IN Brief:
- First-half revenue fell to £164.2m, while adjusted EBITDA declined to £25.7m.
- Production was reduced by 20 million units to align factory output and inventory with demand.
- A £24.7m non-cash impairment reflects the delayed recovery of markets served by mothballed facilities.
Ibstock reduced production by 20 million units during the first half of 2026 as weak UK construction demand pushed revenue down 15% and contributed to a £26.6m statutory loss before tax.
Revenue for the six months to 30 June fell from £193.4m to £164.2m. On a like-for-like basis, excluding businesses subsequently exited, the decline was 10%, while adjusted EBITDA dropped from £35.5m to £25.7m and the margin narrowed from 18.4% to 15.7%.
The results include a £24.7m non-cash impairment against mothballed facilities, reflecting a later recovery than previously assumed. A further £0.9m inventory write-off related to temporarily closed sites, taking exceptional items affecting operating profit to £25.6m.
UK domestic brick deliveries during the first five months of the year were 8% below the corresponding period. Ibstock’s comparable brick volumes fell 7%, allowing the manufacturer to report an increase in domestic clay market share despite the wider contraction.
Management reduced output and controlled inventory to align production with demand. That limited the accumulation of stock, but lower factory utilisation weakened manufacturing cost absorption and placed additional pressure on earnings.
The clay division generated £119.9m of revenue, down from £133.5m, and adjusted EBITDA of £23.4m, compared with £32.8m. Core clay sales were £118.1m, with stronger exposure to new-build residential and wire-cut products offset by subdued repair, maintenance, and improvement activity and weaker demand for soft mud bricks.
Concrete revenue fell 11% on a like-for-like basis to £44.3m. Private residential and repair markets remained difficult, particularly in flooring products, although rail infrastructure demand showed signs of improvement and provided a partial counterweight.
Pricing was marginally ahead of the previous period after an annual increase in February. Ibstock introduced a temporary fuel and energy surcharge in June as higher input costs persisted, with energy hedging covering 85% of requirements for the first three quarters of 2026.
The difference between product categories gives a more useful signal than the group headline alone. New-build housing and wire-cut brick demand held up better, while softer activity in refurbishment, London, the South East, and soft mud products affected facilities designed for those markets.
That imbalance underpins the impairment on mothballed assets. The charge does not represent a cash payment during the period, but it reduces the carrying value assigned to capacity whose expected recovery and future cash generation have been pushed further out.
Ibstock continued investing in newer production lines despite the weak market. Its Atlas pathfinder factory is complete and producing 12 planned product lines, including products in a range certified under the CarbonNeutral Protocol, while the Nostell ceramic façade facility has entered final commissioning and testing.
The Nostell programme has been extended to broaden capability and product range in response to customer demand. First orders have been received for products from the facility, although the ramp-up contributed a £2.5m net cost within the clay division during the half year.
Projects passing through Building Safety Act gateways also affected the Ibstock Futures operation, where delays reduced sales. Approval and design timing can therefore reach beyond developers and contractors into manufacturers supplying façades and other specialist products, particularly where orders depend on a scheme clearing a defined regulatory stage.
Cash generation weakened alongside trading. Adjusted operating cash flow moved from an £11.3m inflow to a £7.2m outflow, adjusted free cash flow was negative £22.3m, and net debt increased to £151.3m at the end of June from £120m at the end of 2025.
Leverage stood at 2.5 times on the group’s banking-covenant basis, below its 3.0-times limit, with £63m of undrawn committed facilities. Ibstock expects stronger cash generation during the second half and leverage to move towards two times by year-end.
The company expects private housebuilding and repair activity to remain subdued in the near term. It forecasts second-half adjusted EBITDA above the first-half result, but says the full-year outcome is likely to be around the lower end of the current analyst range of £59m to £68m.
The production cut shows how quickly manufacturers must adjust fixed industrial capacity when construction demand weakens, while the Atlas and Nostell investments leave additional capability ready for markets that have not yet recovered. Ibstock is therefore carrying the cost of restraint and expansion at the same time — an uncomfortable position, but a familiar one for materials producers waiting for housebuilding volumes to return.
