(Sharecast News) - Clays bricks and concrete products manufacturer Ibstock said on Thursday its FY22 performance is set to be "modestly ahead" of its previous expectations after a strong start to the year.
In an update for the first quarter, the group said it had performed ahead of its expectations, driven by stronger clay brick sales volumes and a resilient margin performance.
Ibstock said demand remains firm in all its end markets. The clay plant network is performing well, with production volumes marginally ahead of its expectations, and the company said its "dynamic commercial approach" has enabled a full recovery of input cost inflation.
Meanwhile, solid operational execution in the concrete division meant it performed in line with expectations despite some continuing supply chain challenges.
"The operating environment continues to be characterised by significant levels of input cost inflation, primarily in the categories of energy, freight, carbon and materials," the company said. "In relation to energy, our hedging strategy has positioned us well against a backdrop of elevated prices. We have now substantially covered energy requirements for the first half of the year, have purchased around 75% of requirements for the second half and have over one-third covered for 2023."
Ibstock also announced the launch of a £30m share buyback programme. The return of capital is in addition to its committed growth investments of more than £100m.
Chief executive Joe Hudson said: "Demand in both the new build housing and RMI (repair, maintenance and improvement) markets remain robust and, while we are mindful of the broader macroeconomic uncertainties, we now expect to deliver performance for the full year modestly ahead of our previous expectations.
"We are also pleased to be announcing a £30m share buyback programme, demonstrating our ability to deliver enhanced returns to shareholders whilst continuing to invest in our future growth."
At 0810 BST, the shares were up 5.5% at 175.60p.
Ibstock (IBST)