Ibstock shares jump as British brick maker toasts ‘modestly’ better-than-expected 2021 despite soaring costs
- Ibstock shares have jumped sharply today amid a strong trading update
- Upturn in clay brick sales and strong margins have helped lift the group
lbstock shares jumped sharply on Thursday after the group said its forthcoming full-year results are set to come in ‘modestly’ better than expected.
The FTSE 250-listed brick maker said its first quarter performance had been stronger than expected, driven by an upturn in clay brick sales volumes and decent margins.
The group’s share price was up 7.63 per cent or 12.70p to 179.10p in late morning trading, but over the past year it has fallen by over 18 per cent.
On the up: lbstock shares have jumped sharply today after unveiling upbeat forecasts
Ibstock said its operating environment continued to be ‘characterised by significant levels of input cost inflation, primarily in the categories of energy, freight, carbon and materials.’
It added: ‘In relation to energy, our hedging strategy has positioned us well against a backdrop of elevated prices.
‘We have now substantially covered energy requirements for the first half of the year, have purchased around 75 per cent of requirements for the second half and have over one-third covered for 2023. The Group remains committed to taking the actions necessary to protect and maintain margins going forwards.’
Joe Hudson, the group’s chief executive, said: ‘We’ve made a strong start to 2022, supported by robust demand in our end markets and a dynamic commercial approach to manage input price inflation.
‘Energy prices remain a key focus and our forward buying policy has ensured that around 75 per cent of H2 2022 requirements are covered, with more than a third of 2023 requirements also locked in.
‘Demand in both the new build housing and RMI markets remains robust and, while we are mindful of the broader macroeconomic uncertainties, we now expect to deliver performance for the full year modestly ahead of our previous expectations.
‘We are also pleased to be announcing a £30million share buyback programme, demonstrating our ability to deliver enhanced returns to shareholders whilst continuing to invest in our future growth.’
The company now expects revenues to top £600million by 2026, compared to a turnover of £409million last year, which was the same as in 2019.