Brick sales recovering for Ibstock
Brick-making group Ibstock says it is well positioned as the market recovers after the coronavirus lockdown.
The business, which has sites in Cannock and Aldridge, slipped to a pre-tax loss of £52 million in the first six months of this year from a £41m profit a year before.
Sales were down 36 per cent to £131m as production ceased temporarily from late March.
Ibstock has taken decisive actions taken in response to the significant Covid-19 impact. New safe working practices and protocols were introduced, which allowed a phased reopening of production from May.
Clay brick sales volumes recovered to around 60 per cent of last year's levels in June, from 10 per cent in April, with recovery in the builders' merchant channel outpacing house builder sales.
In the concrete business volumes were at 80% of 2019 levels in June from 30 per cent in April.
A group-wide restructuring programme is set to deliver material reduction in fixed cost base, including closure or mothballing of three clay factories and workforce reductions, of to £20m in 2021.
The majority of manufacturing sites have now safely reopened and there was continued recovery in demand last month with clay sales at around 80 per cent and concrete at around 85 per cent of last year's level
Chief executive Joe Hudson said: "The Covid-19 pandemic has created unprecedented challenges for our industry and the wider UK economy. In response, we have taken swift and wide-ranging action to safeguard the future of the business, including some difficult decisions about the future shape of our manufacturing network. Throughout this period, the health and safety of our colleagues has been our key priority, and I would like to thank them all for their dedication and support over the last few months.
"We entered the crisis with a strong balance sheet. Decisive management action at the outset of the pandemic to control costs and preserve cash ensured the Group was adjusted free cash flow positive during the second quarter and we remain in a solid financial position. With new safe working procedures in place, the majority of our manufacturing plants have now reopened and we are encouraged by recent market trends.
"The fundamentals for our markets remain positive, with a substantial housing deficit in the UK and Government policy which is supportive of the role the construction sector will play in the UK economic recovery. The action we have taken to strengthen the business and improve liquidity, including measures to reduce costs and restructure our operations, provide further flexibility and position us well both to meet current challenges and benefit from recovery in our core markets."
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