Ibstock Share Discussion Threads

[tole] 22/4/2022 07:21

https://www.thetimes.co.uk/article/challenges-rain-down-on-big-miners-tzxd9jm9cIbstockWhen this column looked at Ibstock last August, inflation was a tiny cloud on the horizon, energy was plentiful, post-pandemic supply bottlenecks had hardly begun and Ukraine a far-off land familiar mainly to trekkers.For Britain's biggest brickmaker, the news since then could not have been much worse. The shares have fallen from 223p to as low as 167p. After rising following the publication of 2021's results on March 9, the price wilted again before a bullish statement yesterday, with the sweetener of a £30 million buyback, generated a 14½p, 8.8 per cent, rise to 181p.Joe Hudson, Ibstock's chief executive, told yesterday's annual meeting that the company had "made a strong start to 2022 . . . Mindful of the broader macroeconomic uncertainties, we expect to deliver performance for the full year modestly ahead of our previous expectations."SIGN UP FOR OUR ...Weekly newsletterNews, inspiration and advice for business leaders from British entrepreneursthetimes.co.uk/newslettersEnergy is a big factor in making bricks, so Ibstock has bought forward at fixed prices 75 per cent of what it will need for this year's second half and more than 30 per cent of the likely 2023 requirement.It has done well out of surprisingly strong demand for new houses and stands to benefit from the removal of unsafe cladding from blocks of flats. Ibstock Futures has bought glass-reinforced concrete panel technology, particularly suited to recladding. Its repairs, maintenance and improvement business has been generally strong.Last year, it said it would do better than forecasts of £93 million for adjusted earnings before tax, interest and other costs. The actual number was £103 million, encouraging for Hudson's numbers for 2022. Ibstock looks capable of earnings per share this year of 15p or more, which would mean a price-earnings ratio of below 12. It may want to hold on to cash in light of uncertainty, but even an unchanged 7.5p dividend would leave a useful 4.25 per cent yield.ADVICE BuyWHY Well placed to overcome multiple headwinds

[scruff1] 21/4/2022 09:04

edmund If Austrian companies get contracts by the Ukranians over UK companies then it would be a betrayal. Cant see it though. Im surprised that its taken this trading update to lift the share price I thought much of the energy situation was already known and that the share price drop was a bit strange and overdone. I also would have thought that the talk of a big increase in social housing would have given it a fillip - but it didnt. Ive found it all a tad weird

[gswredland] 21/4/2022 08:46

Hopefully that correction will be coming now Edmund

[daneswooddynamo] 21/4/2022 08:38

A good example here of the U.K. corporate sector being on sale again. Expecting a ramp up in corporate activity over the next 6 months

[edmundshaw] 21/4/2022 08:34

Austria's finance minister in early April ruled out any EU sanctions that target oil and gas coming from Russia. Wieneberger, HQed in Austria, is one of the main three brick suppliers in the UK (with Ibstock and Forterra). I for one won't be buying any building or other supplies from an Austrian or German company, as my personal sanctions against countries that are funding Putin's barbarous invasion and destruction of Ukraine. The idea that Wieneberger might even benefit from the reconstruction of Ukraine is pretty unpalatable... I hope other decisionmakers in the UK might prefer to avoid Wieneberger and support our Uk-owned production where possible.

[edmundshaw] 21/4/2022 08:26

Super trading update today. Most energy requirements for this year sorted three months in, a third of next year's too (hopefully partly hedged so they can take advantage of any price drops). £30m buybacks due to leverage below the planned level. Share price lately has been bizzarly low, an upward correction is well due IMO.

[scruff1] 13/4/2022 08:48

Looks like the divi is not attractive to many.

[scruff1] 13/4/2022 08:48

Looks like the divi is not attractive to many.

[edmundshaw] 18/3/2022 21:50

Forterra is constructing a huge solar array which will provide most (70% was it?) of their energy requirements in a few years. Seems a lot, so I suppose they might be feeding back to the grid on very sunny days, not heard the detail. But Ibstock might do something parallel to avoid the carbon issue.

[scruff1] 18/3/2022 19:49

wad Fair post. I would imagine that like BP Ibstock will have an eye on the green issue. Having said that apart from energy and clay there aint much else needed. Wood maybe but as a builder I can tell you its not currently at least a cheap alternative - certainly not as a facing. The cement for concrete and the bedding of the bricks I would imagine will cause the most hassle. Bricks are aesthetically pleasing and even timber frames are usually skinned with brick. Depending on where you are a lot of false stone look blocks are used but thats concrete/cement which is where I expect any issues to arise. Will be interesting at any rate

[wad collector] 18/3/2022 14:04

Unless someone else can make bricks more cheaply in energy terms , Ibstock should be relatively insulated from energy costs, providing the demand persists. The UK is the largest importer of bricks in the world , according to OEC , but I don't think we need to worry too much about that , as 1 . They are mostly from Europe - which is generally hit harder by energy prices than us, and 2. It was a total of $30M in 2019. Or in import terms , our 822nd most valuable import. Looking longer term it could be argued that the energy intensive brick should be replaced by more sustainable materials like wood, and obviously there is a drive in that direction , but ask the Three Little Pigs about that one! I keep forgetting that about 25% of the revenue here is from concrete not bricks , though the precast imports are similarly small and the energy and sustainability problems similar. I doubt there will be a chance to buy at 160 again for a while.

[stuart little] 16/3/2022 19:52

Ibstock announced a price increase of £38/1000 hitting the industry April, titled as an energy surcharge.

[gswredland] 09/3/2022 10:18

Good looking results. Dividend up and very confident. Back in this morning

[edmundshaw] 09/3/2022 07:48

Very nice looking results. The share price is obviously completely out of step. Dynamic pricing against energy risk, 85% of energy requirements covered for the whole year, which should work out very nicely in the current environment. Price target for me is 300p.

[edmundshaw] 08/3/2022 15:58

How high and how soon are the factors. It does depend on your timescale. Give it 2-3 years and the new production will show through and be paid for. Meantime the price is low and the perfectly adequate dividend should be safe. The housing shortage is not going away, and unless Ibstock management fail to keep up with the very limited competition (unlikely) or invests in new materials that don't function properly or are unpopular (small risks I think), this investment will do for me. I also hold the main competitor Forterra; hopefully they can't both make a pig's ear of the opportunities in front of them!!

[indigocarmine] 08/3/2022 13:49

It always amazes me how touchy some people get over the expression of any slight concern on their baby investments. Of course, you are correct to a certain extent about Ibstock's energy hedging (or more accurately the art of wasting resources to protect yourself against the danger of having to waste even more resources), but the very fact you have to hedge in the first place is never a prime position to be in. One thing I will give you though is that you are entirely correct in your assertion that I should not be investing here: it was a clear mistake on my part, but I have never been a great fan of crystallizing losses, and especially not when I do think that Ibstock will eventually come good and give me some small measure of return. I suspect where we significantly differ is just over how high that eventual return will be.

[edmundshaw] 08/3/2022 11:54

If you don't understand Ibstock's energy hedging or the barriers to entry for any competition, maybe you should not be investing here. But it's pretty basic and public with recent updates. Perhaps you could do more research before opining on the investment case?

[indigocarmine] 08/3/2022 11:00

Possibly, though the worry is always going to be how high are energy costs going to go, and how easy will it be to pass those costs on to clients. For me, I think there is currently a glut of companies/sectors that are clearly undervalued and have a better investment case than here.

[edmundshaw] 08/3/2022 09:14

Ibstock missing out on the general recovery since the drop early doors on Monday. Now relatively very cheap IMO.

[wad collector] 02/3/2022 10:40

The energy rises are sector wide, this share price drop seems overdone.

[tole] 17/2/2022 18:38

https://www.fool.co.uk/2022/02/17/9-5-dividend-yields-2-uk-shares-id-buy-right-now/A business with a solid dividend future?In a pre-pandemic world, Ibstock (LSE:IBST) offered a pretty hefty dividend yield. However, with construction projects having ground to a halt in 2020, it's not surprising the brickmaker had to temporarily cancel its dividends. Consequently, shares of this UK business crashed by 50% in March 2020 and still hasn't fully recovered.But despite it currently trading below 2021 levels, the business seems to be in a far stronger position. Looking at the latest trading update, revenue for 2021 is expected to have made a full recovery to £409m – the same as in 2019. And according to management, EBITDA is also anticipated to be ahead of expectations.Dividends have since been reinstated, albeit at a reduced yield of 2%. However, with manufacturing capacity set to expand later this year, revenues, profits and, in turn, dividends could be on the verge of hitting new highs. That, to me, sounds like a buying opportunity.There are obviously risks to consider. Being a purveyor of construction materials, demand for its products are ultimately tied with the demand for new homes. If housing affordability were to suffer, the number of newbuilds could drop, undercutting future dividend income.Yet, despite this risk, I believe this stock could be set to make an impressive comeback. That's why I'm considering it for my portfolio.

[cerrito] 04/2/2022 21:57

Interested to see that Vulcan Value have further increased their shareholding and can understand why as the gungho TU iof Jan 20 has not done much to the share price They have a stable shareholder base. As far as I can see the only moves since 31.12.20 has been Ameriprise joining with 5.47% and Vulcan going from 6.94% to 9.72%. I appreciate energy prices must be casting a shadow. In last year’s Significant risks in the 2020 A report input prices was way down the list and Climate change was the key issue. In this A report we were told that quote he Group operates a policy of forward purchasing its energy requirements, which is successful in locking-in the costs of production to inform price negotiations with its customers.unquote

[scruff1] 25/1/2022 08:17

I thought I had read that IBST were developing their own sustainable energy sources though not sure how that would be involved with powering brick kilns. Anyone else hear that?

[edmundshaw] 24/1/2022 21:03

They will just put their prices up. The main worry I have is the government shutting down non-essential energy-intensive companies if there is a serious squeeze on energy resources. But the USA is sending us their (ironically very carbon intensive) LNG at the moment, hopefully that will forestall such a necessity. Also think it likely Putin will not pull the trigger, because it would be a disaster for Russia to do so...

[scruff1] 23/1/2022 21:28

That should be where IBST maybe have an 'edge' of their own. Good forward planning