There were mixed share price fortunes for two of the UK’s listed brick makers as both announced job cuts but also pointed to hopes of returning demand as the building and construction sector gets back to work.
Northampton’s Forterra (FORT) was up 5.4% to 219.8p on its announcement while Leicestershire’s Ibstock (IBST) slipped 1.3% to 198p on its own news.
Both firms have reported a plunge in sales since March, owing to government-imposed lockdown measures to contain the Covid-19 pandemic.
Forterra said it was taking steps to restructure the business. This could lead to 225 job cuts as revenue slumped 39% in the five months through May year-on-year.
The actions would mostly lead to job losses from the company's concrete products facilities.
BIG PLUNGE IN SALES
The sales plunge in the five months through May, was paced by an 86% and 62% slump in sales in March and April respectively.
Daily despatches of the company’s brick & block products had now recovered to approximately 50% of corresponding 2019 levels as its customers gradually reopened their operations.
Ibstock also said it was reviewing steps to scale back operations in an effort to slash costs. This is expected to translate into a 15% cut in its workforce.
During April, volumes in the company’s clay division fell by around 90% year on year, whilst exposure to infrastructure and RMI markets kept volumes in its concrete division relatively more resilient.
Revenue for the three months to 31 March 2020 was down by about 10% on-year.
As the construction and housebuilding sectors had begun to return to work over recent weeks, there had been a modest recovery in clay brick sales although volumes currently remain around 70% below the comparative period and concrete volumes were now at around 50% of those from the same period in 2019.
