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UK-based building materials manufacturer Ibstock has lowered its outlook for full-year earnings, saying its annual profit is likely to be at the lower end of market expectations as the country's construction sector continues to face weak demand. The company reported lower revenue and a pre-tax loss for the first half of the year, affected by subdued private housebuilding activity, higher energy costs and a non-cash impairment charge. Despite expecting improved earnings in the second half, Ibstock said market conditions remain challenging due to economic and political uncertainties.
UK building materials manufacturer Ibstock has said its full-year financial performance is expected to be around the lower end of market expectations as the construction sector continues to remain weak across the country.
The company said it expects stronger adjusted core profits in the second half of the year. However, demand in the near term is likely to remain under pressure due to weak private housebuilding activity, lower spending on repair, maintenance and improvement projects, higher energy costs and continued political uncertainty in the UK following the recent change in the country's prime minister.
Britain's construction sector, particularly residential development, has been facing a prolonged slowdown. Rising inflation linked to the conflict involving Iran has pushed up the cost of raw materials, energy and supply chains, increasing pressure on builders and construction product manufacturers. The housing market has also been affected by cautious buyer sentiment and slower project launches, which have weighed on demand for construction materials.
To manage rising operating costs, Ibstock said it introduced its annual product price increases in February and later imposed a temporary surcharge in June to offset higher energy and fuel expenses.
For the six months ended in June, the company's revenue declined 15% year-on-year to GBP 164 million from the corresponding period last year. Revenue from its clay bricks business fell 8%, mainly due to weaker demand in the repair, maintenance and improvement segment.
Ibstock also reported a pre-tax loss of GBP 27 million during the first half, compared with a pre-tax profit of GBP 8 million a year earlier. The loss was largely driven by a GBP 25 million non-cash impairment related to its mothballed soft mud brick manufacturing facilities.
Based on current market conditions, the company now expects its adjusted core profit for the financial year ending in December to be around the lower end of the analyst forecast range compiled by the company, which stands between GBP 59 million and GBP 68 million for 2026.
The update comes as several construction-related businesses across the UK continue to report softer demand, with developers remaining cautious on new residential projects amid elevated costs and an uncertain economic environment.
Source Reuters
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