Ibstock (IBST) H1 2024 earnings summary

Executive summary

• Delivered a solid first-half performance with adjusted EBITDA in line with expectations, despite a 20% revenue decline year-over-year and challenging market conditions.

• Active cost management and disciplined pricing supported results, with over £20m annualised fixed cost savings delivered.

• Major capital projects at Aldridge, Atlas, and Nostell are nearing completion, supporting future growth and sustainability goals.

• Robust balance sheet and liquidity provide resilience and flexibility for continued investment.

• Strategic progress in Futures, with first brick slips capacity investment operational.

Financial highlights

• Revenue for H1 2024 was £178.2m, down 20% year-over-year, mainly due to lower market demand and disciplined pricing.

• Adjusted EBITDA was £38m, down 40%, with margin dropping to 21.2% from 28.2%.

• Adjusted EPS was 3.5p, down from 9.0p, reflecting lower pre-tax profits and a higher effective tax rate.

• Net debt increased to £138m, with leverage at 2.0x adjusted EBITDA, driven by seasonal working capital and ongoing investment.

• Interim dividend declared at 1.5p per share, down from 3.4p, in line with capital allocation policy.

Outlook and guidance

• Full-year 2024 market volumes now expected to be modestly down year-over-year, with a sequential volume improvement in H2.

• Adjusted EBITDA for H2 expected to be broadly in line with the prior year period.

• Guidance for 2025 CapEx to step down to £30-35m as major projects conclude.

• Anticipate positive cash flows in H2 and leverage to reduce toward the target range of 0.5x-1.5x.

• Market recovery expected to be gradual, with a more positive medium-term outlook as government reforms take effect.