Firm says restructuring programme will save it £20m a year

Falling demand in the new build housing sector has seen brickmaker Ibstock close a second factory in less than six months with the firm saying 2023 revenue will be down by more than one fifth.

The firm said it had closed a factory at South Holmwood in Surrey, following the decision to shut its Ravenhead factory in Lancashire last summer.

It said a restructuring plan would save it £20m in annual costs with the initiative also including temporarily reducing capacity as well as rejigging its commercial and innovation arms into one.

In a note, broker Investec said: “With more capacity coming on stream and volume expected to remain subdued in FY24 the review of capacity and cost base all looks sensible and supportive.”

ibstock site 2

Ibstock said 2023 revenue will be down 21%

Revenue last year is set to come in at £405m, a fall of 21% on 2022’s number, while it warned that it expected its core construction markets to be subdued this year.

The firm is spending £50m on building a new plant in Nostell, West Yorkshire, to create an automated brick slip systems factory capable of producing up to 30 million brick slips a year from the end of this year which it said was “progressing to plan”.

Ibstock said at the end of last year, net debt was £101m, up from £46m at the end of 2022.

Chief executive Joe Hudson said: “While the pace and timing of the recovery remain uncertain, Ibstock is in robust financial health, with the balance sheet strength and financial flexibility to ensure we remain well-positioned for a return to growth over the medium term.”

The firm will release its 2023 results on 6 March.