Last checked at 18 Jan 2016 07:00
18 January 2016
Ibstock plc
Trading Update
Ibstock plc ('Ibstock' or the 'Group'), a leading manufacturer of clay bricks and concrete products with operations in the United Kingdom and the United States, today issues a trading update for the year ended 31 December 20151.
Recent Trading Performance
The Group continues to trade in line with expectations and it is expected that adjusted EBITDA (after adjusting for exceptional items, principally related to the costs of acquiring the operating entities in February 2015 and then through the Initial Public Offering in October 2015), will be in line with market expectations.
Group revenue for the year ended 31 December 2015 was up 9% whilst revenue for the six months ended 31 December 2015 was up 7% compared with the second half of 2014.
Revenue from clay and concrete products in the UK, which represents approximately 80% of Group revenue, was up 9% for the full year compared to 2014. The growth in revenue in 2015 primarily reflects a stronger pricing environment for clay bricks. Despite the release and reduction of brick stocks by some housebuilders and distributors, total UK industry brick demand continued to exceed estimated annual domestic production capacity during the year.
Clay product revenue increased by 13% on the equivalent period in 2014; however, concrete product revenues in 2015 were 1.5% lower than 2014, with increased revenue in new build housing related products - including roof tiles - outweighed by lower activity in fencing related products and rail products - where projects have been delayed. Concrete product revenue into the UK fencing sector in 2014 had been boosted by unusual weather conditions in the first half of that year.
Revenue in the US was up 10% (8% after adjusting for exchange rate differences) for the full year compared to 2014 reflecting a combination of rising volumes and higher average prices which include the benefit from a more favourable product mix.
As at 31 December 2015, net debt was lower than management expectations as a result of strong working capital management, giving a year end leverage which is expected to be c1.4 times adjusted EBITDA. Some of this improvement is timing related and is anticipated to unwind through 2016.
During 2015 the Group commenced construction in the UK of an additional clay brick factory in Leicestershire - which will expand Ibstock's UK clay brick capacity by c13% - and the installation of a new concrete tile line at the Leighton Buzzard facility, which will broaden the Group's concrete tile product range. Both projects are progressing in line with expectations, with the concrete tile line expected to be operational in the second half of 2016 and the additional brick factory expected to commence commissioning in the second half of 2017.
Price negotiations for 2016 with all our major UK brick customers have now been concluded and are in line with management expectations.
The Group will announce its preliminary results for the period ending 31 December 2015 on 10 March 2016.
Enquiries
Ibstock (enquiries via Citigate Dewe Rogerson)
Wayne Sheppard (CEO)
Kevin Sims (CFO)
Citigate Dewe Rogerson 020 7638 9571
Kevin Smith
Simon Rigby
Nick Hayns
Notes to Editors:
Ibstock plc is a leading manufacturer of clay bricks with a diversified range of clay and concrete products, and operations in the United Kingdom and the United States. Its principal products are clay bricks, brick components, concrete roof tiles, concrete substitutes for stone masonry, concrete fencing and concrete rail products.
The Group's four primary businesses are:
· UK business:
o Ibstock Brick: The leading manufacturer by volume of clay bricks sold in the United Kingdom2. With 19 manufacturing plants Ibstock Brick has the largest brick production capacity in the United Kingdom. It operates a network of 23 active quarries which are generally located close to its manufacturing plants. Ibstock Brick has commenced construction of a new soft mud manufacturing plant in Leicestershire that is expected to add approximately 100 million bricks (c13%) to its brick production capacity per annum. The new plant is expected to be commissioned in the second half of 2017.
o Supreme: A leading manufacturer of concrete fencing products and concrete lintels and general concrete building products, with seven manufacturing plants in the United Kingdom.
o Forticrete: A leading manufacturer of concrete substitutes for natural stone walling and dressings and niche concrete roof tiles, with seven manufacturing plants in the United Kingdom. Forticrete has a new concrete roof tile manufacturing line under development at its Leighton Buzzard facility, which is currently expected to be operational in the second half of 2016.
· US business:
o Glen-Gery: A leading manufacturer of bricks by volume of despatches in the Northeast and Midwest regions of the United States, with a network of ten manufacturing plants and 29 active quarries, covered by 20 active quarry permits.
1 The annual results for the year discussed herein are not those that will be presented in the statutory accounts. The statutory accounts will present the 13 month period from 28 November 2014 to 31 December 2015, including 10 months of trading of the operating companies (Ibstock Brick, Supreme, Forticrete and Glen-Gery). This follows the recent incorporation and listing of the Group, and the acquisition of the operating companies on 26 February 2015. Periods quoted represent the results of the operating companies on a combined basis for the period 1 January 2015 to 26 February 2015, consistent with the presentation with the Ibstock plc Prospectus dated 22 October 2015, and on a consolidated basis thereafter through 31 December 2015. The annual results have been shown herein as the Directors believe the information is more relevant to investors as they show a full annual cycle of performance.
2 2014, Excluding imports