Brick factories investment is on track

The brickmaking group saw sales revenue and pre-tax profits fall in the first six months of the year.

Revenue of £222.7 million for the six months the end of June was down 14 per cent from £259.3m in the first half of 2022.

Pre-tax profits slipped 42 per cent from £51.2m to £29.8m.

It is investing £75 million in the Atlas site at Stubbers Green Road and the Coppice Lane factory with red3evelopment on track to commission from the end of this year.

The capital invested across the development projects up to the end of June was around £55m, with the remaining £20m to be invested over the next nine months.

Leicestershire-based Ibstock is investing to maintain the lowest cost, most efficient and most sustainable capacity in the industry. The redevelopment of the Atlas plant is on track to commission from the end of 2023.

It will increase clay brick capacity by more than 100 million bricks and will produce the UK's first certified carbon neutral brick. Atlas has also been selected as our first 'pathfinder' factory, piloting new, more sustainable production technologies and processes before they are rolled out across Ibstock's wider UK factory network.

The new Atlas factory will produce bricks with around 50 per cent less embodied carbon than the original factory. This will be achieved through a range of solutions including the use of energy efficiency and heat optimisation technologies, renewable electricity and a shift to electric mobile plant.

The linked investment at the other Aldridge factory is focused on commissioning new driers and packaging equipment.

Chief executive Joe Hudson said: "Our first half performance demonstrates our resilience in a subdued market environment, with lower customer demand across both new-build and repair, maintenance and improvement segments.

"Our focus on customer service and commercial execution, coupled with disciplined management of capacity and costs, has enabled us to deliver a result marginally ahead of our expectations, despite more challenging trading conditions.

"We have continued to make strong progress with our strategic investment plans that will underpin Ibstock's future growth and enhance our industry leadership position. By focusing on expansion, diversification and innovation, we are building new capabilities in faster and sustainability-led growth segments of the UK construction market."

Mr Hudson said that although overall sales volumes were down significantly in the first half, demand showed improvement across the period.

Against the current backdrop of reduced demand and with industry capacity increasing in 2024, Ibstock has announced a proposal to close its higher-cost Ravenhead wire-cut brick factory in North West England. Subject to consultation, closure would reduce the group's current clay brick network capacity by around 40 million bricks.