New build housing acitivty driving demand for bricks
Construction activity in the UK has given brick producer Ibstock a 鈥榬obust鈥� first six months in line with expectations, the firm reported in its latest half year results
Ibstock said revenue increased 8.6% to 拢228m, up from 拢210m last year. Pre-tax profit was also up by 2.6% for the six months ended 30 June 2017.
The firm said UK brick volumes had been 鈥榳ell ahead鈥� driven my good activity levels in the new build housing sector, but further growth had been held back by capacity constraints.
Ibstock, which has 19 brick plants in the UK, is investing in increasing its soft mud brick production capacity and reported that its new Leicestershire brick factory would begin commissioning in the last quarter of the year.
The factory is expected to hit 50% capacity next year and once at full capacity will be able to produce 100 million bricks per year, expanding UK domestic brick production by 5%.
The firm added that plans to expand capacity at its Staffordshire blue brick plant are also on track.
However, the firm said its US business has been flat due to a slowdown in multi-family and non-residential projects across the North-East and Mid-West regions of the US.
Wayne Sheppard, chief executive at Ibstock, said: 鈥淟ooking ahead, the longer term fundamentals underpinning the new-build housing market in the UK - government support, good mortgage availability and an undersupply of new homes - remain in place, although we continue to be alert to any changes in customer confidence stemming from political uncertainty after the recent General Election result and the on-going Brexit negotiations.
鈥淭he group remains strongly cash generative, we are investing for further growth, and our expectations for another year of progress are maintained.鈥�
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