A brief but decidedly downbeat trading update from brick manufacturer Ibstock (IBST) is putting pressure on the shares, down 6.6% to 273.4p.
Ahead of today’s AGM the company reports that it got off to a slow start in 2018 thanks, for the most part, to what it describes as an ‘extended winter season’. This tallies with reports from at least some of the names in the housebuilding sector.
The net result, with higher energy prices also a factor, is a second half weighting to its 2018 numbers. Although trading has improved, this creates a risk of missing earnings expectations if the shortfall cannot be made up.
We recently highlighted the Ibstock investment case here. More positively, the company also confirms this morning that the commissioning of its new factory in Leicester is on track.
Irish stockbroker Davy comments: ‘The tone of Ibstock's trading update is subdued after a slower-than-expected start to the year (largely weather related).
‘No financial figures have been disclosed but despite the slow start another year of progress is anticipated, albeit H2 weighted. Our initial sense is that there will be little change to full year forecasts, although the weighting towards the second half introduces some possible downside risk.’
