Ibstock – recently downgraded profit guidance remains on track
Aarin Chiekrie, equity analyst, Hargreaves Lansdown: “Ibstock shares slipped 5% this morning as management signalled a tougher margin backdrop into 2026, suggesting profit expectations may need to be adjusted down. Ibstock’s major investment projects at its Atlas and Nostell brick factories are largely complete, with both facilities set to enter their production phase this year. While that removes a strain on cash flows, it also brings some additional overheads and looks set to weigh on margins this year while demand remains subdued. As a result, prior market forecasts for 2026 cash profits look a touch too optimistic. How long before end-markets pick back up is the million-dollar question, with the can seemingly continuing to get kicked down the road.
Turning back to 2025’s performance, while brick volumes have risen and helped to drive the top line higher, they’re still some way off the heights of 2022. Market uncertainty ahead of the later-than-usual UK Budget last year kept a lid on construction starts, ultimately causing Ibstock to downgrade its cash profit guidance to around £71mn in October. While the market hasn’t picked up since, a tight grip on costs and some disposals of non-core assets mean that the previously downgraded profit target looks well within reach when full-year results are announced in March.”