Selling its Glen-Gery US business for £76m worked wonders on gearing for Ibstock (IBST), with net debt for the year ending December 2018 falling from £117m the previous year to just £48.4m. It also meant that net finance costs were trimmed from £10.8m to £3.5m.
Adjusted cash profits were ahead by 4.1 per cent at £112.4m, with brick production the key driver through a combination of price and volume growth, while revenue in the concrete business was broadly flat, reflecting a slight softening in the civil and rail markets. However, it continued to build market share in concrete roof tiles thanks to an improved product range.
Bad weather affected reduced activity levels in the winter months, while higher energy prices provided a further headwind in the spring and summer months. However, conditions improved in the second half, with production capacity increased by 100m soft mud bricks following the opening of its Eclipse factory.
Capital expenditure for 2019 and 2020 is expected to reach £28m to £32m both on maintenance and project work; the latter is expected to generate adjusted cash profits of over £5m a year from 2021 onwards.
Analysts at Peel Hunt are forecasting cash profits for the year to December 2019 of £119.6m and EPS of 18.9p, compared with £112m and 18.8p in 2018.
| IBSTOCK (IBST) | ||||
| ORD PRICE: | 261.8p | MARKET VALUE: | £1.06bn | |
| TOUCH: | 261.6-262p | 12-MONTH HIGH: | 298p | LOW: 191p |
| DIVIDEND YIELD: | 3.6% | PE RATIO: | 14 | |
| NET ASSET VALUE: | 110p** | NET DEBT | 11% | |
| Year to 31 Dec | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p)# |
| 2015*(restated) | 358 | 86 | 32.6 | 4.4 |
| 2016 | 435 | 111 | 22.3 | 7.7 |
| 2017 | 363 | 77.7 | 16.0 | 9.1 |
| 2018 | 391 | 92.5 | 18.8 | 9.5 |
| % change | +8 | +19 | +18 | +4 |
| Ex-div: | 9 May | |||
| Payment: | 7 Jun | |||
| *Covers the period from 28 November 2014 to 31 December 2015 **Including intangible assets of £101m, or 25p a share #Does not include supplementary dividend of 6.5p a share paid with the 2018 half-year dividend | ||||
