Brickmakers Ibstock are shutting down their Ravenhead factory to reduce costs as their pre-tax profit falls by £21m
Ibstock is closing their Ravenhead factory as a cost-cutting measure after demand for bricks has dropped.
As market uncertainty slows housebuilding, Ibstock’s interim results for the last six months to June 30 2023 took a hit, with turnover down to £223m from £259m (-14%) and pre-tax profits falling to £30m from £51m(-42%).
Producing 40m units a year, the Ravenhead wire-cut brick factory has been identified by Ibstock as higher-cost compared to their 36 other sites.
Closing the site will cost £1.5m in redundancy payments
Chief executive Joe Hudson added: “We have seen a significant change in the UK macroeconomic outlook, with near-term expectations for both inflation and interest rates above the levels previously envisaged. Inevitably, this has created a more uncertain trading environment for customers in both our residential new build and RMI markets.
“As we have done previously during periods of challenging trading, we have taken decisive action to reduce costs across the business; this includes the difficult decision to propose the closure of our Ravenhead brick factory. We remain vigilant on costs and, as we have demonstrated in the recent past, will continue to take any further action necessary to ensure capacity is aligned with market demand, to protect the performance of the business.”
Overall, Ibstock has estimated the cost of closing the Ravenhead site at £11m, with around £1.5m in redundancy payments.
Ibstock is continuing with a new plant in West Yorkshire
Ibstock’s interim results did report a 15% increase in revenue from its infrastructure business.
Plans are also continuing with a new plant in Nostell, West Yorkshire, for an automated brick slip systems factory capable of producing up to 30m brick slips a year.
Due to complete around the end of next year, the Nostell factory is part of the Ibstock Futures division, the new business aimed at growing revenue in the façade products and offsite and modular markets. The business has already opened an innovation hub in the West Midlands and posted revenue of £6m in the first half.
