Brickmaker and concrete producer, Ibstock (LON:IBST) provided insight into the UK construction industry during the coronavirus lockdown in a trading update released on Wednesday.
Revenue in the first quarter was down just 10%, however, the company revealed a 75% drop in revenue in the two months to 31st May, the period the most strict coronavirus lockdown measures were in place.
The sharp drop in revenue reflects a construction industry that was almost completely shutdown by the government measures.
Many of the larger house builder such as Taylor Wimpey shut sites amid unclear government guidance on who could go to work, and who couldn’t.
However, smaller construction businesses had evidently kept operations open and provided Ibstock with some demand, albeit heavily reduced.
Ibstock said in a statement:
“The Group has taken significant action to address the challenges presented by Covid-19. These measures have included utilising the Government’s Coronavirus Job Retention Scheme for a significant portion of colleagues during the shutdown period, reducing discretionary spend wherever possible and implementing a temporary salary reduction for the Board and the executive leadership team.”
“In addition, in order to ensure that the business remains well-positioned as it emerges from the current crisis, we are conducting a review of all operations. This review is expected to lead to a material reduction in the Group’s fixed cost base, through selective site closures, changes in operating patterns and changes to the size and structure of support functions.”
Highlighting the companies thinking around the market conditions for the rest of the year, Ibstock announced a restructuring programme that would lead to a number of job cuts.
“We have entered into consultations with employees across the Group as part of a series of restructuring proposals, with up to 375 positions, representing around 15 per cent of the Group’s total workforce, potentially impacted as a result of these actions,” Ibstock said.