UK's Ibstock lowers annual profit view for the second time, shares slump

Ibstock Cuts Profit Outlook Again as UK Construction Demand Falls

Impact of Construction Market Weakness on Ibstock

Share Price Reaction and Profit Warning

Nov 2 (Reuters) - Ibstock shares tumbled 15% to a record low on Monday after the British bricks and concrete maker cut its annual profit expectations for the second time this year, citing persistent weakness in the construction market.

Factors Affecting UK Construction Materials Suppliers

Slump in Residential and Commercial Construction

• UK Construction materials suppliers have been pressured by a slump in residential and commercial construction, amid affordability constraints and rising mortgage rates and costs

Government Subsidy and Market Expectations

• The UK's recently introduced first-time buyer subsidy temporarily boosted shares for construction material stocks, on expectations of a revival in demand

Delayed Rollout of Subsidy Scheme

• Ibstock said that the delayed roll out of the scheme was disappointing and has put additional pressure on near-term demand

Financial Outlook and Production Adjustments

Revised Profit Expectations

• The company expects annual adjusted core profit in the mid-£40 million range, compared to the lower end of £59 million to £68 million range forecast earlier

Market Conditions and Recovery Hopes

• Ibstock said weak market conditions continued through September and October, and squashed expectations for a second-half recovery

Production Cuts in Response to Falling Sales

• Its third quarter production was cut by about 20% against Ibstock's plans set in the half-year, to save costs and better reflect the falling brick sales

Reporting and Editorial Credits

(Reporting by Simone Lobo in Bengaluru; Editing by Jochelle Mendonca)