July 30, 2018 / 7:27 AM / in 3 months

Ibstock sees lower first-half core earnings; shares sink 14 percent

(Reuters) - Ibstock Plc (IBST.L) expects first-half core earnings to fall and warned of lower-than-expected brick output in the second half of the year, sending shares of the clay bricks and concrete products maker down 14 percent.

Brick output fell short of expectations in recent months in the UK, the company said, and it cautioned that cost recovery and output in the second half is likely to be below expectations.

Additional maintenance shutdowns and extra spending on plant maintenance and refurbishment will have a short-term impact on the company’s financial performance, Chief Executive Officer Joe Hudson said in a statement on Monday.

In May, Ibstock had said it saw a slower-than-expected start to the year for its brick and concrete businesses in the UK, primarily due to a longer winter and higher energy costs.

It also then forecast results for the year to be weighted towards the second half, owing largely to new volumes from its major projects in bricks and roof tiles.

The company said it now plans twelve months of increased maintenance to ensure the factories can operate at levels to meet increasing demand.

Ibstock said it expects adjusted earnings before interest, taxation, depreciation and amortisation (EBITDA) to be £58 million for the half-year ended June 30, lower than 59.7 million pounds reported last year.

The company, which has a market share of about 40 percent in the UK based on volume of bricks sold, expects reported EBITDA to be roughly 66 million pounds, which includes the sale of surplus property.

Shares of the company were down 11.6 percent, putting them at the bottom of the FTSE Midcap Index .FTMC.

Reporting by Muvija M in Bengaluru; Editing by Amrutha Gayathri, Bernard Orr

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