Ibstock slashes profit guidance as brick market downturn deepens

(Sharecast News) - Building products manufacturer Ibstock has downgraded full-year earnings expectations following a sharp deterioration in the UK brick market, warning that second-half profits will be materially below previous forecasts. Ibstock now expects adjusted EBITDA for 2026 to be in the mid-£40m range, reflecting weaker demand, reduced production and the impact of lower manufacturing capacity utilisation.

The company's most recent guidance on 5 August was for adjusted EBITDA to be at the lower end of the £59-68m company-compiled consensus range.

UK brick market volumes fell by around 17% year-on-year during July and August, while Ibstock's third-quarter clay and brick sales were 22% below expectations.

In response, the group reduced production by around 20% compared with plans made at the half-year stage, resulting in lower fixed-cost absorption that is expected to reduce adjusted EBITDA by approximately £6m.

The trading deterioration comes amid continued weakness in UK housebuilding activity, with the delay to the government's Your First Home scheme until April 2027 adding further pressure to near-term demand.

Ibstock said it was prioritising cash generation through tighter management of inventory, capital expenditure and discretionary spending as it adjusts operations to weaker market conditions.

Meanwhile, commissioning of its new ceramic façades factory at Nostell remains on track for completion by the end of the year.

The downgrade follows a difficult first half, when adjusted EBITDA fell 28% to £26m from £36m a year earlier, while revenues declined 15% to £164m.

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