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Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
---|---|---|---|---|---|
Ibstock Plc | LSE:IBST | London | Ordinary Share | GB00BYXJC278 | ORD 1P |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
-1.40 | -0.92% | 151.60 | 150.40 | 150.80 | 154.80 | 150.00 | 150.20 | 1,041,457 | 16:35:11 |
Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
---|---|---|---|---|---|
Concrete Block And Brick | 405.84M | 21.06M | 0.0537 | 28.08 | 591.23M |
TIDMIBST
RNS Number : 0786T
Ibstock PLC
22 March 2021
22 March 2021
Ibstock plc ("the Company" or "the Group")
Annual Financial Report
Further to the release of the Company's preliminary results announcement on 10 March 2021 (the "Results Announcement"), the Company announces that it has today published its full Annual Report and Accounts for the year ended 31 December 2020.
The Company also announces that it will be posting copies of the documents listed below to shareholders later today:
1. 2020 Annual Report and Accounts 2. Notice of Annual General Meeting ("AGM") 2021
The AGM will be held at 11:00am on Thursday 22 April 2021 at the offices of Ibstock plc, 54 Hatton Garden, London EC1N 8HN.
A copy of each of these documents will be submitted to the UK Listing Authority via the National Storage Mechanism and will shortly be available for inspection at https://data.fca.org.uk/#/nsm/nationalstoragemechanism
The 2020 Annual Report and Accounts and Notice of Annual General Meeting 2021 will also be accessible later today via the Company's website at www.ibstockplc.co.uk/investor-relations
Regretfully, the current issues surrounding COVID-19 and the public health guidance in the UK have meant that we have taken the decision to discourage shareholders from attending the AGM in person, but we will be providing details on our website of a webcast so shareholders are able to observe proceedings. For the avoidance of doubt this approach does not impact shareholders' ability to vote on the resolutions being proposed and information regarding the voting procedure can be found in the Notice of AGM. Any changes to the AGM (including any change to the location) will be communicated to shareholders before the meeting through our website and, where appropriate, by RNS announcement.
The Appendix to this announcement is a supplement to the Results Announcement and should be read together with the Results Announcement. It contains the information required, pursuant to DTR 6.3.5, to be communicated to the media in unedited full text that is in addition to the information communicated in the Results Announcement. This announcement is not a substitute for reading the full Annual Report and Accounts. Page numbers and cross references in the text below refer to page numbers and cross references in the Annual Report and Accounts 2020.
Appendix
Principal risks and uncertainties
DESCRIPTION MITIGATION Climate change The Group may not deliver upon We recognise the importance its of being a sustainable business sustainability commitments and that climate change affects and those targets set out in natural and economic systems, the Sustainability Roadmap. and recognise their implications in all we do. An inability to manage energy demand needs within our sustainability As a business, there are a targets or changes in consumer number of International and demand may reduce our competitive British standards operated advantage. throughout our businesses which include environmental, Failure to respond to climate energy, responsible sourcing change risks may also result and quality. These provide in reductions in investor interest a consistent set of and support. procedures which are regularly reviewed and updated to identify As a business engaged in the ways in which they can be extraction of made more effective. natural resources and the manufacture of The Group aims to provide concrete products, there is visibility and assurance to a risk that the our stakeholders through our Group's operations are targeted disclosure in relation to by sustainability (see pages environmental activists. This 36 to 45), which is supported could result in disruption by continued investment to at one or more of the Group's improve the sustainability manufacturing facilities inhibiting of our operations and internal the ability to manufacture sustainability KPIs to track or despatch product or receive measures. A new KPI centred supplies. on carbon reduction has been introduced for the FY 2020 The impact of climate change and is an additional measure and for our LTIP. Government's response to this could also lead to changes The Group has a proven record to laws and regulations that of investment in the latest could systems, plant, machinery require that the Group make and technology and we continue significant to address the need for enabling capital investments or otherwise conditions to address climate increase its change concerns through the costs or could result in material development of our Sustainability liabilities. Roadmap 2025. The global increase in focus The Group Technical team and on corporate Group Engineering function social responsibility following are investing in longer-term the pandemic strategic supplier partnerships has greatly raised the profile in order to deliver longer-term of the Group's sustainable products to our approach and success with its customers. sustainability programme. The approach taken We operate proactive management by the of the sustainability descriptions Group when dealing with all associated with the Group's its stakeholders products. Physical security will be placed under increased measures are in place at the scrutiny in the Group's production facilities, wake of the current crisis together with real-time monitoring and beyond. of social media to identify threats of environmental activism. The introduction of a new ESG Committee will provide clear and strategic oversight of the Group's sustainability strategy. It will provide the basis to ensure that all existing and emerging issues are covered appropriately so that the Group will be able to continue to meet both its legal obligations and further develop its Sustainability Roadmap. The Group will continually keep under review the level of resourcing and structure in place to manage sustainability within the business. ----------------------------------------- Operational disruption The Group has the ability to transfer some of its production A material disruption, including across its network of plants those caused and is able to engage subcontractors by extreme weather, power to reduce the impact of certain outages or a production disruptions. Groupwide global pandemic, at one of business continuity plans the Group's are being refreshed and improved manufacturing facilities or to take account of those learnings quarries, or at coming from the COVID-19 pandemic. one of the Group's suppliers' facilities, In relation to supplier disruption could prevent the Group from or failure, further third meeting party suppliers have been customer demand. identified who can maintain service in The Group depends on efficient the event of a disruption. and In relation to IT, a major
uninterrupted operations of incident action plan has been its information developed and the Group maintains and communication technology, data backups and a comprehensive and any disaster recovery plan covering disruption to these operations Group and individual factory could have a locations. material adverse effect on the Group's The Group maintains a capital operations and financial performance. expenditure development plan, Failure to deliver capital which is focused on integrating enhancements on a the latest technology and timely basis could similarly replacing end-of-life assets extend planned to ensure closures and adversely impact continued operational capability. the Group's The ongoing production capabilities. maintenance programme ensures a disciplined approach to Additionally, the Group is plant outages, whilst ensuring exposed to the greater investment in impact of unexpected or prolonged maintenance on an ongoing periods of basis. This is supported by bad weather, which could adversely qualified project management affect resource to ensure disruption construction activity and, is minimised. as a result, demand for the Group's products Management does not underestimate the potential impact that future prolonged periods of bad weather could have. Weather conditions are beyond the Group's control, although historically adverse weather has not impacted trading in the context of any full year. The Group maintains appropriate business interruption insurance, whilst its wide geographical spread mitigates this risk to some extent and allows it to manage its production facilities to mitigate the impact of such disruption . ----------------------------------------- Economic conditions Wider macroeconomic conditions The Group's business could are largely beyond the control be materially of the Group. However, the impacted by changes in the Group seeks to analyse construction macroeconomic data using independent forecasts environment in the UK. Specifically, of construction statistics demand and forecasts of future demand for the Group's products is based on stated customer requirements strongly correlated with with residential construction the aim of anticipating market and renovation movements. activities and non-residential construction, The Group has historically together with the supply chain's flexed capacity and its cost attitude to base where possible during stock levels, which are cyclical. economic downturns to allow more of the Group's manufacturing Continued uncertainty around plants to remain open and the progress of viable, maintaining skills, the COVID-19 pandemic and development and training. the introduction Actions taken during the year of further lockdowns and restrictions in order to reduce the ongoing could fixed cost footprint of the further damage the economy Group through an organisational with the review and restructuring will resulting impacts on the Group's provide flexibility for the business. business so that it can meet future demand levels in a In addition, should negative cost-effective way. impacts on economic conditions arise Ibstock ensures that its fulfilment as a result of the and customer service capabilities change in the relationship to support and serve customers with the EU, this are maintained and actively could include a reduction engage with industry bodies in housing demand, to ensure the promotion of or reduced mortgage availability housebuilding and construction, or whilst seeking to promote affordability. Such consequences the differentiating qualities would likely of our business in the core reduce demand for the Group's markets in which we compete. products The Group's RMI and specification product ranges diversify end-use exposure and provide greater resilience in light of changing market demand in any of its end-use markets ----------------------------------------- Anticipating the market and new product development There is a risk that the business Consideration of relevant is not able to market data and trends in identify opportunities in the divisions highlights emerging the housing market risks as soon as they are or construction sector and identified, providing the miss chances to leadership teams with the maximise or exploit opportunities information required to make ahead of considered and fact based our competitors. As result, decisions. our product offering and the customer The Group has a culture of journey may not innovation through its organisational meet changing customer requirements. structure, including suitably qualified and experienced If the business is not able people such as product managers to respond to changes or opportunities in each of the operating divisions. in the market this could result in a direct financial cost The Group's Growth Engine whereby revenue numbers stagnate to secure sales opportunities or decline. In addition, there enables more effective new is the risk that the business and sustainable product development. may not be perceived as market leader and this will directly impact their reputation and ability to expand market share. Failure to be at the forefront of innovation as the Group's markets evolve may lead to a loss in market position or customers resulting in declining revenue or margins. A lack of new product development and failure to optimise our supply chain to support our customers may also be detrimental to the long-term achievement of the Group's strategy ----------------------------------------- Financial risk management In addition to the input cost Foreign exchange risk: The risks outlined, the Group undertakes limited foreign Group is subject to the following exchange transactions selling other domestically with largely financial risks: local input costs. Some capital expenditure requires foreign Foreign exchange risk: As the exchange purchases and management Group transacts in currencies considers foreign exchange other than Sterling, exchange hedging strategies where significant rate fluctuations may adversely exposures arise.
impact the Group's results. Credit risk: Customer credit Credit risk: Through its customers, risk is managed by each subsidiary the Group is exposed to a counterparty subject to the Group's policy risk that accounts receivable relating to customer credit will not be settled leading risk management. The Group to a financial loss to the principally manages credit Group. risk through management of customer credit limits. The Liquidity risk: Insufficient credit limits are set for funds could result in each customer based on the the Group being unable to creditworthiness of the customer fund its operations. and the anticipated levels of business activity. Interest rate risk: Movements These limits are initially in interest rates determined when the customer could adversely impact the account is first set up and Group and result in higher are regularly monitored thereafter. financing payments to service debt. Liquidity risk: The Group's policy is to ensure that it The impacts of COVID-19 and has sufficient funding and the adoption facilities in place to meet of home working, changes to any foreseeable peak in borrowing volumes and requirements and liabilities patterns of transactional when they become due. At activity all served to 31 December 2020, the Group increase the financial control has net debt1 of GBP69 million risks, through a - well within the banking heightened potential for fraud facilities and compromising the integrity of GBP215 million, as set of data within the organisation out in Note 19 of the Group financial statements. During the year it negotiated a number of amendments to a number of covenants under the RCF and secured access to the COVID Corporate Financing Facility. Interest rate risk: The Group finances its operations through a mixture of retained profits and bank borrowings. The Group's bank borrowings, other facilities and deposits are in Sterling and at floating rates. No interest rate derivative contracts have been entered into during the year or at the year end. See mitigations under Cyber risk relative to the increased of financial control. ----------------------------------------- Government regulation and standards relating to the manufacture and use of building products The Group monitors the law The Group's production, manufacturing across its markets to ensure and the effects of changes are distribution activities are minimised and the Group complies subject to health with all applicable laws. and safety risks. The Group The Group aligns Company-wide is subject to policies and procedures accordingly environmental, health and with training on mandatory safety laws and topics and compliance requirements regulations and these may undertaken. change. These laws and regulations The health and wellbeing of could cause the our employees is fundamental Group to make modifications to our business. We have stringent to how it health and safety policies manufactures and prices its and monitor compliance regularly products. through internal and external auditing activity. This has Greater regulation following been particularly important the Grenfell tragedy has increased in light of COVID-19. the risk that the Group's failure to comply with the relevant We reorganised the management regulations would result in of the health and safety function the Group being liable to fines to provide more coordinated, or a suspension of operations, central oversight to ensure which would impact the Group's alignment and consistency financial results, together throughout the business. with any associated negative reputational damage. We have also invested considerable resources in employee training Additional regulation and responsibilities across our manufacturing processes. as We have invested heavily in a result of continuing COVID-19 safe systems and facilities restrictions to protect our employees. including health and safety These activities have continued and wellbeing of virtually, where possible, our workforce may also impact. as a result of COVID-19. ----------------------------------------- Customer relationships and reputation The Group has a service-led The Group receives a significant ethos with many top customer portion of its relationships lasting over revenue from key customers 40 years. The Group differentiates and the loss of itself through the continued any such customer through quality of its products and our failure to service levels with Net Promoter evolve effectively and meet Score (NPS) the changing surveys completed to build needs of our customers could customer relationships through result in a proactive response to customer significant loss of revenue requirements. and cash flow. Constriction in activity levels The Group's sales and production within the teams are highly integrated construction industry introduces to ensure that production a risk that aligns with customers' needs. price levels cannot be maintained, Sales teams receive in-depth resulting in technical training and are dilution of margins or level assisted by a design support of market share service team as well as targeted and adversely impacting the marketing materials to assist Group's with specification and selection. financial results. The Group's divisions each Further, the Group does not have their own sales teams have long-term contracts with aligned by customer group its customers and the Group's and region in order to focus revenue could be reduced if on key decision-makers and its customers switch some or customers. Key account all of their business with management is supervised the Group to other suppliers at a senior level where long-term or if we are unable to leverage relationships benefit from our customer the Group's commitment to relationships effectively quality, service and consistency. During the 2020 year, we amended our organisational structure to move marketing teams into
the divisional commercial teams, enabling us to understand and respond more effectively to the evolving needs of our customers. Access to 145 million tonnes of clay reserves, Ibstock Clay's primary raw material, ensures an ability to satisfy customer demand. ----------------------------------------- Recruitment and retention of key personnel Focused action plans are in The Group is dependent on qualified place as a result of the 'Great personnel in key positions place to work' employee engagement and employees survey aimed at further building having special technical knowledge on employee satisfaction. and skills. Any loss of such personnel Improved methods of communication without timely such as My Ibstock and a focus replacement could disrupt on employee well being will business help operations, damage customer in developing our culture relationships or and following an extremely result in the loss of corporate difficult year. knowledge. Investment in our people through There is a risk that the Group training and faces difficulties in attracting development programmes is and retaining staff in production in place to upskill our existing roles, which are labour-intensive workforce whilst we recognise and potentially less attractive the changing labour markets, to the younger population. and packages for key and senior staff remain competitive. Recent experience of COVID-19 We are proposing a new Senior and the impact of restructuring Managers Share Plan (SMSP) and redundancies could negatively for 2021. affect morale The Group believes that it is essential to support and develop the management team, where appropriate, ensuring that the team is structured in a way which best takes advantage of the available skills and robustly identifies the team and structure for the future. Succession plans are in place, which is key to ensuring a managed transfer of roles and responsibilities. Apprenticeship schemes are in operation with a yearly intake across the business (engineering and technical based). High potential individuals are identified with development plans formulated. External recruits are brought in where any skill gaps are identified and to enhance the talent pool. ----------------------------------------- Input prices The Group's business may be Significant input costs are affected by under constant review, with volatility in extraction expenses continuous monitoring of raw and raw material costs, energy prices material costs. Risks exist and haulage expenses, with around our ability the aim of achieving the best to pass on increased costs possible prices and assuring through price stability of supply. increases to our customers. With regard to possible energy The Group's business may also shortages, the Group operates be affected by forward purchasing to mitigate volatility in energy costs the impact of sudden price or disruptions in increases and monitors the energy supplies. Significant carbon market changes in the on an ongoing basis and has cost or availability of transportation modelled the impact of such could rises to assess the financial affect the Group's results implications (see Viability Statement on page 64). As competitors of the Group are likely to experience similar levels of input price increases, we aim to have appropriate pricing policies to remain competitive within our markets and pass on significant increases in input costs. ----------------------------------------- Product quality The nature of the Group's business Focus on detailed product may information has intensified, expose it to warranty claims with the Group's customers and to claims for demanding greater information product liability, construction regarding the product specifics. defects, project delay, property damage, personal The Group operates comprehensive injury and quality control procedures other damages. across its sites with both internal and external audit Ensuring accuracy of the Group's reviews of product quality product data completed to ensure conformance is important to the Group's with internationally recognised continued success standards. with any inaccurate data potentially placing All accredited staff undergo the end user at risk. rigorous training programmes on quality and Any damage to the Group's brands, the Group's Technical teams including carry out regular testing through actual or alleged of all of our products to issues with its provide products, could harm our business, full technical data on our reputation product range. and the Group's financial results. The Group maintains appropriate insurance cover against product liability related claims. ----------------------------------------- Cyber security High-profile attacks on companies The Group is committed to across a ensure that its network, applications number of industry sectors and data are protected. (including one of our own major customers) have The Group has completed a highlighted review using an external cyber the damage that can now be security programme framework, caused by which provides coverage across hackers and cyber terrorists. the key areas of cyber security Unauthorised access to the and aligns with industry standards. Group's IT This has culminated in the systems, malware attacks or Group's achievement of the hacking incidents represent UK Government's Cyber Essentials
the greatest cyber security accreditation, which is subject risks to the Group. to independent audit annually. Such IT security risks have Despite the pace of the change the ability to significantly introduced when lockdown commenced disrupt the Group's business, in March, all equipment deployed resulting in financial loss. was built to be image compliant Potential penalties could arise with Ibstock policies and from the loss of data as a standards. In addition, the result of breaches to the Group's fast track introduction of IT security or new industry leading VPN services reputational damage as a result to handle the extended homeworking of negative user community, the use of publicity associated with new applications such as Microsoft control lapses in Teams/OneDrive to enable virtual this area. meetings and collaboration and the disablement of existing Changes in employees' working vulnerable applications and patterns processes ensure the business and use of technology as a could and is expected to continue direct result of to operate effectively in COVID-19, along with the resulting the 'new normal'. risks to information security have materially increased cyber risks. The continuing prevalence of many colleagues continuing to work from home in some capacity for the foreseeable future will compound the near term challenges. -----------------------------------------
Directors' Responsibility Statement
The Directors, whose names and functions are given on pages 68 and 69 of the 2020 Annual Report and Accounts confirm that to the best of their knowledge:
- the financial statements, prepared in accordance with the relevant financial reporting framework, give a true and fair view of the assets, liabilities, financial position and profit or loss of the Group and Company and the undertakings included in the consolidation
taken as a whole;
- the Strategic Report and Directors' Report include a fair review of the development and performance of the business and the position of the Group and Company and the undertakings included in the consolidation taken as a whole, together with a description of the principal risks and uncertainties that they face.
The Directors consider that the Annual Report and Accounts taken as a whole, are fair, balanced and understandable and provide the information necessary for shareholders to assess the Group's position and performance, business and strategy.
Enquiries to:
Ibstock plc Nick Giles, Group Company Secretary 01530 257438
About Ibstock Plc
Ibstock plc is a leading UK manufacturer of clay bricks and a diversified range of clay and concrete products. Its principal products are clay bricks, brick components, concrete roof tiles, concrete substitutes for stone
masonry, concrete fencing and pre -- stressed concrete products.
The Group's two divisions are:
Ibstock Clay: The leading manufacturer by volume of clay bricks sold in the United Kingdom. With 16 manufacturing sites Ibstock Brick has the largest brick production capacity in the United Kingdom. It operates a network of 18 active quarries located close to its manufacturing plants. Ibstock Kevington provides masonry and pre-fabricated component building solutions, operating from 6 sites across the United Kingdom.
Ibstock Concrete: A leading manufacturer of concrete roofing, walling, flooring and fencing products, along with lintels and general concrete building products, with 14 manufacturing plants in the United Kingdom.
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