Ibstock, the clay bricks and concrete product manufacturer shares are trading up 5% to 161p after strong profits.
Strong demand in clay and concrete markets resulted in strong trade with revenues of £409m in 2021, up £93m since 2020.
In the group’s clay segment, sales volumes for the year were somewhat better than forecasts at the start of 2021. The revenue say a 31% increase from 2020. The performance in 2021 benefited from a minor price increase and the economy’s recovery from pre-covid levels as compared to previous years.
Revenue climbed by 25% in their concrete sector from 2020 to 2021, with considerable volume gains in all product categories, as well as advances in the residential and infrastructure markets. To deal with the impact of considerable cost inflation in 2021, the division used a dynamic pricing methods. This was primarily due to increases in selling prices, with like-for-like sales volumes remaining relatively constant.
The reported profits before tax swung back from a loss of £24m in 2020 to a profit of £65m in 2021 due to lower exceptional costs and an exceptional credit of £5.2m. The net gains comprises of land disposal amounting to £2m, £2.3m from closure of sites and £0.3 from one-off operating costs.
The firm has plans to invest £50 million over 2022 in Atlas, Aldridge and Nostell projects to meet their medium-term growth objectives.
Joe Hudson, Chief Executive Office, Ibstock, stated, “our 2021 results reflect both continued robust demand across our markets and strong operational execution. Despite market-wide challenges arising from cost inflation and supply chain pressure, we have delivered a result ahead of the Board’s expectations, and are well positioned for future growth.”
“Today, we also set out a path for growth and value creation over the next five years, combining expansion of our core business with accelerated diversification into new, fast growing areas of the UK construction market. These strategic ambitions are underpinned by clear financial objectives and capital discipline, which are reflected in the new medium term financial targets. We expect to generate significant additional capital, in excess of our current commitments, over the next five years, which will support both further growth investments and additional shareholder returns.”
Total dividends are 7.5p with final dividends of 5p as a reflection of the groups financial growth.