Ibstock (IBST) H2 2025 earnings summary

Executive summary

• Group revenue grew 2% year-over-year to £372.1 million, with EBITDA at £71 million, down 10% from 2024, reflecting challenging market conditions and inflationary pressures.

• Delivered resilient performance in 2025 despite deteriorating market conditions, with results in line with revised expectations.

• Strong H1 volume growth driven by new build residential demand, but H2 saw market uncertainty and a deceleration in volumes, with brick volumes falling 2% year-over-year in Q4.

• Market share increased, outperforming the overall brick market, with diversified ceramic facades gaining traction.

• Major CapEx projects at Atlas and Nostell completed, with a focus on operational efficiency and cost management.

Financial highlights

• Adjusted EBITDA declined to £71.0m from £79.4m, with margin down to 19.1% (2024: 21.7%) due to inflation and higher costs from reactivated capacity.

• Net debt increased to £120 million, with leverage at 2x, and over £100 million in available liquidity.

• Return on capital employed at 5.8%, below the 20% target, reflecting recent investments and subdued earnings.

• Final dividend of £0.015, total £0.03, with a payout ratio of 53%.

• Non-core asset disposals generated £30 million in proceeds.

Outlook and guidance

• Challenging market conditions expected to persist in early 2026, with modest improvement anticipated in H2 if demand recovers.

• Price increases in February 2026 should offset anticipated cost inflation; margin headwind expected in 2026 due to production and inventory management.

• Long-term fundamentals remain strong, with operational leverage and cash generation expected as markets recover.

• Revenue target of £600 million and margin improvement to 28% achievable when markets normalize.

• Capex for 2026 guided at £25–30 million; effective tax rate expected at 26%.