Ibstock has cut its full-year earnings forecast after reporting weaker than expected demand in the third quarter (Q3) of 2025.
The firm now expects adjusted EBITDA for the second half to be in line with the £42m delivered in the first six months of the year.
It blamed a “more uncertain near term backdrop” in its core construction markets, which has led to weaker than expected demand.
In a 10 October announcement to the London Stock Exchange, the Leicestershire-based building products manufacturer said volumes in both its clay and concrete divisions fell during the quarter.
The trading update, covering the nine months to 30 September, noted that the decline was most evident in the new-build residential sector, which continues to make up the bulk of its customer base.
This marks a sharp contrast with the first half of the year, when the company reported an 8.6 per cent rise in group revenue to £193m.
According to the latest data from the Department for Business and Trade, brick deliveries fell by 5.2 per cent in August compared with the same month last year, and were 3.3 per cent lower than in July.
Ibstock, which says it has a UK brick market share of around 40 per cent, had seen early signs of stabilisation in the spring, before demand began to soften again in Q3.
Although the latest trading update said Ibstock’s market share remained stable year on year, its ability to secure price increases was “limited” due to changing sales mix and softer demand.
Chief executive Joe Hudson said that near-term market challenges had “impacted momentum” but stressed the group was focused on execution and preparing for recovery.
He said: “The group has continued to make good operational progress and maintain share. We will continue to focus on strong execution and progressing our long-term strategic growth projects.”
The company said its factories ran more efficiently in Q3, and that tight controls on spending had delivered a “solid” cash performance.
But net debt at the end of 2025 is expected to exceed previous guidance, although leverage remains within covenanted limits at around two times EBITDA.
Earlier this year, Ibstock restarted production at several of its factories in anticipation of an upswing in the UK housebuilding market, supported by the government’s five-year plan for 1.5 million new homes.
It also reported in August that its new Atlas factory in Walsall was “ramping up well”.
The facility forms part of a broader modernisation strategy following the closure of its Lancashire plant in 2023 and its Surrey site earlier this year, both of which were shuttered amid falling demand.
Despite the more pessimistic earnings forecast, Ibstock’s share price increased in early morning trading, rising from an opening 127p to 130p by 10am.
