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Ibstock says trading has started to improve as builders returned to work

Clay brick volumes slumped by 90% in April amid COVID-19 lockdown but have improved, showing a 70% decline, since builders began returning to work

Ibstock Plc - Ibstock says trading has started to improve as builders returned to work

Ibstock Plc (LON:IBST) told investors that sales in the first ten weeks of 2020 were modestly below the levels seen in the preceding ten week period, amidst more subdued market conditions.

The decline since late March is described as ‘sharp’ as the coronavirus (COVID-19) pandemic impacted its construction and housebuilding customers closed sites.

In April, clay brick volumes fell by around 90% year-on-year though volumes of concrete remained relatively more resilient, the company added.

READ: Ibstock upgraded to 'buy' by UBS

He building materials supplier noted that trading conditions have started to improve in recent weeks as the construction and housebuilding sectors have begun to return to work. Clay brick volumes remained around 70% below the prior comparative period, and, concrete volumes are presently down around 50%.

Group revenues for the three months ended March 31 reduced by 10%, and, 75% in the subsequent two months to May 31.

“With the health and safety of our colleagues remaining our top priority, the phased return to production is underway, to support our customers and help the UK construction sector get building again,” Ibstock said in the statement.

“Current trading conditions remain difficult but the combination of the cost reductions, restructuring measures and improved liquidity have strengthened the Group's ability to meet current challenges and benefit from the eventual recovery in its core markets.”

Ibstock noted that it is keeping customer demand levels under close review and it said it will be able to restart manufacturing at its sites over the coming months.

Updating on its finances, Ibstock said net debt amounted to £105mln at the end of May, while it retains £215mln of headroom via revolving credit facilities and it has been deemed eligible to access the UK government’s Covid Corporate Financing Facility.

Formal guidance remain absent, following its prior withdrawal.

Quick facts: Ibstock PLC

Price: 195.6 GBX

LSE:IBST
Market: LSE
Market Cap: £801.1 m
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