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Summary
- Shares of Ibstock Plc (LON:IBST) advanced a little more than 11 per cent on Thursday.
- The company has said it observed a continuation of improving market trends in the Q4 FY20 with solid sales volume for clay bricks.
- The company reclaimed EBITDA margins to nearly previous year levels in Q4 2020.
Shares of Ibstock Plc (LON:IBST), the Leicestershire-based infrastructure component maker, advanced a little more than 11 per cent in the early afternoon deals on Thursday, 21 January,
after the company said it expects to report adjusted EBITDA for 2020 ‘modestly above’ the previous guidance. Ibstock Plc, in the trading update in October 2020, had provided an EBITDA guidance of £50 million.
The clay bricks manufacturer has said that it observed a continuation of improving market trends in the October-December quarter of FY20 with solid sales volume for clay bricks and modestly ahead sales volume for concrete as compared to the same period in 2019.
(Image source: ©Kalkine Group 2021)
Ibstock rises 11%
Following the announcement, the shares of Ibstock topped the benchmark FTSE 250 index amassing a gain of more than 7 per cent in the opening hour of the session itself on Thursday. As the trading progressed, the stock of Ibstock Plc surged as much as 11.07 per cent to an intraday high of GBX 218.60 from the previous closing price of GBX 196.80.
At the current day’s high price, the stock of Ibstock is still trading 32 per cent lower from the 52-week high level of GBX 323 apiece. After 45 minutes of opening, the stock continuously traded above GBX 205 holding and extending the morning gains. Over the course of one year, the stock has not been able to offset the Covid-induced market losses.
During the eight-and-a-half-month period between 17 March and 2 November 2020, the stock recognised a minimal gain of just 0.6 per cent after a series of gains and losses. Notably, the shares have added a little over 33 per cent to-date after rebounding back to near pandemic crash levels in November.
Quarterly update
- The Ibstock group has recognised a full-year revenue of around £315 million, down by 23 per cent as against the net earnings of 2019.
- The revenue realised in the H2 FY20 dropped by 10 per cent on a year-on-year basis.
- A better-than-expected demand in newly built houses, as well as the repairs, maintenance, and improvement benefitted the company in Q4.
- Restructuring programmes, including the remaining cost and capacity actions, have been successfully completed in Q4 after the company outlined them to be finished by the end of 2020.
- The company reclaimed EBITDA margins to nearly previous year levels in the final months of 2020 following the improved sales volume in Q4.
- The company is poised to grow in the current year following the good momentum achieved through the end of 2020 with the expected changes in Help-To-Buy scheme and stamp duty regulations.
- The government policy, structural deficit of housing and the persisting regime of low interest rates have supported the group in 2020.
- Ibstock group has also finished an extension to its £215 million revolving credit facility by a period of 12 months to March 2023 during Q4 FY20.
