Brick production problems prompt Ibstock profit warning

Brick giant Ibstock issued a profit warning to the city this morning after production problems at its UK factories.

Ibstock said it is struggling to meet demand after brick output from its plants fell below anticipated levels.

The company will now  boost maintenance work at its factories over the next year leading to an increase in shutdowns.

Ibstock said: “The Group’s UK brick factories have been producing at, or close to, full production capacity for an extended period.

“In recent months however, particularly in July, production has been lower than expected and despite corrective measures output, and therefore cost recovery, in the second half of the year is now anticipated to be below expectations.

“A twelve month period of increased maintenance activity is now planned to ensure the factories can operate at sustainable levels to meet continued increasing demand.”

Profits for the year to December 31 2018 are now expected to be in the rangeof £121m to £125m compared to previous forecasts of £130m to £134m.

Joe Hudson, CEO, said: “Demand in our UK brick markets is robust and the outlook for our UK Clay business remains encouraging, supported by the ongoing need for new housing.

“However, following my appointment as CEO, the Group has completed a review of its brick manufacturing assets which has identified a number of measures that are required to sustain the quality and range of our production output.

“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.

“We will be working closely with all customers to ensure we continue to meet their demand requirements over the second half.”

from Construction Enquirer http://www.constructionenquirer.com/2018/07/30/brick-production-problems-prompt-ibstock-profit-warning/

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