Ibstock, the UK’s largest brickmaker, said sales were 22% below expectations in the three months to the end of September as the downturn in housebuilding intensified. The Leicestershire-based company responded by reducing production by a fifth to bring output closer to demand.

Ibstock said brick market volumes in the UK fell 17% year on year in July and August, with weak conditions continuing through September and October. Chief executive Joe Hudson said trading conditions had deteriorated sharply during the third quarter and that the company was taking further cost-saving measures while maintaining strict control of cash.

The company issued its second profit warning of the year and now expects full-year profits to be in the mid-£40m range, compared with analysts’ previous consensus estimate of £59m. Ibstock said its savings programme is focused mainly on overheads and discretionary spending.

The warning followed a cut by the Office for Budget Responsibility to its forecast for the number of new homes expected to be built by 2031. Housing secretary Angela Rayner has also said there is only a “slim chance” that the government will meet its target of building 1.5m homes during the current parliament.

Ibstock criticised the delayed introduction of the Your First Home support scheme, which is intended to help first-time buyers in England purchase newly built homes with a 2.5% deposit. The company said the scheme could improve affordability, stimulate demand and support confidence in future housing supply, but argued that its postponement until April 2027 had increased pressure on near-term demand.

Ibstock shares fell by as much as 13% on Monday, making the company the biggest faller on the London stock market. Its market value has halved over the past year to £277m.

Analysts at Peel Hunt said companies with strong domestic exposure, including Ibstock, continued to face difficult industry conditions. They described the new support programme as potentially modestly helpful next year, while saying that lower interest rates remained important to a recovery in construction activity and share prices.

Sources: The Guardian Business.