Ibstock, the manufacturer of building products, has seen revenue and pre-tax profits slide in its results for the year ended 31 December 2023.
Revenue at the Leicestershire firm was down 21% to £406 million, in comparison to £513 million in 2022, as sales volumes “reduced in line with UK domestic brick deliveries.” Ibstock noted that “despite this challenging backdrop, selling prices remained stable through the year.”
Statutory profit before tax, meanwhile, dipped from £105 million in 2022 to £30 million.
During the year a comprehensive operational review was undertaken to reduce fixed cost and align capacity to near term demand expectations. The resulting restructuring programme included a number of actions to temporarily reduce capacity across the business, as well as the permanent closure of two clay brick factories.
Headcount reductions and fixed costs savings with an annualised value of £20 million are to be achieved, with around £5 million of this captured in 2023 and the full amount to be achieved in 2024.
Activity in the early weeks of 2024 has been in line with subdued levels seen in the latter part of the 2023 year for Ibstock, with the company noting: “While remaining cautious, we currently anticipate a degree of improvement as the year progresses.”
Joe Hudson, Chief Executive Officer, said: “We have delivered a resilient performance for the year in what have been very difficult market conditions, and I am proud of the way that colleagues across the Group have responded in such challenging circumstances.
“Our results reflect both continued strong execution and the difficult but decisive actions taken to reduce headcount and realign capacity with near term market conditions.
“The organisational changes implemented during the second half of the 2023 year have created a leaner, more customer-focused business, which will deliver an enduring benefit for years to come.
“In doing so, we have also created a platform to accelerate innovation, with a particular focus on the sustainability of our products and processes. In combination with the strength of our brand and unrivalled product portfolio in the UK construction marketplace, we believe this will unlock significant value over the years ahead.
“As we focus on doing the right things to respond to market conditions in the near term, we are moving towards completion of the key investment projects that will underpin our growth as the market recovers.
“Our investment in new low cost, efficient and more sustainable brick capacity at our Atlas facility, and a significant capacity expansion in the fast-growing brick slips market, are on track and will support our medium-term growth objectives.
“Activity in the early weeks of 2024 has continued to reflect the more subdued demand environment experienced throughout the latter part of 2023. As we look further ahead, it is clear that market fundamentals remain supportive, with significant unmet demand for new build housing in the UK.
“The Group’s conviction in its medium-term prospects is underpinned by an expectation of a return to normalised conditions within its core markets combined with the incremental returns generated from our significant capital investment programme. Although the timing of this recovery is uncertain, Ibstock is well positioned to benefit and to deliver on our growth targets over the medium term.”
