Ibstock plc Interim Results Statement – period 6 months to 30th June 2021

Interim Results for the six months ended 30 June 2021

Strong H1 trading performance with clear focus on growth opportunities

Ibstock Plc ("Ibstock" or the "Group"), a leading UK manufacturer of clay bricks and concrete products, announces its results for the six months ended 30 June 2021.

	Statutory results
Six months ended 30 June	2021	2020	2019	Δ 1Y	Δ 2Y
Revenue	£202m	£131m	£203m	+54%	(1%)
Profit / (loss) before taxation	£39m	(£52m)	£41m	+£91m	(£2m)
EPS	2.7p	(12.1p)	8.1p	+14.8p	(5.4)p
Interim dividend per share	2.5p	Nil	3.2p

	Adjusted results¹
Six months ended 30 June	2021	2020	2019	Δ 1Y	Δ 2Y
Adjusted EBITDA	£55m	£10m	£59m	+>100%	(7%)
Adjusted EPS	7.9p	(0.9p)	9.0p	+8.8p	(1.1)p
Adjusted free cashflow	£23m	(£15m)	£9m	+£38m	+£14m
Net debt	£53m	£103m	£62m	(£49m)	(£9m)

In order to provide a more relevant performance commentary, comparison in this statement has been made to the corresponding 6 month periods in both 2020 and 2019, the latter considered to represent a more meaningful pre-COVID baseline for performance comparisons. Longley is included in 2021 and 2020 results but not 2019 as acquired in H2 2019.

All numbers from continuing operations

Operational Highlights

Strong operating performance with Group revenue approaching 2019 levels and divisional margins back to 2019 levels on a like-for-like basis¹, benefiting from 2020 restructuring actions and good overall cost management
Market fundamentals remain sound, underpinned by robust UK housing demand and good mortgage availability
Strong demand from RMI markets with UK consumers continuing to prioritise spending on the home
Impacts from tighter supply chain conditions have been well managed, with inflation, mainly within the Concrete Division, being passed through
Initiatives to drive innovation, efficiency and sustainability are accelerating the momentum of the business

Financial Highlights

Strong trading performance with Group revenue for the six months to 30 June 2021 of £202 million up by 54% (2020: £131 million, 2019 £203 million). On a like-for-like basis¹, revenues were around 94% of 2019 levels
Group adjusted EBITDA1 of £55 million materially above £10 million in H1 2020 reflecting robust recovery, and within 7% of H1 2019 adjusted EBITDA1 of £59 million
Clay division revenues of £138m representing 92% of 2019, with sales volumes ahead of expectations and adjusted EBITDA1 margin of 34%, in line with HY 2019
Concrete division revenues of £64m were 22% above 2019, or in line on a like-for-like basis1 with like-for-like adjusted EBITDA margin of 20.6%, marginally ahead of HY 2019
Statutory profit before tax of £39 million (2020: loss of £52 million) reflects strong recovery from COVID-impacted period in 2020 and reduced exceptional costs¹with a net exceptional gain of £5 million (2020: exceptional cost of £35 million), and within 5% of H1 2019 profit before tax of £41 million
Expected cost savings of £10 million captured in full during the period (being half of our annualised target of £20 million from FY20 restructuring), with good fixed cost discipline across the business
Strong free cash flow and robust balance sheet with 0.6x net debt to adjusted EBITDA leverage ratio¹at period end, down from 1.5x at 2020 year-end, and 1.6x at H1 2020 period end
Interim dividend of 2.5p per share (2020: nil) reflecting strong performance and confidence in longer-term outlook

Current Trading and Outlook

Demand in the initial weeks of the second half has remained robust, although supply chain challenges, principally relating to freight availability and the impact of COVID constraints on factory labour, have become more evident
Commissioning of capital enhancements underway to bring clay network to around 95% of 2019 volume levels from the middle of 2022
Releasing updated ESG targets in H2 2021, including more ambitious targets for carbon reduction
Board now expects adjusted EBITDA¹for the 2021 year to be modestly ahead of its previous expectations²

Joe Hudson, Chief Executive Officer of Ibstock Plc, commented: “We delivered a strong performance for the first half, supported by the UK construction sector’s continued recovery from the period of peak pandemic impact. Underlying market fundamentals remained robust, backed by demand for new housing, and we have captured the benefits of last year’s restructuring and re-focused on growth opportunities.

“The £60 million investment in the redevelopment of our clay brick facilities in the West Midlands will expand our capacity significantly from early 2024, consolidating our leadership position in the clay brick market. It will also demonstrate our commitment to leading our industry on sustainability issues, producing the UK’s first net-zero carbon bricks, an innovation that is already generating significant customer interest.

“We are carrying good momentum into the second half and now expect adjusted EBITDA¹ for the year to be modestly ahead of previous expectations², although we are mindful of continuing risks to the UK’s economic recovery, and the potential short-term impact of supply chain disruption and inflation on our sector. Ibstock has a range of growth initiatives in development, focused on the core business and the key industry trends of sustainability and the industrialisation of construction processes. We are excited about the potential in this pipeline and believe we are well placed to deliver attractive growth and shareholder returns into the future.”

¹ Alternative Performance Measures are described in Note 3 to the results announcement.
² In March 2021 Full Year results Announcement, the Board indicated it was comfortable with market consensus expectations for 2021 adjusted EBITDA at that time of around £93 million

Results presentation

Ibstock is hosting an audio webcast for investors and analysts at 10.00am UK time today.

To register for the webcast, please see: https://brrmedia.news/IBST_HY21

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

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

Citigate Dewe Rogerson	020 7638 9571
Kevin Smith
Nick Reading

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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