Ibstock Plc (LON: IBST), a leading UK manufacturer of building products, saw its share price decline more than 8% in early Friday trading after the company issued a trading update signaling a slowdown in demand within its core construction markets.
The company attributes this to a more uncertain economic and political environment, impacting both its Clay and Concrete revenue streams during the third quarter of 2025.
Despite maintaining market share, the group anticipates second-half sales volumes to align with the first half, reflecting the prevailing market softness.
The company’s trading update highlights a cautious approach from customers, which intensified as the third quarter progressed. This cautious sentiment is expected to persist throughout the remainder of the year.
While Ibstock has managed to maintain its market share, published industry data confirms it is in line with the first half of 2025, this has not been enough to offset the weaker overall demand.
The shift in sales mix towards new-build residential projects has also limited the firm’s ability to achieve targeted pricing levels.
Ibstock’s core manufacturing networks demonstrated improved productivity and operational efficiency during the third quarter, meeting company expectations.
A strong focus on cash management, including tight control over capital expenditure, working capital, and discretionary spending, resulted in solid cash flow performance. While net debt at the end of 2025 is projected to exceed previous guidance, the group maintains a robust financial standing, with covenanted leverage at year-end anticipated to be around 2 times.
Given the reduced market activity and anticipated pricing pressures, the Board now projects that adjusted EBITDA for the second half of 2025 will be similar to that of the first half. The company remains committed to adapting its network utilization to align with anticipated demand, balancing operational flexibility with financial efficiency and capital returns.
CEO Joe Hudson acknowledged the challenges, stating, “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.”
He further added, “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.”
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