Demand for bricks remains solid both here and in the US and after a strong set of full year results, Ibstock (IBST) is anticipating 'another year of progress in 2016'. That however didn't stop shares in the brickmaker slipping 2.4% to 196.2p as investors doubtless mulled the ifs and buts of a slower 2016 start for UK brick sales into the RMI (Renovation, Maintenance and Improvement) market.
RMI remains the dog that hasn't barked and the long anticipated recovery in this segment of the construction sector is still proving frustratingly elusive despite being consistently trailed by builders, material makers and industry bodies alike over the past few quarters as the upside risk to watch.
That notwithstanding, Ibstock's first results as a listed company are nothing if not solid. Group revenue is up 10.6% to £412.8 million in the year to the end of December while adjusted EBITDA leaped 64.7% to £107 million.
Ibstock reported strong free cashflow from operations of £69 million while reducing net debt to £145 million which works out as less than 1.4x adjusted EBITDA; this was achieved at a faster rate than anticipated.
Outlook, while sanguine, still hinted at issues in the year ahead: 'while it is early in the year to have any real visibility, at this point our expectations for the full year remain unchanged despite a slower start for UK brick sales into the RMI market.'
