Britain’s biggest brickmaker Ibstock hit by construction slump

Shares in Britain’s biggest brickmaker fell on Friday after it warned the ongoing construction slowdown will hit profits this year.

FTSE 250-listed Ibstock cited a ‘more uncertain near-term economic and political backdrop’ as the group told investors it saw weaker than expected demand within its core construction markets over the third quarter.

Britain’s construction sector shrank for a ninth consecutive month in September, with bosses slashing jobs and holding back work in amid fears they will be hit with a tax raid in Rachel Reeves’ upcoming budget.

The downturn has intensified scrutiny of Labour’s pledge to build 1.5million homes this parliament as new-build data has continued to disappoint.

For Ibstock, it has meant weaker demand for its clay and concrete division.

‘Customers were more cautious as the quarter progressed, with these conditions now assumed to continue through the remainder of the year,’ Ibstock said.

Ibstock has been boosting productive capacity at several of its clay factories

It comes as Ibstock has been boosting productive capacity at several of its clay factories in anticipation of much higher demand and a UK housing market recovery.

The group now expects to post underlying earnings before nasties of £72million for 2025, compared to previous guidance of £77million to £82million.

Boss Joe Hudson said: ‘With clear, long term structural imperatives for residential construction growth, it is disappointing that additional near term headwinds are impacting momentum in our markets in the latter part of the year.

‘Whilst it remains difficult to predict the pace and timing of market recovery, we will continue to focus on strong execution and progressing our long term strategic growth projects. These initiatives, combined with the increasing contribution from our recent investments, leave us well positioned to benefit as the market returns.’

Ibstock shares fell 6.9 per cent to 124.6p in early trading, bringing 2025 losses to almost 30 per cent.

It marks the second profit downgrade this year after Ibstock in June flagged a spike in fixed costs and weaker than expected selling prices.

Aarin Chiekrie, equity analyst at Hargreaves Lansdown, said: ‘This weakness is expected to continue over the final stretch of the year, with uncertainty around property taxes and the later-than-usual Autumn Budget due on 26 November likely to keep a lid on construction starts in the near term. A

‘While it’s difficult to predict the pace and timing of a building market recovery, another downgrade does raise some questions around whether management’s guidance is built on shaky foundations.

‘With high fixed costs and dividend payments having already been trimmed back, Ibstock will need to keep an extra tight grip on cash flows if it wants to avoid disappointing investors again.’

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