This article first appeared on GuruFocus .
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Revenue:Group revenue for the first half was GBP164.2 million, down 15% on a reported basis and 10% on a like-for-like basis from GBP193.4 million in the prior year.
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Adjusted EBITDA:GBP25.7 million, down from GBP35.5 million last year.
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Adjusted EPS:0.7p, compared with 3p in the prior period.
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Clay Revenue:Total revenue was GBP119.9 million, down GBP13.6 million year-on-year, with core clay revenue (excluding futures) down 8% to GBP118.1 million.
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Clay Adjusted EBITDA:GBP23.4 million, down from GBP32.8 million last year, with margin reducing to 19.5%.
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Concrete Revenue:GBP44.3 million, down 26% on a reported basis and 11% on a like-for-like basis.
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Concrete Adjusted EBITDA:GBP3.7 million, down from GBP6 million last year, with EBITDA margin at 8.3%.
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Adjusted Free Cash Flow:Outflow of GBP22.3 million, compared with an outflow of GBP9.6 million last year.
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Working Capital:Outflow of GBP17.2 million, compared with GBP12.4 million in the prior period.
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CapEx:Reduced to GBP15.2 million, compared with GBP20.9 million last year.
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Net Debt:GBP151.3 million at 30 June, with leverage at 2.5 times on a banking covenant basis, compared with 1.9 times in June 2025.
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Interim Dividend:Proposed at 0.5p per share.
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Domestic Brick Deliveries:UK domestic brick deliveries for the first five months were down around 8% year-on-year, with Ibstock comparable sales volumes down around 7%.
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Land Sales Program:Expected to deliver around GBP50 million over the next five years, up from a previously expected GBP25 million to GBP30 million.
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Land-Based Income:Currently generating around GBP2 million of annual income, with potential to more than double.
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Release Date: August 05, 2026
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
Positive Points
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Ibstock PLC ( LSE:IBST ) gained domestic clay market share in H1 2026, with volumes down 7% versus an 8% market decline.
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The company successfully implemented price increases and a temporary surcharge to offset cost inflation, with pricing expected to broadly offset costs in H2.
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Major capital projects, including the Nostell facility, are largely complete, positioning the company for improved free cash flow as CapEx normalizes.
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The land development and sales program is expected to deliver around GBP50 million over the next five years, up from the previous GBP25-30 million estimate.
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The company is making progress on strategic levers, including product innovation (e.g., Atlas, Anderton Gen3) and efficiency improvements, with new and sustainable products now representing 25% of group revenue.
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Net debt and leverage are expected to reduce towards 2x by end of 2026, supported by stronger H2 cash generation.
Negative Points
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Group revenue declined 15% on a reported basis and 10% like-for-like, reflecting challenging market conditions and the Forticrete roofing sale.
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Adjusted EBITDA fell to GBP25.7 million from GBP35.5 million, driven by lower volumes, fixed cost absorption, and cost inflation.
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Net debt to EBITDA leverage increased to 2.5x from 1.9x year-on-year, reflecting lower earnings and higher net debt.
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The company expects full-year outturn to be around the lower end of current market expectations, with no meaningful market improvement anticipated.
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Deliberate production and inventory management actions reduced EBITDA by approximately GBP5-6 million in H1, with further fixed cost absorption headwinds expected in H2.
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The calcined clay exclusivity period ended without a contract, and discussions are broadening to other partners, indicating potential delays in commercialization.
Q & A Highlights
Q: What is the company's full-year guidance, and how should we bridge the gap between H1 and H2 EBITDA performance? A: Simon Bedford (Interim CFO) explained that the H2 improvement is driven by several factors: a catch-up in pricing as the difference between pricing and cost normalizes, low single-digit growth in clay volumes, and a stronger performance from the concrete and futures businesses. The concrete division's investment projects will be finalized, delivering product to the market, and rail infrastructure demand is expected to improve. The fixed cost drag from the Nostell ramp-up will also moderate in H2. The company expects H2 adjusted EBITDA to be stronger than H1, with the full-year outturn around the lower end of current market expectations.
Q: Can you provide more detail on the fixed cost absorption headwind expected in H2, and are there any further price increases planned? A: Joe Hudson (CEO) stated that no further price increases are planned beyond the February increase and June surcharge, which will flow through fully for the rest of the year. Simon Bedford (Interim CFO) added that to balance sales and production demand, the company expects to produce between GBP45 million and GBP55 million fewer bricks in H2 versus H2 of last year, resulting in a fixed cost absorption headwind. However, the full-year benefit of the cost savings from the 2025 rightsizing actions will pull through in H2.
Q: How dependent is the year-end leverage target of ~2x on market recovery, and what levers are available to reduce debt if the market doesn't recover? A: Simon Bedford (Interim CFO) confirmed that the deleveraging is naturally driven by the second-half trading weighting and does not include any strategic actions. The confidence is based on a small improvement in brick volumes, a stronger concrete business, and further futures sales. The first half is seasonally difficult, so the natural cash generation in H2 should bring leverage towards 2x by year-end.
Q: Where are the clay market share gains coming from, and how should we phase in the Nostell revenue opportunity? A: Joe Hudson (CEO) attributed the share gains to the company's broad product range, deep customer relationships, and national footprint. He noted that with few players in the market, someone must be losing share. Regarding Nostell, he explained that specification products have a 12-18 month lead time for mid-to-high-rise projects. Orders are already in the low millions, with inquiries in the tens of millions. The ramp-up will take time, but the company expects it to reach its business case within three years.
Q: What were the main points of attrition that led to the calcined clay exclusivity period ending without a contract? A: Joe Hudson (CEO) declined to provide specific details due to confidentiality, but stated that negotiations are complex. While still in talks with the key counterparty, the company is open to broadening discussions to other partnership opportunities to maximize long-term value from the strategic asset.
Q: What is the expected CapEx run-rate going forward, and how is the company managing credit risk in the current environment? A: Simon Bedford (Interim CFO) guided that sustaining CapEx will be around GBP20 million, plus GBP2-3 million for small improvement projects, with no major growth investments planned. Joe Hudson (CEO) stated there are no major credit concerns currently. The company has comprehensive credit insurance and is not seeing strain with larger customers. Some smaller subcontractors are facing challenges, but these are typically supplied through distribution networks, and no major credit issues have emerged.
Q: Are you happy with current inventory levels, and was there a destocking impact from the channel in H1? A: Joe Hudson (CEO) acknowledged that inventory levels are higher than desired, prompting destocking actions this year. He noted that channel destocking did occur, particularly in Q1, but Q2 saw more optimistic dispatch trends. The company will continue to flex production to manage inventory carefully.
Q: Was there a difference in pricing between soft mud and extruded products, and what is the timing for the increased land sales forecast? A: Joe Hudson (CEO) stated that the general price increase was fairly similar across soft mud and wire cut products, though soft mud has higher production costs that need to be captured. On land sales, the company has increased its forecast to around GBP50 million over the next five years. While some projects are closer, the company will time sales to maximize value, with meaningful inflows expected in the next two to three years.
Q: What is the scale of carbon credit spend, and how much sustainability pull are you seeing from customers? A: Simon Bedford (Interim CFO) explained that the company manages its carbon exposure by buying credits as needed, with no material change in exposure expected. Joe Hudson (CEO) added that sustainability is a holistic consideration for customers, including resilience and long-term performance. While the short-term price premium for sustainable products is debatable, the company believes its strong sustainability credentials, including the Atlas plant, are a key long-term differentiator.
Q: What are the criteria for removing the surcharge, and what is the hedging policy for 2027? A: Joe Hudson (CEO) stated that the surcharge is linked to gas prices, and the company has committed to removing it when costs normalize. However, frequent price changes are disruptive for customers, so the company will be measured in its approach. On hedging, the company is currently 60% hedged for 2027, targeting 80% by budget time. Given market volatility, the company is being cautious and not piling in, but has forward coverage for 2028 and 2029.
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
