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Inflation and housing in focus as brickmaker Ibstock reports full year results


The market will be keen to hear commentary on how demand from housebuilders is holding up.

Ibstock PLC (LSE:IBST) will release full year earnings on Wednesday, with the brickmaker’s cost-cutting exercises and status as a supplier expected to protect it from excessive inflationary pressures.

`Housing demand went through a purple patch during the Covid pandemic as the race for space intensified the demand for turn-key homes outside of major cities.

It allowed house prices to rise more than 10% last year, but costs have also begun to spiral, with construction output prices rising 6.2% in the 12 months to December, according to the latest data from the ONS.  

While cost inflation could soon outstrip prices, Hargreaves Lansdown believes Ibstock should be shielded from immediate inflation risks, thanks to targeted £20mln of cost-saving in 2021, and the ability to pass on rising costs to builders.

Hargreaves Lansdown expects full-year revenues to have grown 29% to £409mln against 2020, with underlying cash profits of £93mln slightly ahead of previous guidance.

“Supplying the bricks used for building houses, rather than selling the houses themselves, provides some shelter from a drop in housing demand,” said Matt Britzman, equity analyst at Hargreaves Lansdown. 

“Nevertheless, we’ll be keen to hear any commentary on how demand from housebuilders is holding up.”

Elsewhere, investors can expect an update on new business segment Ibstock Futures, which is using £50mln to build the UK’s first brick slip factory.

Wednesday March 9

Finals: 888 Holdings PLC (LSE:888) (888 Holdings PLC (LSE:888)), Alfa Financial Software Holdings Ltd, Breedon Group Plc (AIM:BREE) (Breedon Group Plc (AIM:BREE)), Foresight Solar Fund Ltd (LSE:FSFL) (Foresight Solar Fund Ltd (LSE:FSFL)), Headlam Group (LSE:HEAD) (Headlam Group (LSE:HEAD)) PLC, Ibstock PLC (LSE:IBST) (Ibstock PLC (LSE:IBST)), Legal & General Group PLC (LSE:LGEN) (Legal & General Group PLC (LSE:LGEN)), Network International Holdings, Prudential PLC (LSE:PRU) (Prudential PLC (LSE:PRU)), Quilter PLC (LSE:QLT) (Quilter PLC (LSE:QLT)), Somero Enterprises Inc, STV PLC, Biffa PLC (LSE:BIFF) (Biffa PLC (LSE:BIFF)), Ibstock PLC (Ibstock PLC (LSE:IBST)), Tullow Oil

Interims: Kier Group PLC (LSE:KIE) (Kier Group PLC (LSE:KIE)), Thinksmart Ltd

AGMs: MTI Wireless Edge

Economic data: MBA Mortgage Applications (US), Crude Oil Inventories (US), Retail Sales (UK)

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