The UK’s largest brickmaker, Ibstock, has issued its second profit warning this year after sales plunged 22% below expectations in the three months to September, prompting a 20% cut in production. The company said full-year profits would be 'materially below' forecasts and criticised the government for delaying its 'Your First Home' support scheme until April 2027, which it said had put additional pressure on near-term demand.
Joe Hudson, Ibstock’s chief executive, said 'trading conditions deteriorated sharply during the third quarter, with weakness continuing into October.' The company expects profits in the mid-£40m range, well down from analysts’ previous consensus of £59m.
The warning comes days after the Office for Budget Responsibility cut its forecast for new home builds by 2031 by 190,000. Housing secretary Angela Rayner has said there is only a 'slim chance' the government will meet its target of 1.5m homes this parliament, with estimates suggesting the target could be missed by a third. Shares in Ibstock fell more than 8%.
While Ibstock described the Your First Home scheme as a potentially meaningful intervention, it said the delay until 2027 was 'disappointing'. Analysts at Peel Hunt said lower interest rates remain key to a pickup in housing sector activity.
Analysis
Why This Matters
- Ibstock’s financial warning reflects deepening troubles in the UK housing market, which could slow economic growth and reduce construction jobs.
- The government’s homebuilding target appears increasingly unrealistic, raising questions about its housing policy.
- Delays to the Your First Home scheme may dampen first-time buyer activity in the near term.
Background
Ibstock is a major supplier of bricks to the UK construction industry, and its sales are closely tied to housing starts. The company had issued an earlier profit warning in 2026, and the sector has been under pressure from rising interest rates and weak demand. The government has pledged to build 1.5m homes by the end of the parliament, but the OBR has reduced its forecasts.
Key Perspectives
Ibstock: said the delay of the Your First Home support scheme has added pressure to near-term demand.
Angela Rayner: acknowledged that the government may miss its 1.5m homes target, calling the chance slim.
Peel Hunt analysts: argued that lower interest rates are essential for reviving the housing sector.
What to Watch
- The timeline for the Your First Home scheme and whether it will be reconsidered.
- Bank of England policy on interest rates in upcoming meetings.
- Ibstock’s third-quarter results and any further guidance on profits.
Checked
12 claims in this story checked against 1 source: 12 supported.
Show each claim
- SupportedIbstock is the UK’s largest brickmaker.UK news | The Guardian: “Sales at the UK’s largest brickmaker plunged by more than a fifth over the summer”
- SupportedIbstock’s sales were 22% below its expectations in the three months to the end of September.UK news | The Guardian: “Ibstock said on Monday that sales slumped by 22% below its expectations in the three months to the end of September”
- SupportedIbstock issued its second profit warning this year.UK news | The Guardian: “Ibstock issued its second profit warning this year”
- SupportedIbstock cut production by 20%.UK news | The Guardian: “prompting it to slash production levels by a fifth.”
- SupportedIbstock said its full-year profits would be materially below previous expectations.UK news | The Guardian: “The warning by the company, which now expects full-year profits to be “materially below” previous expectations”
- SupportedIbstock criticised the scheme’s delay until April 2027 and said it had put additional pressure on near-term demand.UK news | The Guardian: “the delay to its introduction until April 2027 is disappointing and has put additional pressure on near-term demand.”
- SupportedJoe Hudson said, “trading conditions deteriorated sharply during the third quarter, with weakness continuing into October.”UK news | The Guardian: ““Trading conditions deteriorated sharply during the third quarter, with weakness continuing into October,” said Joe Hudson, the chief executive of Ibstock.”
- SupportedIbstock expected full-year profits in the mid-£40m range.UK news | The Guardian: “Ibstock said it now expected full-year profits to be in the mid-£40m range”
- SupportedAnalysts’ previous consensus for Ibstock’s full-year profits was £59m.UK news | The Guardian: “well down on analysts’ previous consensus of £59m.”
- SupportedThe Office for Budget Responsibility cut its forecast for the number of new homes to be built by 2031 by 190,000, days before Ibstock’s warning.UK news | The Guardian: “comes days after the Office for Budget Responsibility cut its forecast for the number of new homes that will be built by 2031 by 190,000.”
- SupportedAngela Rayner said there was only a “slim chance” the government would meet its target of building 1.5 million new homes this parliament.UK news | The Guardian: “Angela Rayner, the housing secretary, has said there is only a “slim chance” the government will meet its goal of building 1.5m new homes this parliament”
- SupportedIbstock shares fell more than 8%.UK news | The Guardian: “Shares in Ibstock fell more than 8%”