Ibstock Plc (LON:IBST) shares jumped in early deals on Tuesday after it issued a bullish outlook for 2019, shrugging off Brexit concerns, while profits jumped in its full-year results.
The FTSE 250 brickmaker said that UK demand had outstripped supply in the year just gone and that it was poised to take advantage of the “robust market environment” as its new Eclipse factory in Leicester entered its first full year of production.
READ: Ibstock moves out of US as it sells Glen-Gery brickmaking business for US$110mln
While Ibstock admitted that the uncertainty caused by Brexit was “unhelpful” and could affect consumer confidence and demand in the short-term, the medium-term fundamentals were “favourable”.
“We have a solid core business with strong market positioning, focused on the UK”, the company said, adding that with its strong balance sheet there was “optionality to invest to drive further growth, both organically and through M&A”.
The group also cited the continuation of the UK government’s Help-to-Buy scheme to 2023, which has promoted increased housebuilding, as well as low interest rates and “good” mortgage availability as elements that suggested that “market fundamentals remain robust”.
In the figures for the year ended 31 December 2018, pre-tax profits jumped 19.1% to £92.5mln while revenues were up 7.9% at £391.4mln.
The company’s net debt had also fallen to £48.4mln compared to £117mln at the end of the previous year, thanks mainly to the sale of its US business Glen-Gery for US$110mln back in November.
The group maintained its final dividend for the year at 6.5p per share, although the total dividend was up to 16p for the year thanks to an increased interim divi to 3p from 2.6p as well as a 6.5p supplementary dividend.
Joe Hudson, chief executive of Ibstock, said the profit growth had been “in line with management’s expectations” and that following the US disposal the company now had “two core businesses, both with leading market positions in the UK” that would provide an “excellent base” for growth.
Shares were up 3.3% at 259.8p.