Brick supplier Ibstock’s shares plummeted by 13% this week due to lower levels of production.
It had issued a trading update in May which cited poor weather in the first half of the year as the reason for lower than expected profits, but that it expected things to improve in the second half.
However, in a trading update released on Monday, it stated that production was lower than expected, and so output in the second half of the year is now predicted to be below expectations.
Shares on the London stock exchange dropped from 278p to 241p, down more than 13%. Shares remain at 241p today with little variation since the drop.
Ibstock now expects earnings before interest, taxes, depreciation and amortisation to be between £121 million and £125 million, down from £131 million.
CEO Joe Hudson said that due to the demand for more housing, the UK brick markets remained “robust” and the outlook was “encouraging”.
He announced that the company was beginning a 12-month period of increased maintenance to ensure its factories can meet current demands.
He said: “While the resulting additional maintenance shutdowns and extra spending on plant maintenance and refurbishment will have a short-term impact on our financial performance, we firmly believe that it is the right thing to do for our customers and to maximise long-term value for shareholders.”
The update also noted that Ibstock’s new Eclipse factory in Leicestershire is beyond the scope of this announcement as it is not yet working at full capacity – but is expected to be by the end of the year.
