Ibstock Brick floats on Stock Exchange
Brick manufacturer, Ibstock Brick has today announced plans to float on the London Stock Exchange.
The company has a 40% UK market share in clay bricks and says it is experiencing structural demand growth in its key UK brick market, driven by strong household formations, a significant shortage of homes and supportive government policies.
The group said it was well placed to take advantage of the attractive market conditions.
“Against this demand backdrop, the UK brick market is experiencing structural imbalances, with insufficient manufacturing capacity to fulfil UK demand. There are high barriers to new brick capacity, including access to clay reserves and manufacturing sites with appropriate planning permissions and the technical ‘know how’ to procure and commission the plant and equipment required to manufacture bricks,” the company explained.
Ibstock has announced a “significant” capacity expansion in the last twelve months, with a new manufacturing plant in Leicestershire that will add capacity of approximately 100m bricks per annum.
The new plant is expected to be commissioned in the second half of 2017 and the company aims to produce approximately 30m, 75m and 95m bricks in 2017, 2018 and 2019, respectively.
Wayne Sheppard, CEO of Ibstock, said: “Our markets are benefiting from a powerful alignment of growth factors. In the UK, a long-term undersupply of new homes compounded by strong population growth and rates of household formation has created substantial unfulfilled demand for new housing. This demand is now being supported by wide-ranging Government initiatives to help increase new home supply. With UK brick demand now exceeding current manufacturing capacity, a significant opportunity has been created for a UK manufacturer to expand capacity. In the US, volumes are expected to grow as the economy and construction markets continue to recover.
“With the UK Government’s Help to Buy initiative extended to 2020, these robust demand fundamentals present an attractive opportunity, making this an exciting time for Ibstock to return to the public markets.”