Full Year Results 2020 – statement

Results for the year ended 31 December 2020

Resilient operational performance and continued strategic progress

Ibstock Plc ("Ibstock" or the "Group"), a leading manufacturer of clay bricks and concrete products in the United Kingdom, announces its results for the year ended 31 December 2020.

	Adjusted results¹			Statutory results
Year ended 31 December	2020	2019	Change	2020	2019	Change
Revenue	£316m	£409m	(23%)	£316m	£409m	(23%)
Adjusted EBITDA	£52m	£122m	(57%)
Exceptional Items	(£36m)	(£3m)	(>100%)
Profit / (Loss) before tax	£12m	£85m	(86%)	(£24m)	£82m	(>100%)
EPS	4.0p	18.3p	(78%)	(6.8p)	16.3p	(>100%)
Net debt	£69m	£85m	19%
Total Ordinary Dividend²	1.6p	3.2p		1.6p	3.2p

All numbers from continuing operations

Operational Headlines

Resilient operational performance and strategic progress against unprecedented backdrop of COVID-19
Health and safety of all our people has remained the key priority throughout
Strong progress against operational strategy, notably in area of ESG; achieved “AA” rating from MSCI
Following initial sharp contraction in market demand from late March 2020, steady and sustained recovery of demand patterns over remainder of year
Group wide restructuring programme to reshape and upgrade the business completed in H2, delivering up to £20 million of cost savings in FY21, at a cash cost of £9 million

Financial Headlines

Revenue decline of 23% reflects impact of COVID-19 pandemic, with significant reductions in both Clay Division, down 29%, and Concrete Division, down 5%
Adjusted EBITDA¹of £52 million (2019: £122 million) down 57% reflecting lower sales volumes and impact of operational gearing
Statutory loss before tax of £24 million (2019: £82 million profit) reflects lower trading performance and exceptional costs of £36 million principally related to COVID-19 and restructuring
Decisive actions to reshape cost base, combined with demand recovery, enabled Group to exit 2020 with margins in both divisions getting back close to the underlying levels achieved in the prior year
Strong cash flow performance, materially ahead of expectations, driven by improved trading through the second half and actions to manage costs and working capital
Robust balance sheet with closing leverage⁴of 1.5x net debt to adjusted EBITDA¹and liquidity headroom of over £145 million
Resumption of dividend payments – proposing modest final dividend for 2020 of 1.6p per share

Current Trading and Outlook

Trading in the initial period of 2021 slightly ahead of run rates achieved in Q4 2020
Demand backdrop and recent policy announcements are encouraging but we remain mindful of economic uncertainties and disruption associated with COVID-19. As a result, the Board is comfortable with current market consensus expectations³for adjusted EBITDA¹for the year
With our strong financial position, strengthened operating platform and range of attractive growth opportunities, we are focused on driving sustainable, profitable growth to deliver attractive shareholder returns over the medium term

Joe Hudson, Chief Executive Officer of Ibstock Plc, commented: “2020 was a testing year, as COVID-19 created some exceptional challenges for our business and our people. The health and wellbeing of colleagues, customers and business partners were paramount throughout, and I would like to thank them all for their impressive response to the pandemic and their ongoing effort and commitment.

“Through the actions we have taken, the Group has entered the new financial year with a stronger operational platform in place and a clear focus on the strategic drivers that will re-establish growth and create sustainable, long term earnings momentum in the business.

“Market demand recovered faster than our expectations as we progressed through 2020, and trading in the initial period of 2021 has started well, with clay sales volumes slightly ahead of the run rates achieved in Q4 2020. While we remain mindful of the economic uncertainties and disruption associated with COVID-19, we are encouraged by the strength of trading over recent weeks and are confident for the year ahead.

“Looking further forward, market fundamentals remain supportive, underpinned by the UK housing deficit, Government policy and low interest rates. With a strong management team, clarity on the strategic drivers which will underpin our progress and continued recovery in our core markets, we believe that Ibstock is well placed to re-establish positive earnings momentum and deliver sustainable, profitable growth over the medium term.”

¹ Alternative Performance Measures are described in Note 3 to the results announcement.
² 2020 dividend is proposed, 2019 comparative differs to that announced in the equivalent RNS last year (as the final 2019 dividend was cancelled due to impacts of COVID-19)
³ Management believes that analysts' consensus expectations for adjusted EBITDA1 for the year are approximately £93 million
⁴ Based on pre-IFRS 16 numbers, in line with RCF covenants

Results presentation

Ibstock is hosting an audio webcast for investors and analysts at 10am UK time today.

An archived version of today's webcast analyst presentation will be available today.

Ibstock Plc
Joe Hudson, CEO
Chris McLeish, CFO
01530 261 999

Citigate Dewe Rogerson
Kevin Smith
Nick Reading
020 7638 9571

About Ibstock Plc

Ibstock Plc is a leading UK manufacturer of clay bricks and a diversified range of clay and concrete products. Its principal products are clay bricks, brick components, concrete roof tiles, concrete substitutes for stone masonry, concrete fencing and pre‐stressed concrete products.

The Group's two divisions are:

Ibstock Clay: The leading manufacturer by volume of clay bricks sold in the United Kingdom. With 16 manufacturing sites Ibstock Brick has the largest brick production capacity in the United Kingdom. It operates a network of 18 active quarries located close to its manufacturing plants. Ibstock Kevington provides masonry and pre-fabricated component building solutions, operating from 6 sites across the United Kingdom.

Ibstock Concrete: A leading manufacturer of concrete roofing, walling, flooring and fencing products, along with lintels and general concrete building products, with 14 manufacturing plants in the United Kingdom.

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