Ibstock (IBST) H2 2025 earnings summary

Executive summary

• Revenue grew 2% year-over-year to £372 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.

• Major CapEx projects at Atlas and Nostell completed, and cost actions taken to flex capacity and manage overheads.

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

• Generated £30 million cash from land and asset disposals.

Financial highlights

• EBITDA margin declined by 260 bps to 19.1% due to inflation and higher costs from reactivating clay capacity; H2 margin improved to ~20% as cost actions took effect.

• Net debt at £120 million, leverage at 2x, with over £100 million in available liquidity and significant covenant headroom.

• Adjusted EPS fell to 5.7p (2024: 7.7p); dividend per share reduced to 3.0p (2024: 4.0p), payout ratio 53%.

• Adjusted free cash flow was negative at £9.8 million, impacted by inventory build and lower EBITDA.

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

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 (~3%) expected to offset cost inflation; margin headwind expected in 2026 due to production and inventory management.

• Medium-term outlook remains positive, targeting £600 million revenue and 28% margin when markets recover.

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

• Long-term fundamentals remain strong, but near-term demand remains challenging; cautious view maintained.