eclipse brick factory in Leicestershire, and the maintenance programme, which progressed as planned, allowing the company to rebuild inventory during the year from historic low levels.

The integration of Longley Concrete was said to be progressing well, with the business performing in line with expectations.

A sustainability roadmap was published during the period, with its progress in that area recognised externally with a number awards, including an Edie award for energy management for the second year in a row.

Ibstock also announced a ?45m investment to redevelop and expand its existing brick factory, to be commissioned in 2022, which the board said would deliver a "leading" production cost and sustainability profile.

"2019 was a year of progress for Ibstock, as we delivered a resilient trading performance against a backdrop of political and economic uncertainty," said chief executive officer Joe Hudson.

"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."

Hudson noted that the company was announcing a further investment in a new state-of-the-art 80 million-per-annum clay brick factory to re-develop its 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."

At 0816 GMT, shares in Ibstock were up 1.05% at 283.54p.