Britain鈥檚 two biggest brickmakers say they are back at full production capacity following the big hit taken when the country ground to a halt early in 2020.
A year-and-a-half ago Ibstock and Forterra were forced to shut their plants and put medium-term plans on hold as the country tried to work out how the economy could withstand mass lockdowns.
Both Ibstock and Forterra had to reassure investors they had enough cash to see them through the enforced downturn as building companies closed their sites. Redundancies were also announced.
Now, as the country starts getting back to some sort of normality both companies have said business has picked up strongly, and looks set to stay that way.
Forterra 鈥 which is building Europe鈥檚 biggest brick factory in Desford, Leicestershire 鈥 has around a third of the 海角视频 brick market and a third of the aerated concrete block market, making it the second biggest brick maker in Britain behind the Ibstock group, based just up the road in north west Leicestershire.
Ibstock chief executive Joe Hudson said management felt confident to be investing in the business again.
He said: 鈥淲e delivered a strong performance for the first half, supported by the 海角视频 construction sector鈥檚 continued recovery from the period of peak pandemic impact.
鈥淯nderlying market fundamentals remained robust, backed by demand for new housing, and we have captured the benefits of last year鈥檚 restructuring and re-focused on growth opportunities.
鈥淭he 拢60 million investment in the redevelopment of our clay brick facilities in the West Midlands will expand our capacity significantly from early 2024, consolidating our leadership position in the clay brick market.
鈥淚t will also demonstrate our commitment to leading our industry on sustainability issues, producing the 海角视频鈥檚 first net-zero carbon bricks, an innovation that is already generating significant customer interest.鈥
Stephen Harrison is chief executive of Forterra which is going ahead with a 拢27 million investment into its 30 year old Staffordshire brick factory, near Tamworth, which will boost productivity there by 20 per cent.
He said: "We saw a strong recovery over 2020 in the first half, which exceeded our expectations.
鈥淭his performance, primarily in bricks and blocks, was underpinned by robust demand across both the new build and RM&I [repair, maintenance and improvements] markets.
鈥淥verall, group revenue increased 47 per cent over 2020 and, notably, revenue in bricks and blocks was slightly ahead of 2019 levels.
"The current strong trading conditions appear set to continue in the second half of the year with our customer base signalling that they expect current levels of demand to continue.
鈥淗owever, we remain watchful that ongoing economic uncertainty surrounding the longer-term impacts of the pandemic, coupled with the shorter-term effects of the present shortages of labour, materials and transport across the wider sector could potentially impact demand for our products.
"Whilst we anticipate that the result for the full year will be weighted towards the first half reflecting the timing of maintenance shutdowns, the impact of cost inflation and near-term labour and material shortages in the second half, we now anticipate a 2021 full-year result modestly ahead of our previous expectations."
Here are the Ibstock figures:
Sales for the last six months were back to pre-Covid levels at 拢202 million as its construction clients tried to get on top of pent-up demand for new builds.
The business made a pre-tax profit of 拢39 million in the first half of 2021 鈥 again similar to the first six months of 2019. By contrast, in the first six months of last year it made losses of 拢52 million.
Ibstock said it had benefited from restructuring and good overall cost management brought in after the pandemic hit and the 海角视频 market now looked sound 鈥 underpinned by strong housing demand and good mortgage availability.
It said trade was also being helped by homeowners feeling confident enough to spend money on their properties and it had handled well the impact of tougher supply chain conditions.
As the summer progresses, it said, demand has remained 鈥渞obust鈥 though supply chain challenges 鈥減rincipally relating to freight availability and the impact of Covid constraints on factory labour鈥 had become more evident.
Here are the Forterra figures:
In the first half of 2021 Forterra reported sales of just over 拢180 million 鈥 down on the 拢193.6 million reported pre-pandemic in the first half of 2019, but almost 50 per cent up on the first six months of 2020.
Pre-tax profits were 拢27.1 million for the half, compared to losses of 拢2.3 million in the first half of 2020, but down more than 拢5 million on the first half of 2019.
The business said it had seen a strong recovery in trading and the latest profits were a sign of success, taking into account 鈥渙perational challenges鈥 and investment in the new Desford factory, which is set to open in late 2022.
Cashflow was also strong, the business said, with the current positive trading outlook expected to continue.
It said: 鈥淭he board remains positive about the fundamentals relating to the 海角视频 housing market driven by structural undersupply and supportive Government policy.鈥
