Ibstock, the largest brickmaker in the UK, announced a significant decline in sales performance during the third quarter of this year, with revenues falling 22% below forecasts in the three-month period ending in September. The company responded to weakening demand by reducing production levels by a fifth and implementing cost-control measures to manage inventory levels and preserve cash flow.
The downturn reflects broader challenges in the UK housing sector, with brick market volumes declining 17% year over year in July and August, with conditions remaining weak through October. The second profit warning issued by Ibstock this year indicates the company now expects full-year earnings to fall materially short of prior guidance, with profits forecast in the mid-£40m range compared to previous analyst expectations of £59m.
The company’s difficulties come as government housing targets face significant headwinds. The Office for Budget Responsibility recently reduced its forecast for new home construction by 190,000 units through 2031, while the housing secretary has indicated only a slim likelihood of achieving the government’s goal of building 1.5 million new homes during the current parliamentary term.
Ibstock criticized the government’s timing on a housing support initiative, noting that while the Your First Home scheme represents a potentially meaningful intervention to assist first-time buyers with smaller deposits, its delayed launch until April 2027 has created additional near-term pressure on demand. The company acknowledged the program’s potential to support longer-term market confidence and affordability but emphasized that more immediate stimulus would be beneficial for the sector.
Market reaction to the announcement was sharp, with Ibstock’s share price falling as much as 13%, making it the largest decliner on the London stock market on Monday. The company’s overall market valuation has declined by approximately half over the preceding twelve months to £277 million.
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