Ibstock plc Profit growth and cash generation in with line expectations

Ibstock plc (LON:IBST), a leading manufacturer of clay bricks and concrete products in the United Kingdom, announced its preliminary results for the year ended 31 December 2018.

Results for the year:

Note: continuing operations

Financial Highlights:

· Strong revenue growth and adjusted EBITDA in line with management’s expectations

· Continued robust underlying cash generation, supported by proceeds from sale of US business and surplus property

· Net debt to adjusted EBITDA down to 0.4x

· Final dividend of 6.5 pence per share (2017: 6.5 pence per share) making the 2018 full year dividend 9.5 pence per share (2017: 9.1 pence per share)

· Additional 6.5p supplementary dividend paid with 2018 interim dividend in September 2018

Operational Highlights:

· Group structure simplified with the disposal of US brick business, Glen-Gery, for US$110 million

· Group now focused on the UK, with two businesses with leading positions in the brick and concrete markets respectively, which provide an excellent base for further development

· Disposals of surplus property generated £9.5 million profit

· Ibstock Brick benefitting from good activity levels within the UK new build housing sector, with both price and volume growth achieved in the year

· New Eclipse brick factory in Leicester performing well and contributed to volume growth in the second half of 2018. Full year benefit of increased production capacity in 2019

· Enhanced maintenance programme in UK brick business progressing as planned

· Increased market share in concrete roof tiles, benefiting from recent investment in new capacity

Joe Hudson, Chief Executive Officer of Ibstock plc, commented:

“2018 was a busy year of development for Ibstock, and we are pleased to be announcing profit growth and cash generation in line with management’s expectations.

“Two strategic milestones were achieved during the year. First, we commissioned our new 100 million capacity brick factory in Leicestershire, adding significant new capacity to our UK brick operations. Secondly, we also took the decision to dispose of Glen Gery, our US brick manufacturing business, to focus the Group on the UK market, where we have leading positions. I am also pleased to report that the enhanced maintenance programme announced in July remains on track.

“With our business structure now simplified and with a clear strategic focus on the UK, we are updating shareholders today on a range of operational excellence initiatives to optimise performance of both our clay and concrete businesses in the years ahead. We will maintain our disciplined approach to investment and capital allocation, and our strong balance sheet gives us the opportunity to invest to grow, either organically or by selective acquisition.

“Whilst we remain mindful of the current political and economic uncertainties in the UK, Ibstock is well-positioned, with market fundamentals that remain encouraging for the medium term. We look forward to another year of progress for the Group.”