Sales at the UK’s largest brickmaker plunged by more than a fifth over the summer, as it criticised the government for not introducing fresh help for the housing sector faster. Leicestershire-based Ibstock said on Monday that sales slumped by 22% below its expectations in the quarter to the end of September, prompting it to slash production levels by a fifth. Ibstock issued its second profit warning this year and said that UK brick market volumes declined by 17% year on year in July and August, with weak market conditions continuing through September and October.
These production decisions create an additional near-term earnings headwind but are necessary to align output with demand.” The warning by the company, which now expects full-year profits to be “materially below” previous expectations, comes days after the Office for Budget Responsibility cut its forecast for the number of new homes that will be built by 2031 by 190,000. Angela Rayner, the housing secretary, has admitted there is only a “slim chance” the government will meet its goal of building 1.5m new homes this parliament, amid estimates it could miss the target by a third. Shares in Ibstock plunged more than 8% as the company also criticised the government’s decision not to start the Your First Home support scheme, which is designed to help first-time buyers in England buy a new-build home with a 2.5% deposit, until next April.
The company said its cost savings and cash management initiatives are focused primarily on overhead and discretionary spend.
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