Arguably, the more disappointing elements of Ibstock’s (IBST) half-year results had been reflected in the share price 10 days earlier. The brick and concrete manufacturer had already announced half-year adjusted cash profits would sink 2 per cent to £58m, following poor weather at the start of the year and higher energy costs.
The market also knew that recent production across the group’s UK brick factories had been lower than expected – particularly in July – triggering a 12-month period of increased maintenance expenditure, to allow factories to meet rising demand. In turn, management guided towards full-year adjusted cash profits of £121m-£125m.
This guidance was reiterated within the official announcement, but the numbers did show some signs of improvement. Ibstock’s UK businesses account for 83 per cent of group sales, with revenues up 3 per cent to £192m – driven by strong demand among brick customers from the new-build housing sector. US revenues fell 9.5 per cent to £38m, exacerbated by strong comparatives and currency movements, but the constant-currency decline was only marginal. Encouragingly, the US order book also rose year on year. Meanwhile, group pre-tax profits were buoyed by the disposal of a former quarry near Bristol. Excluding this, profitability fell just over 1 per cent to £43m.
Peel Hunt expects adjusted pre-tax profits of £93m and EPS of 18.2p for 2018 (2017: £94.8m and 20.3p).
| IBSTOCK (IBST) | ||||
| ORD PRICE: | 244p | MARKET VALUE: | £ 992m | |
| TOUCH: | 243.8-244.2p | 12-MONTH HIGH: | 306p | LOW: 222p |
| DIVIDEND YIELD: | 3.9%* | PE RATIO: | 12 | |
| NET ASSET VALUE: | 113p** | NET DEBT: | 33% | |
| Half-year to 30 Jun | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2017 | 228 | 39 | 7.6 | 2.6 |
| 2018 | 230 | 51 | 10 | 3.0 |
| % change | +1 | +31 | +36 | +15 |
| Ex-div: | 16 Aug | |||
| Payment: | 21 Sep | |||
| *Excludes special dividend of 6.5p to be paid on 21 Sep 2018**Includes intangible assets of £113m or 28p per share | ||||
