Brick maker Ibstock (IBST) has sustained earnings in a wobbly first half for many UK businesses and deepened its bet on the newbuild market with a £14m acquisition.
The company is spending even more on shareholders, handing over a 5p supplementary dividend for the half on top of the 3.2p regular payout. Chief executive Joe Hudson said Ibstock could buy Longley Concrete and fund the dividend while remaining at the bottom end of the leverage range. Net debt stood at £62m on 30 June, compared with £136m a year ago.
The company noted “slight softening” in the merchant sector in recent weeks in the UK as a no-deal Brexit looms, but the company’s Help to Buy key driver has another few years to run. Ibstock said revenue from continuing operations was up 6 per cent year on year in the six months to 30 June, with the clay business leading the way. The infrastructure-exposed side of the group was a drag on this measure as parts of the concrete range brought in less than expected. The result was adjusted Ebitda growth being "constrained" by lower demand from rail projects and a planned shutdown. That figure grew 7.5 per cent year on year to £59m, helped along by £3.1m from IFRS 16.
Bloomberg consensus forecasts for adjusted Ebitda see gradual growth on last year's £112m, to £120m this year and £126m in 2020.
| IBSTOCK (IBST) | ||||
| ORD PRICE: | 228p | MARKET VALUE: | £931m | |
| TOUCH: | 227.6-228 | 12-MONTH HIGH: | 266p | 191p |
| DIVIDEND YIELD: | 4.3% | PE RATIO: | 13 | |
| NET ASSET VALUE: | 115p* | NET DEBT: | 13% | |
| Half-year to 30 June | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p)** |
| 2018 | 192 | 49.6 | 10.0 | 3.00 |
| 2019 | 203 | 41 | 8.10 | 3.20 |
| % change | +6 | -17 | -19 | +7 |
| Ex-div: | 15 Aug | |||
| Payment: | 20 Sep | |||
| *Includes intangible assets of £96m, or 23.6p a share **Not including supp dividends | ||||
