‘Grinding it out’: Ibstock swings to loss and cuts dividend amid building slump
One of the UK’s biggest brickmakers has bemoaned a ‘challenging’ housebuilding market as it slashed its dividend and swung to a loss.
Leicestershire-based Ibstock, which is London’s second most shorted stock with a reported short interest of 12.9 per cent, posted a loss of £27m for the first six months of the year, down from a profit of £8m last year.
Revenue for the period slid 15 per cent to £164m, while the company cut its dividend from 1.5p to 0.5p per share.
“Private housebuilding and [maintenance] activity levels remain subdued, with conditions expected to remain challenging in the near term,” Ibstock said.
“With renewed uncertainty around the Middle East conflict coupled with a changing UK political backdrop, we are mindful of the potential near term effects on consumer confidence and the wider construction sector.
“Whilst volatility persists, we will continue to focus on managing capacity, inventory levels and costs and will adapt plans to market conditions.”
The stock has tumbled 30 per cent since the start of the year, joining the likes of housebuilders Vistry, Taylor Wimpey and Barratt Redrow that have all suffered steep selloffs. Vistry is London’s most-shorted stock, with a short interest of 16.7 per cent according to Research Tree.
Despite the slump, analysts at Peel Hunt retained their ‘buy’ recommendation for the stock, adding that the company was “grinding it out in challenging markets”.
“The group continues to pull strategic levers to improve performance, but soft market volumes continue to consume these gains,” Peel Hunt analysts said.
“When volumes recover, Ibstock’s operational gearing should drive a quick improvement in profitability.”