Construction News

Tue April 20 2021

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Ibstock sinks to a loss

10 Mar Brick maker Ibstock made a pre-tax loss of £24m in 2020 as Covid costs mounted up.

Brick demand plummeted in April 2020, to just 10% of 2019 levels
Brick demand plummeted in April 2020, to just 10% of 2019 levels

In what the chief executive described as ‘a testing year’, Ibstock saw revenue decline 23% to £316m (2019: £409m).

The pre-tax profit of £82m reported in 2019 became a loss of £24m in 2020, not helped by exceptional costs of £36m related mainly to Covid-19 and restructuring.

Brick demand fell to just 10% of pre-Covid levels in April 2020. From that low point demand recovered steadily and by July demand was back to around 60% of 2019 levels. By the end of 2020, Ibstock’s brick revenues had risen back to around 85% of 2019 levels.

Revenue from the brick division, Ibstock Clay, was 29% down at  £213m (2019: £300m).

Ibstock Concrete’s revenue of £103m (2019: £109m) was only down 5% over the year, thanks to its higher exposure to the domestic repair, maintenance and improvement market, which broadly held up.

Chief executive Joe Hudson said: "2020 was a testing year, as Covid-19 created some exceptional challenges for our business and our people.”

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He said: “Market demand recovered faster than our expectations as we progressed through 2020, and trading in the initial period of 2021 has started well, with clay sales volumes slightly ahead of the run rates achieved in Q4 2020. While we remain mindful of the economic uncertainties and disruption associated with Covid-19, we are encouraged by the strength of trading over recent weeks and are confident for the year ahead.”

UK brick market 2020

Overall, in 2020 the UK market consumed around 1.88bn bricks, compared to 2.45bn in 2019.

The ratio of domestic production versus imports remained much the same at around 18%.

In 2019, 1.99bn bricks were made in the UK and 460m were imported

In 2020, 1.54bn bricks were made in the UK and 340m were imported.

Industry domestic finished goods inventory levels fell by over 25% over the course of 2020.

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MPU

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