(Alliance News) - Ibstock PLC on Wednesday said it expects to report a sharp fall in earnings for 2020, despite the improvement in the FTSE 250 clay bricks manufacturer's third-quarter performance.
Shares in Ibstock were down 9.5% lower at 161.91 pence on Wednesday in London.
In the three months to the end of September, the Leicestershire-based company noted a continued recovery in demand, with trading conditions improving on robust activity levels in the Repair, Maintenance & Improvement market.
Ibstock also reported higher activity in the UK new-build housing segment, allowing overall group volumes to recover to around 90% of prior year levels in September, and retain that position in October.
Revenue for the quarter was 88% of the figure from the same period the year before.
Despite the recovery in business in the third quarter, Ibstock said it expects adjusted earnings before interest, taxes, depreciation and amortisation for 2020 to be around GBP50 million, a 59% fall from GBP122 million the year before.
For the first half of 2020, Ibstock's adjusted Ebitda fell by 84% to GBP10 million, on revenue that declined by 36% to GBP131 million, due to a halt in UK construction activities.
Looking ahead, Ibstock said it will continue with its programme of measures, including the restructuring of operations, which is expected to be completed by the end of 2020. This is set to deliver up to GBP20 million in cost savings for 2021.
"We are encouraged by the continued recovery in demand seen in the third quarter in both our Clay and Concrete businesses, although we remain mindful that there is significant uncertainty in the period ahead. We remain confident in the recovery of our markets over time and that the actions we have taken in the business leave us both with the necessary flexibility to meet current challenges and an organisation well positioned to take full advantage of future opportunities," said Chief Executive Officer Joe Hudson.
By Dayo Laniyan; dayolaniyan@alliancenews.com
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Ibstock (IBST)