Ibstock Plc has reported a challenging third quarter as economic and political uncertainty dampened demand across its core construction markets, forcing the building products manufacturer to revise its full-year profit expectations.
Shares were down by more than 10% at the open on Friday.
Like many UK companies, Ibstock is being hit hard by the Labour government’s inept economic policies and tax increases.
Ibstock, which produces clay bricks and concrete products, said customers became increasingly cautious as the quarter progressed. This weaker-than-expected demand affected revenues in both its Clay and Concrete divisions over the three months, and subdued conditions are now anticipated to persist through the remainder of 2025.
“Demand in the Clay and Concrete division has been weaker than expected, reflecting the near-term ‘economic and political’ environment,” explained Derren Nathan, head of equity research, Hargreaves Lansdown.
“Uncertainty around property taxes in the later-than-usual Autumn Budget, due 26 November, could mean construction starts hit a brick wall, so keep one eye on the ripple effect for housebuilders later today.”
Despite maintaining market share ahead of the prior year period and in line with the first half of 2025, Ibstock now expects second-half sales volumes to match those of the first six months. The Group had previously anticipated stronger performance.
In response to the deteriorating market conditions, Ibstock’s board now expects adjusted EBITDA in the second half of 2025 to be similar to first-half levels—a significant downgrade from earlier expectations of improvement.
In interim results released in August, Ibstock said it expected adjusted EBITDA for the year to be between £77 million and £82 million. If they have a similar second half of 2025 to the first, adjusted EBITDA will be closer to the £70 million mark.
“With clear, long term structural imperatives for residential construction growth, it is disappointing that additional near term headwinds are impacting momentum in our markets in the latter part of the year,” said Joe Hudson, CEO of Ibstock PLC.
“In spite of this difficult and uncertain market backdrop, the Group has continued to make good operational progress and maintain share.
“Whilst it remains difficult to predict the pace and timing of market recovery, we will continue to focus on strong execution and progressing our long term strategic growth projects. These initiatives, combined with the increasing contribution from our recent investments, leave us well positioned to benefit as the market returns.”