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.”
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.
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