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Ibstock has warned that its annual profit will fall below earlier projections due to sustained weakness in the UK construction market, causing shares to drop nearly 15%. The company's clay and concrete division reported lower revenues in the third quarter, and sales in the second half are expected to mirror first-half levels. With core profits anticipated to remain steady at 35.5 million pounds (USD 47.17 million) for the latter half, cautious customer behavior and economic uncertainty continue to limit growth. The sector is further affected by slow residential development and fiscal uncertainties.
Ibstock, the UK-based manufacturer of bricks and concrete, has signaled that its annual profit will fall below earlier projections amid ongoing weakness in the UK construction market, causing its shares to drop by nearly 15% in early trading. The warning highlights the growing challenges for construction material suppliers, as builders reduce activity due to economic uncertainty and a sluggish residential construction market. Advertisement
The company reported that its clay and concrete division experienced lower revenues in the third quarter, and it expects sales volumes in the second half of the year to remain consistent with the first half. CEO Joe Hudson said the company finds it disappointing that near-term market headwinds are slowing momentum despite clear long-term growth potential in residential construction.
Ibstock now expects its second-half core profit to match the first half's 35.5 million pounds (USD 47.17 million). The company noted that cautious customer behavior and the uncertain economy are limiting both sales volumes and its ability to raise prices. Previously, the company had guided full-year core profits to fall within the range of 77 million pounds to 82 million pounds for 2025.
The wider UK construction sector has been under pressure, shrinking for the ninth consecutive month as firms postponed major investments ahead of the government's budget. Analysts from Peel Hunt highlighted that a slow new housing market has contributed to reduced volumes, while general fiscal uncertainty has further restrained investment decisions.
The latest figures reflect ongoing struggles for material suppliers and suggest that the residential construction market may continue to face challenges in the near term. Ibstock and similar firms are navigating an environment where cautious customer spending and market uncertainties are affecting demand, pricing, and profitability.
Source Reuters
5th Jun, 2025
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