A Platform for
Sustainable
Growth
Annual Report
and Accounts 2023
Who we are
Ibstock Plc is a leading UK
manufacturer of a diverse range
of building products and solutions
What we do
The Group manufactures eight core product categories,
each backed up by design and technical services capabilities –
Bricks and Masonry, Façade Systems, Roofing, Flooring and
Lintels, Staircase and Lift Shafts, Fencing and Landscaping,
Retaining Walls, and Rail and Infrastructure.
The Group comprises two core business Divisions – Ibstock
Clay and Ibstock Concrete. The Ibstock Futures business was
established in 2021 to accelerate growth in new, fast-developing
segments of the UK construction market and, while it remains
in its initial growth phase, forms part of the Clay Division.
As a leading building products manufacturer, the Group is
committed to the highest levels of corporate responsibility.
The ESG 2030 Strategy sets out a clear path to address climate
change, improve lives and manufacture materials for life, with
an ambitious commitment to reduce carbon emissions by 40%
by 2030 and become a net zero operation by 2040.
Our purpose and vision
Ibstock exists to build a better world by being at the heart
of building through our vision of enabling the construction of
homes and spaces that inspire people to work and live better.
WE ARE IBSTOCK
Read more about our company
on our website using this QR code
or by visiting www.ibstock.co.uk
Project: Brindley Place, BirminghamFront cover: Product: Bexhill Purple Multi Brick Project: The John Modern College, RIBA Stirling Prize Award 2023 Governance
72 Governance at a glance
73 Chair’s introduction to Governance
74 Board of Directors and Company Secretary
76 Executive Leadership Team
77 Compliance and other statements
78 Board Leadership and Company Purpose
80 Activities of the Board in 2023
81 Shareholder engagement
82 Division of responsibilities
84 Board Evaluation
85 Audit, Risk and Internal Control
87 Nomination Committee Report
92 ESG Committee Report
94 Audit Committee Report
99 Directors’ Remuneration Report
117 Directors’ Report
120 Directors’ Responsibility Statement
121 Independent Auditor’s Report
Financial statements
131 Consolidated income statement
132 Consolidated statement of comprehensive income
133 Consolidated balance sheet
134 Consolidated statement of changes in equity
135 Consolidated cash flow statement
135 Reconciliation of changes in cash and cash equivalents
to movement in net debt
136 Notes to the consolidated financial statements
178 Company balance sheet
179 Company statement of changes in equity
180 Notes to the Company financial statements
184 Group five-year summary
Additional information
185 Cautionary Statement
186 Shareholder Information
01
Ibstock at a glance
Strategic Report
02 Highlights of our year
04
06 Our compelling investment case
08 Chair’s Statement
10 Chief Executive Officer’s Review
12 Our markets
14 Our purpose and business model
16 Our strategy
20 Key performance indicators
22 Principal risks and uncertainties
Ibstock Clay Operations Review
27
Ibstock Concrete Operations Review
29
31
Ibstock Futures Operations Review
33 Financial Review
37 Non-Financial and Sustainability Information Statement
38 Stakeholder engagement
42 Section 172(1) Statement
44 Our ESG ambitions
56 Task Force on Climate-Related Financial Disclosures (TCFD)
70 Viability and Going Concern Statements
Product: Architectural Masonry Project: Kings Cross Photography credits to Rob ParrishApprentices at Make UK training centre in BirminghamProject: Brown Acres, Belton Product: Shearstone Walling Stone Ibstock Plc | Annual Report and Accounts 2023Additional informationGovernanceFinancial StatementsStrategic Report Highlights of our year
Resilient performance
Financial highlights
Revenue
£406m
2022: £513m
2021: £409m
2020: £316m
Statutory reported profit before tax
£30m
2022: £105m
2021: £65m
2020: £(24)m
Statutory reported basic EPS
Total dividend per share
5.4p
2022: 21.6p
2021: 7.8p
2020: (6.8)p
Adjusted EBITDA*
£107m
2022: £140m
2021: £103m
2020: £52m
Adjusted free cash flow*
£(16)m
2022: £50m
2021: £51m
2020: £26m
7.0p
2022: 8.8p
2021: 7.5p
2020: 1.6p
Adjusted EPS*
13.9p
2022: 22.7p
2021: 13.9p
2020: 4.0p
Net debt*
£101m
2022: £46m
2021: £39m
2020: £69m
Alternative Performance Measures (APMs) are described in Note 3 to the consolidated financial statements.
*
All future references to APMs within the Strategic Report and Corporate Governance section are denoted by an asterisk, unless otherwise indicated.
02
Ibstock Plc | Annual Report and Accounts 2023 Non-financial highlights
Lost time injury frequency rate (LTIFR)
Carbon reduction metric
60%
37%
Reduction in LTIFR against a 2016 baseline
Decrease in absolute carbon relative to 2019 baseline.
2022: 61%
2021: 44%
2020: 41%
Clay reserves
73m
Tonnes of consented clay reserves
2022: 74m
2021: 74m
2020: 74m
Water reduction
+8%
2022: 20%
2021: Baseline reset in 2022
2020: Baseline reset in 2022
Plastic reduction
25%
Reduction in use of plastic packaging per tonne
of production relative to a 2019 baseline
2022: 16%
2021: 13%
2020: Target set in 2020
Net promoter score
32%
Reduction in mains water use per tonne
of production relative to 2019 baseline.
The Net Promoter Score (NPS) measures the loyalty
that exists between a company and its customers
2022: 31%
2021: 8%
2020: +10%
2022: 45%
2021: 33%
2020: 39%
Share of revenue from new and sustainable products
Female representation in senior leadership
11%
35%
Proportion of revenue generated from
new and sustainable products
Percentage of Senior Leaders who are women at year end
as defined by the FTSE Women Leaders Review
2022: 13%
2021: 13%
2020: 11.7%
2022: 27%
2021: 26%
2020: 22%
03
Ibstock Plc | Annual Report and Accounts 2023Additional informationGovernanceFinancial StatementsStrategic Report Ibstock at a glance
At the heart
of building with
a clear focus
on sustainable
growth and
value creation
Ibstock Plc is a leading UK
manufacturer of a diverse range
of building products and solutions
Our products and services
The Group
manufactures
products in eight
core categories
BRICKS AND
MASONRY
FAÇADE SYSTEMS
ROOFING
FLOORING
AND LINTELS
• Facing bricks
• Engineering bricks
• Brick slips
• Special shaped bricks
• Walling stone
• Architectural masonry
• Prefabricated
components
• Eco-habitats
• Padstones and lintels
• Brick faced GRC
• Architectural GRC
• Façade systems (brick,
• Roof tiles
• Roof accessories
• Chimneys
stone, porcelain)
• Mechanical brick slip
system (Mechslip)
• Lintels & soffits
(Nexus)
• Brick slips
• Beam and
block flooring
• Insulated flooring
• Hollowcore
screed rails
04
Read more about our business p06
Ibstock Plc | Annual Report and Accounts 2023 Our Divisions
95%
Raw materials
sourced in UK
£107m
Group Adjusted
EBITDA*
The Group comprises two core business Divisions:
Ibstock Clay and Ibstock Concrete.
Ibstock Futures forms part of the Clay Division whilst it remains
in its initial growth phase. This complements the core business
by accelerating diversified growth opportunities which address
key construction trends, including sustainability and the shift
towards Modern Methods of Construction (MMC).
Read more about our business p06
lbstock Clay
The leading manufacturer by volume of
clay bricks sold in the United Kingdom.
Sales by Division
Revenue
Adjusted EBITDA*
£292m
£99m
lbstock Concrete
A leading manufacturer of concrete roofing,
walling, flooring and fencing products, along
with lintels and rail and infrastructure products.
Sales by Division
Revenue
Adjusted EBITDA*
£114m
£19m
Key:
Bricks and masonry
Façade systems
Roofing
Flooring and lintels
Staircases and lift shafts
Fencing and landscaping
Retaining walls
Rail and infrastructure
Offices
Active quarries
STAIRCASES AND
LIFT SHAFTS
FENCING AND
LANDSCAPING
RETAINING
WALLS
RAIL AND
INFRASTRUCTURE
• Precast staircases
• Lift shafts
• Stepoc
• Slopeloc
• Keystone
• Fence posts
• Copings and cappings
• Gravel boards
• Bollards
• Balustrades
• Path edging
• Gully surrounds
• Urban landscaping
• Rail troughs
• Platform copers
• Cable theft protection
• Signal bases
• Utility ducts
• Inspection chambers
Our services
Design and
technical support
Off-site solutions
Bespoke concrete
products
Engraving and
cutting service
Read more about our business p06
05
Ibstock Plc | Annual Report and Accounts 2023Additional informationGovernanceFinancial StatementsStrategic Report Our compelling investment case
Why invest in Ibstock?
Our business has strong
fundamental qualities
We are focused on growth
Broad exposure to markets with
attractive long-term growth potential £170bn
Established market leadership position
in our core brick market and leadership
positions in attractive segments of
the concrete building products market
Diversified market exposure and
a product range unrivalled in its
breadth and depth
Well-invested asset base, extensive
consented clay reserves and unrivalled
UK operational network, creating
a strong competitive position
A trusted partner to a high-quality,
long-standing customer base
Size of the UK
construction market
in 2023 according
to the Construction
Products Association
No.1
Manufacturer of clay
bricks in the UK by
production capacity
15,000+
Different products
made each year
145m
Tonnes of clay reserves
of which 73m tonnes
are consented reserves
40+
years
Many of our long-
standing customer
relationships have
lasted over 40 years
Compelling growth strategy
combining development of our
core businesses with diversified
growth addressing new opportunities
in emerging, fast-growth areas of
the UK construction market
Atlas and
Aldridge
Commissioning of
these new factories
to start in 2024
Strong pipeline of growth projects in
our core brick and concrete businesses £45m
Ibstock Futures – an exciting
opportunity to diversify and
capture growth from faster-growing
segments of construction markets.
These markets are centred on the
use of more sustainable building
materials and Modern Methods
of Construction (MMC)
Strong organic and inorganic
pipeline underpinning significant
medium-term growth potential
Capital investment
in growth projects
during 2023
£100m
A clear roadmap for
Ibstock Futures to
become a £100m
turnover business
in the medium-term
2
1 acquisition &
1 asset purchase
completed in 2023
Read more
Coltman page 19
G-Tech page 19
Read more about our business page 12
Read more about Ibstock Futures, a growth
engine for more sustainable and modern
methods of construction on pages 31 and 32
06
Employees at Chesterton factoryIbstock Futures, Power Park, Wolverhampton Ibstock Plc | Annual Report and Accounts 2023 We are creating shareholder value
We have built sustainability into our
strategy, our products and our processes
A resilient and responsible
business run for the long term
See ESG Strategy
on pages 44 to 45
Leading our industry on adoption
of sustainable business practice,
supporting our customers’ ESG
journey, as well as meeting our
own carbon reduction targets
40%
Scope 1 and 2 carbon
reduction by 2030
Seizing the growth opportunity
from the accelerating transition
to sustainable construction
11%
Sales revenue from
new and sustainable
products
Significant earnings growth
potential over the medium-term
Structurally strong operating
margins and cash generation
Robust balance sheet and disciplined
capital allocation framework provide
the platform to both invest further
for growth and deliver incremental
shareholder returns
Sustainable and progressive
dividend policy targeting cover
of c.2x adjusted profit after tax
Excess capital returned to
shareholders as appropriate
£600m
Clear pathway to
revenues above £600m
through volume growth
in existing network and
committed investments
as market recovers
26.5%
Overall Group EBITDA
margin
20%
Committed to retaining
our capital discipline
with return on capital
employed (ROCE)
targeted at 20% in the
medium-term
7.0p
Total dividend
in 2023
£175m
Total returned to
shareholders in last
5 years
Read more about our financial progress and targets,
which demonstrate our ambition to deliver strong
growth and returns in the medium-term on page 33
Read more about our ESG strategy on page 45
07
Istudio, London2023 Apprentices at Make UK training centre in BirminghamIbstock Plc | Annual Report and Accounts 2023Additional informationGovernanceFinancial StatementsStrategic Report Chair’s Statement
Our continued
strategic progress
“The Group is well placed to deliver on its long-term
strategic commitments to sustain high performance,
deliver market-led innovation and selectively grow
our business for the benefit of all stakeholders.”
Jonathan Nicholls
Chair
WE ARE IBSTOCK
Read more about our
company on our website by
visiting www.ibstock.co.uk
This year, trading conditions across the
construction industry have been particularly
challenging, driven by high inflation and
interest rates, which is having a consequential
impact on house building. The management
of our business within this market environment
has called for sound and flexible stewardship
as well as decisive action, and the Company
took steps to right size the organisation for
the anticipated market in 2024.
Despite these challenges, I am extremely
pleased that this year’s Annual Report
and Accounts demonstrates a really
resilient set of results.
Over the course of the year, the Group
has continued to deliver on its long-term
strategic commitments to sustain, innovate
and grow our business. This performance is
a testament to the hard work of our teams
and is something which gives me a real
sense of pride and achievement.
08
Ibstock Plc | Annual Report and Accounts 2023 Results
The Group delivered a resilient
performance this year, reflecting our
continued focus on customer service and
execution, coupled with the disciplined
management of capacity and costs.
Market demand was more subdued than
expected. As a result, and in line with the
wider UK brick industry, sales volumes
decreased throughout the year. Despite
these weaker volumes, effective cost
reduction action combined with stable
pricing resulted in adjusted EBITDA* margins
remaining broadly in line with last year.
Despite the market uncertainty throughout
2023, the Board was encouraged that
our underlying profit expectations
remained unchanged throughout the
year, an impressive consequence of the
disciplined and focused management
on both capacity and costs.
The strength of our balance sheet
continues to provide both resilience in
more subdued conditions and strategic
optionality for the future. This is reflected
in our ongoing commitment to capability
and growth investment, with key projects
progressing well.
Dividend
The Board recommend a final dividend
of 3.6 pence per share, resulting in a
full-year dividend of 7.0 pence per share
(2022: 8.8 pence).
Our employees
We have continued to focus on the
wellbeing of all employees, whilst
maintaining a high quality service to
our customers and delivering positive
outcomes for all our stakeholders. In line
with our improved employee engagement
result, the Board was pleased by the approach
taken to support our colleagues as we took
difficult decisions to manage the cost base
of the organisation. It is a credit to all
involved that the strong, collegiate culture
of Ibstock has been maintained through
this year, and we want to thank all those
impacted for their incredible contributions
to Ibstock during their time here.
Board changes
This year, we have welcomed Nicola
Bruce to our Board as a Non-Executive
Director and Chair of the Remuneration
Committee. In addition, Louis Eperjesi
stepped into the role of Senior Independent
Director. Both of these matters are discussed
in detail within the Nomination Committee
Report on page 87.
Diversity
The Board recognises the powerful
advantages that a diverse Board and
workforce can bring to a company, and we
are committed to ensuring that Ibstock is
a diverse, fair and inclusive place to work.
The Board is cognisant of the FTSE Women
Leaders Review recommendation that
FTSE 350 companies should have at least
one woman in the role of Chair, Senior
Independent Director, CEO or CFO. We are
committed to addressing the balance within
these roles as succession plans are developed.
Governance
During such challenging times, the Board
remains more committed than ever to
driving long-term sustainable performance
for the benefit of all our stakeholders.
This includes the application of high
standards of corporate governance and
making sure that these principles are
embedded into our culture. Within this
report, we set out in detail how we as a
Board have made decisions, engage with
our stakeholders and comply with the
principles of the 2018 UK Corporate
Governance Code.
ESG
The Board takes our ESG plans very
seriously and is passionate about
realising our carbon reduction journey
whilst maintaining our financial
performance. More information on how
our ESG Strategy is embedded within
our corporate strategy is detailed
throughout this report and within
our Responsible Business section.
DIRECTORS’
DUTIES
At Ibstock, the Directors take their
responsibilities to stakeholders
very seriously. The Board ensures
all stakeholder views, whether
complementary or diverging, are
understood and embedded into
Board discussions and the decision-
making process. Directors also
consider the impact of the Group’s
activities on the communities within
which it operates, the environment,
and the Group’s reputation for high
standards of business conduct.
Looking towards the future
We remain mindful of broader
macroeconomic uncertainties. However,
due to our strong business model, strategy
and management team, the Group remains
well placed to meet these challenges and is
well positioned for the market recovery.
In the year ahead, the Board will
continue to discharge its stewardship
role in supporting the long-term success
of the business.
Jonathan Nicholls
Chair
5 March 2024
09
Product: Architectural Masonry Project: Kings Cross Photography credits to Rob ParrishIbstock Plc | Annual Report and Accounts 2023Additional informationGovernanceFinancial StatementsStrategic Report Chief Executive Officer’s Review
A resilient year with a
platform for recovery
and growth in place
“We have delivered a resilient performance for the year in what have been
very difficult market conditions. I am proud of the way that colleagues across
the Group have responded in such challenging circumstances and set up the
Company to emerge stronger than ever by focusing on our longer-term goals.”
Joe Hudson
Chief Executive Officer
The Group delivered a resilient performance for
the year, against what has been a challenging
market backdrop. Activity in our core residential
markets was materially below the comparative
period, with domestic industry sales volumes
experiencing a slowdown as the 2023 year
progressed. Despite these difficult market
conditions, adjusted profit for the 2023 year
was in line with the expectations set at the
start of the year, underlining the quality
and resilience of the business.
I am particularly pleased by the way colleagues
across the Group responded to the challenging
market conditions, as the UK new build housing
market adjusted to higher interest rates and
increased economic uncertainty. The result
achieved reflects both continued strong
commercial execution and the difficult, but
necessary, action taken in the second half
of the year to realign costs and capacity with
near term market conditions. Whilst taking this
action, we have been focused on preserving key
skills and knowledge to ensure that the Group
retains the ability to build back quickly when
markets recover. We manage these actions
according to our strong values and try to give
anyone impacted as much support as possible.
As part of the operational review undertaken
during the second half, we also took steps to
integrate our core commercial and innovation
capabilities, thereby sharpening our customer
proposition and ensuring we go to market in
a more aligned, co-ordinated way.
10
Ibstock Plc | Annual Report and Accounts 2023 As we took appropriate action to respond to
difficult market conditions, we also continued
to make good progress with the investment
projects that will underpin our future growth
as the market recovers. Our investment in new
low-cost, efficient and more sustainable brick
manufacturing capacity at our Atlas facility,
and the first phase of a significant capacity
expansion in the fast-growing brick slips market,
are both in the commissioning phase, and will
support our medium-term growth objectives
as markets recover.
We were also honoured to receive the prestigious
Sustainability Supplier award at the global 2023
Siemens Mobility Awards in Munich, for the
development of an innovative sustainable
Signal Base solution.
Selective Growth
Our redeveloped Atlas ‘pathfinder’ factory will
manufacture our lowest-ever embodied carbon
brick range and we are excited about making our
first customer deliveries of this innovative new
product during the first half of 2024.
2023 Performance
As you will see throughout this report, our
performance during 2023 has been robust against
a challenging market backdrop, with profit in line
with the expectations set at the start of the year.
Revenue of £406 million was 21% below the prior
year (2022: £513 million), reflecting significantly
lower activity levels in our core residential markets.
This year, we acquired Coltman Precast and the
assets of G-Tech, which supports our expansion
of our Concrete Division into new markets and
customer segments.
We successfully completed a pilot project to fire
clay bricks using synthetic gas produced from
waste and are now in commercial negotiations
to commission assets at one of our sites.
Adjusted EBITDA* was £107 million
(2022: £140 million), reflecting the significant
reduction in sales volumes, mitigated by stable
pricing and the disciplined management of
capacity and costs.
We consolidated our Ibstock Futures operations
into a single location in the West Midlands and
will develop this site to become a state-of-the-art
innovation hub for Façades and Modern Methods
of Construction (MMC).
The new automated brick slips cutting line at
Nostell, West Yorkshire, is now commissioning,
with customer deliveries expected to commence
during the first half of 2024. This line will deliver
up to 17 million slips per annum, once operating
at full capacity. Phase two of the Nostell
redevelopment, the construction of a larger
brick slip systems line, is progressing well, and
will deliver a further 30 million slips per annum.
Our People
Our bi-annual employee engagement survey
received an increased participant rate and
all measures showed improvement.
Environmental Performance
We continue to take action at all levels in
our business to deliver our ambitious target of
a 40% reduction in carbon by 2030, and are
pleased to receive further external recognition
for the leadership role we are playing in ESG.
It is this continuous focus, and the combined benefit
from incremental actions across the business, which
moves us forward towards this target.
Priorities for 2024
We will continue to focus on our strategic
objectives and on making decisions that
benefit all stakeholders over the long term.
With market conditions in the early weeks of the
new financial year similar to those experienced
during the second half of the prior year, we
anticipate residential construction markets to
remain subdued in the near term, with volumes
improving as the year progresses.
The Group’s balance sheet remains strong with
closing net debt at £101 million (2022: £46 million)
representing leverage of 1.1 times (2022: 0.4 times).
Sustainable High Performance
We have invested significant capital over the
last five years to enhance the reliability and
performance of our factory networks. During 2023,
the Group’s manufacturing estate delivered
another robust performance driven by a flexible
and disciplined approach to capacity and cost
management and both the Clay and Concrete
factory networks delivered improvements in
reliability, quality and yield.
During the year, we also completed a major
kiln rebuild at the Parkhouse brick factory
and continued to make progress on key
asset transformation and automation
initiatives, including the commissioning
of a growth investment at our walling
stone factory at Anstone, near Sheffield.
We also continue to drive our environmental
performance through initiatives such as an
investment in the Laybrook factory.
Market-led Innovation
As market leader in clay and concrete products,
we have the broadest range of building products
and solutions available in the UK, and we continue
to invest to enhance our offer.
During 2023, we created a single dedicated
innovation function to serve all the Group’s
markets, fully commissioned our new Ibstock
Futures innovation hub and developed our first
set of Environmental Product Declarations (EPDs).
We also launched a new ‘One Ibstock’ brand
and website, and restructured our sales and
commercial teams to bring a more co-ordinated
and customer-centric approach. We also
successfully piloted our online customer portal.
HEALTH,
SAFETY AND
WELLBEING
We remain focused on creating a
positive, proactive safety culture
underpinned by a belief that all
incidents across our operations are
preventable. Our further progress
during 2023 was reflected in the
60% reduction in Lost Time Injury
Frequency Rates (LTIFR) from the
2016 baseline.
Read more Page 52
As we look further ahead, it is clear that market
fundamentals remain supportive, with significant
unmet demand for new build housing in the UK.
We therefore expect a strong recovery in activity
as macroeconomic conditions normalise. Although
the timing of this recovery is uncertain, Ibstock is
well positioned to respond and to deliver on our
growth targets over the medium-term. We will
therefore focus on our strategic projects and
operational strategy in 2024.
The Group remains in a strong financial position,
with a robust balance sheet providing significant
resilience and optionality in respect of future
growth investments.
Joe Hudson
Chief Executive Officer
5 March 2024
11
Ibstock Plc | Annual Report and Accounts 2023Additional informationGovernanceFinancial StatementsStrategic Report Our markets
The growth opportunities
in our markets
We continue to be well positioned in markets with positive long-term
fundamental drivers. Through our deep understanding of the key
drivers in our markets, we are able to formulate our strategy based
on the most attractive growth opportunities for our business.
% UK construction output by sector (2023)
4
16
20
3
15
20
5
13
4
Private housing
Public housing
Private housing repair,
maintenance and improvement
Public housing repair, maintenance
and improvement
20%
3%
15%
4%
Commercial
Public non-housing
Non-housing repair
and maintenance
Infrastructure
Industrial
13%
5%
20%
16%
4%
(Source: CPA data for Winter 2023-24)
The macroeconomic
backdrop is set to improve
5.25%
The current Bank of England base interest rate.
There is a significant
undersupply of housing
c130k
2023 household completions was c130k against a
target of 300k (2022: c150k).
There is an undersupply of housing within the UK. Whilst
there is cross-party political support to build more homes,
the current macroeconomic backdrop has reduced demand.
Inflation and interest rates are key factors in determining
levels of access to, and affordability of, funding for consumers
to purchase a property.
Demand for our products is directly affected by the volume
of developments in the residential sector where we mainly
operate, as well as the general level of construction activity.
The Bank of England has increased the base interest rate from
almost zero (0.1%) in December 2021 to the current rate of
5.25%. This has led to increased mortgage rates becoming
less affordable to the house buyer.
Impact on our industry
• The construction industry has faced a challenging year
as the number of new homes built has decreased as a
result of macroeconomic factors and a more difficult
planning environment.
• New-build housing is expected to recover as macroeconomic
conditions improve. Political support for house building is
expected to contribute to this recovery.
Impact on our industry
• Higher inflation and interest rates have created a tough
trading environment. However, these trends are expected
to start to reverse over the next year. These macroeconomic
trends have led to lower housing demand in the short-term,
which has in turn created less demand for building products.
• The industry will need to be prepared to increase production
levels once the demand trends in these areas improve.
How we are responding
How we are responding
How we are responding
How we are responding
• Our business is well positioned and primed for market recovery.
• We have ensured the Group has the ability to serve customers
by building inventories and retaining the ability to bounce
back productive activity quickly.
• We have carefully and decisively managed our cost and
production levels to ensure we are right sized for current
demand, but able to increase production quickly when
the market recovers.
• We are focused on reducing imported brick volumes by
ensuring available domestic capacity, delivering on our
service commitments and new product development.
12
The regulatory environment is
undergoing significant change
31%
The reduction in carbon emissions required
under Building Regulation Part L compared
with the previous regulation.
There are significant opportunities
in diversified markets
c14,500
In 2023 there were c2,000 large to mega projects
with detailed planning and c12,500 mid- to high-
rise buildings requiring remediation within the UK.
New building code standards and greater environmental
The mid- to-high-rise sector as well as the retrofit market
awareness are leading our customers to demand more
are more resilient to the cyclical macroeconomic trends
sustainable products.
that impact the conventional house building industry.
The Building Safety Act 2022 includes several mandatory
measures intended to make buildings and residents safer.
The introduction of a new regulator for construction
products will oversee enhanced levels of safety of
construction product within the UK market.
• There are increased focus and requirements regarding safety
and environmental impacts.
• The industry will need more collaborative ways of working
to efficiently and effectively implement new requirements.
Impact on our industry
Impact on our industry
• The construction industry is having to adapt to the changing
• The industry is seeking to create products and solutions
customer demands and regulatory requirements.
which meet the demands of modern construction markets.
• We have a strong product development pipeline
to ensure we meet changing customer demands.
• We are increasing our diversified markets exposure to
provide countercyclical protection.
• We are increasing our customer engagement across
• The increasing focus on non-combustible cladding systems
different sectors.
coupled with brick being the most popular façade aesthetic
• We are a participating member of the UK Green Building
in the UK provides us with growth opportunities outside of
Council (UKGBC) and Future Homes Hub (FHH) with detailed
our core markets. Brick façades are taking an increased share
of these fast-growth markets.
• We have an engagement programme that covers the whole
industry knowledge.
supply chain.
• We continue to train and upskill our colleagues.
Ibstock Plc | Annual Report and Accounts 2023 Ibstock’s key markets are:
New housing – The new build housing market accounts
for around a quarter of total construction output in the UK.
This market is a core focus for us and we hold market-leading
positions in many of our product categories.
Housing repair, maintenance and improvement (RMI) –
Housing RMI accounts for 15% of the total UK construction
output, and is a key focus for our business.
Commercial and public sector – Commercial and public
sector construction accounts for almost 20% of total output.
Many project types are covered within these sectors, including
offices, retail, schools, hospitals and other public buildings.
We have a long track record of supplying a wide range of
products and systems into these sectors, including many
award-winning projects.
Infrastructure – Infrastructure currently accounts for around
16% of total construction output and has shown strong growth
over the past few years. We have a growing presence in this
sector, particularly in the rail sub-sector with our range of
innovative, lower-carbon products.
Diversified markets – The markets that we are diversifying
into include the mid- to high-rise sector, build to rent and
off-site construction. Increasingly we are serving diversified
construction markets including off-site and modular markets.
Read more about Our Business page 04 to 07
The regulatory environment is
undergoing significant change
31%
The reduction in carbon emissions required
under Building Regulation Part L compared
with the previous regulation.
There are significant opportunities
in diversified markets
c14,500
In 2023 there were c2,000 large to mega projects
with detailed planning and c12,500 mid- to high-
rise buildings requiring remediation within the UK.
New building code standards and greater environmental
awareness are leading our customers to demand more
sustainable products.
The mid- to-high-rise sector as well as the retrofit market
are more resilient to the cyclical macroeconomic trends
that impact the conventional house building industry.
The Building Safety Act 2022 includes several mandatory
measures intended to make buildings and residents safer.
The introduction of a new regulator for construction
products will oversee enhanced levels of safety of
construction product within the UK market.
Impact on our industry
• The construction industry is having to adapt to the changing
Impact on our industry
• The industry is seeking to create products and solutions
customer demands and regulatory requirements.
which meet the demands of modern construction markets.
• There are increased focus and requirements regarding safety
and environmental impacts.
• The industry will need more collaborative ways of working
to efficiently and effectively implement new requirements.
How we are responding
How we are responding
How we are responding
How we are responding
• We have a strong product development pipeline
to ensure we meet changing customer demands.
• We are increasing our customer engagement across
different sectors.
• We are a participating member of the UK Green Building
Council (UKGBC) and Future Homes Hub (FHH) with detailed
industry knowledge.
• We have an engagement programme that covers the whole
supply chain.
• We continue to train and upskill our colleagues.
• We are increasing our diversified markets exposure to
provide countercyclical protection.
• The increasing focus on non-combustible cladding systems
coupled with brick being the most popular façade aesthetic
in the UK provides us with growth opportunities outside of
our core markets. Brick façades are taking an increased share
of these fast-growth markets.
13
There is a significant
undersupply of housing
The macroeconomic
backdrop is set to improve
2023 household completions was c130k against a
The current Bank of England base interest rate.
5.25%
c130k
target of 300k (2022: c150k).
There is an undersupply of housing within the UK. Whilst
Inflation and interest rates are key factors in determining
there is cross-party political support to build more homes,
levels of access to, and affordability of, funding for consumers
the current macroeconomic backdrop has reduced demand.
to purchase a property.
Demand for our products is directly affected by the volume
The Bank of England has increased the base interest rate from
of developments in the residential sector where we mainly
almost zero (0.1%) in December 2021 to the current rate of
operate, as well as the general level of construction activity.
5.25%. This has led to increased mortgage rates becoming
less affordable to the house buyer.
Impact on our industry
Impact on our industry
• The construction industry has faced a challenging year
• Higher inflation and interest rates have created a tough
as the number of new homes built has decreased as a
result of macroeconomic factors and a more difficult
planning environment.
trading environment. However, these trends are expected
to start to reverse over the next year. These macroeconomic
trends have led to lower housing demand in the short-term,
• New-build housing is expected to recover as macroeconomic
which has in turn created less demand for building products.
conditions improve. Political support for house building is
• The industry will need to be prepared to increase production
expected to contribute to this recovery.
levels once the demand trends in these areas improve.
• Our business is well positioned and primed for market recovery.
• We have carefully and decisively managed our cost and
• We have ensured the Group has the ability to serve customers
production levels to ensure we are right sized for current
by building inventories and retaining the ability to bounce
demand, but able to increase production quickly when
back productive activity quickly.
the market recovers.
• We are focused on reducing imported brick volumes by
ensuring available domestic capacity, delivering on our
service commitments and new product development.
Ibstock Plc | Annual Report and Accounts 2023Additional informationGovernanceFinancial StatementsStrategic Report Our purpose and business model
Delivering value
Ibstock exists to build a better world by being
at the heart of building through our vision of
enabling the construction of homes and spaces
that inspire people to work and live better.
Who we are
Ibstock is a leading manufacturer and supplier
of clay, concrete and diversified building products
and solutions to the UK construction industry.
We focus on the environmental and social
impacts of our business, specialising in products
and systems for the residential building envelope
and infrastructure markets.
What we do
Our core business focuses on the residential
construction sector, where we have built strong
relationships with our house builder, developer,
builders’ merchant and distributor customers
over many years. Ibstock Futures has been
established to accelerate diversified growth
opportunities, to address key construction
trends of sustainability and Modern Methods
of Construction (MMC).
Underpinned by our
values and behaviours
Our stated values were developed internally
through a series of interviews and face-to-face
workshops attended by people from every part
of our business.
Teamwork We work together to achieve great things
Trust We earn the trust placed in us by
delivering on our promises
Care We care about each other, our
customers and our wider impact
Courage We have the courage to do
the right thing
Find out more
Our markets p12
Our strategy p16
Key performance indicators p20
Responsible Business p37
Principal risks and uncertainties p22
14
What makes us distinctive
Extraction
Clay and shale used in our brick production
process is sourced from clay quarries that the
Group operates on land that it owns or leases
under long-term agreements. The quarries are
in the vicinity of our brick manufacturing plants,
providing security of supply of the key raw
material used in brick manufacture.
PRINCIPAL RISKS: Regulatory and compliance; people
and talent management; business continuity; health,
safety and environment (HSE); and economic conditions
Procurement
The Group is a major customer for a number
of its key third party suppliers, which allows
efficient purchasing and transportation,
together with the establishment of long-term
relationships. Additionally, for the Group’s
concrete products, the main raw materials
are bulky in nature and are locally sourced.
Natural gas and electricity costs represent
a significant component of our cost base.
The Group regularly reviews its energy costs
and uses forward purchasing contracts to
increase pricing certainty when favourable
compared with future price expectations
in the open market.
PRINCIPAL RISKS: Regulatory and compliance; people
and talent management; climate change; and financial
risk management
Product design
The Group continually seeks to improve
the quality of its existing products and also
introduce new and sustainable products through
innovation and investment in new technology.
Our new product development programme
works closely with customers and our sales team
to identify opportunities for new products.
PRINCIPAL RISKS: Regulatory and compliance; people
and talent management; major project delivery; and product
demand and innovation
Manufacturing
The Group has the largest brick production
capacity and a strategic footprint across the UK.
We also have the most advanced concrete roof
tile line in the UK and our concrete landscaping
and flooring manufacturing facilities provide
us with market-leading positions. The Group
manufactures bricks through two main
methods, wire cut and soft mud, which take
their names from the processes used to create
them. The Group’s concrete products are made
from cement, sand, and mixtures and pigments,
which are mixed together.
PRINCIPAL RISKS: Regulatory and compliance; people
and talent management; business continuity; cyber and
information systems; climate change; major project delivery;
anticipating product demand and innovation; HSE; and
economic conditions
Sales
The Group differentiates itself as a
manufacturer by employing people to assist
specifiers and customers in their designs and
efficient use of our products. Ibstock sells its
products to a diverse group of customers in the
UK construction industry. The core business now
operates with a single commercial team that is
aligned by customer group and region in order
to focus on key decision-makers and customers.
This is monitored through extensive and regular
customer satisfaction surveys.
PRINCIPAL RISKS: Regulatory and compliance; people and
talent management; cyber and information systems; climate
change; anticipating product demand and innovation; and
financial risk management
Distribution
The Group’s 32 principal manufacturing
locations across the UK are strategically located
close to main transportation links to facilitate
onward distribution. The Group outsources
the majority of its haulage to contractors.
PRINCIPAL RISKS: Regulatory and compliance; people
and talent management; business continuity; cyber and
information systems; HSE; and economic conditions
Environment
Our ESG commitment runs through our strategy.
We aim to minimise our impact on the environment
wherever possible. Our ESG 2030 Strategy details
our commitment to achieve 40% absolute carbon
reduction by 2030 and to be net zero by 2040
(Scope 1 and 2).
PRINCIPAL RISKS: Regulatory and compliance;
people and talent management; and HSE
Ibstock Plc | Annual Report and Accounts 2023 Our unique sources
of advantage
Market leadership
Our market-leading businesses enable us to
benefit from the expected growth in demand
in the UK. We have over 73 million tonnes
of consented clay reserves and in excess of
145 million tonnes of clay resources, providing
good support for production capacity across
all our clay plants.
Long-standing customer relationships
Our customer focus is based on quality, service
and consistency and our service-led ethos is one
of the key drivers in the growth in our market
share in bricks over the past 10 years. Many of
our long-standing customer relationships have
lasted over 40 years.
Growing capacity
We are investing in the latest technology to
increase capacity and to meet the evolving
market demands.
Highly experienced management team
Our management team has extensive
experience in the building products industry.
Our resources and relationships
• Strong heritage and brand known for
quality and consistency
• Well invested manufacturing facilities and
technology to support customer service
• Highly skilled workforce
• Strong design focus including our I-Studio
in Central London
• High barriers to entry in our market
• Strong health and safety track record
• Strong balance sheet
• Unrivalled operational footprint and
clay reserves
• We own or manage 3,281 acres of land
in the UK
Read more about our Resources
on pages 04 to 05
And the value we create
Investors
We have a sustainable and progressive dividend
policy. This policy is supported by businesses
with structurally high margins and strong cash
generation and a strategy that provides a strong
platform for future growth and value creation.
Customers
Our five main customer groups are builders’
merchants, house builders, specialist brick distributors,
contractors and installers. Customers play a crucial
role in shaping our growth and driving our innovation.
Collaborative and long-term mutually beneficial
relationships with our customers are the foundation
of our success. We have an unrivalled choice of
products within our clay bricks offering and are a
full-range supplier within our concrete businesses.
This provides customers with the greatest possible
range of products.
Communities
Our activities can have a lasting impact on the
communities in which we operate. We are an
important employer in the many areas where
we are located. We interact directly with the
communities in which we operate, contributing
to them through our work with local schools
and charities. We are a UK taxpayer, with a
commitment to pay all appropriate taxes on a
timely basis. We strive to leave a positive legacy.
Suppliers and partners
We forge long-term relationships with our key
suppliers, and conduct business in a fair, open
and transparent way. Our policies and procedures
are all aimed at ensuring we work safely, equitably
and in the best interests of both parties, as well
as the Group’s other stakeholders.
Employees
Alongside our focus on providing a safe and
healthy working environment, we invest in
ongoing training, development and career
progression. We also encourage employee share
ownership through our Sharesave scheme and
our Fire Up share grant, to ensure that value
flows through to our employee stakeholders.
Environment
We aim to minimise our impact on the
environment in everything that we do, so that our
business continues to be sustainable at all levels
in the longer term.
Pension fund members and Trustees
We have entered into insurance contracts
to underwrite our pension commitments
and reduce risk to the Group.
Government and Regulators
We engage with Government and Regulatory
Authorities to support the development and
application of all laws and regulations within
the construction sector.
Read more about Our Stakeholders on pages 38 to 41
15
Ibstock Plc | Annual Report and Accounts 2023Additional informationGovernanceFinancial StatementsStrategic Report Our strategy
Strategic overview
Ibstock’s strategy is to optimise and enhance our
existing business, whilst investing for growth in
both core and diversified construction markets.
Our strategy comprises three pillars, which are:
Sustainable high performance
Market-led innovation
Selective growth
These support the delivery of our purpose.
We believe in ensuring that our business operates responsibly
and delivers value to all of our stakeholders. We are committed
to delivering our strategy in the context of our Environment,
Social and Governance (ESG) 2023 Strategy, and see that
these are fundamentally interlinked.
Underpinning the delivery
of our strategy
Underpinning the delivery of our strategy is our robust business
model, our strong corporate culture and our core values:
Teamwork
Trust
Care
Courage
It is the combination of all of these elements that will enable us
to deliver our purpose and our ambition to drive sustainability
in our manufacture of clay and concrete building products.
Our KPIs on pages 20 and 21 measure our success against our
strategy pillars, with examples of our strategy in action across
pages 17 and 19.
Underpinned by our ESG Strategy
and biodiversity net gains.
e Decarbonising our products, processes and supply chain by focusing on carbon reduction, water efficiency
g
n
a
h
C
e
t
a
m
40% reduction in Scope 1 and 2 carbon by 2030, Net Zero in Scope 1 and 2 by 2040, Net Zero in Scope 3 by 2050.
i
l
C
KPIs
• Carbon reduction metric – Decrease in absolute carbon relative to 2019 baseline
• Biodiversity net gain
• Water efficiency
s Building our social value by investing in our people, our culture and our communities. Ensuring our colleagues
e
v
i
L
belong, thrive and grow and that we make a positive impact in the communities in which we operate.
KPIs
• Health, Safety and Wellbeing – Lost time injury frequency rates (LTIFR)
• Inspiring Futures – Percentage of workforce in Earn and Learn positions
• Employee Experience – Women in senior leadership
f
i
L
r
o
f
s
l
a
i
r
e
t
a
M
e Evolve our products, processes and services by incorporating whole lifecycle design, preserving raw materials
and future proofing our offer to customers through a diversified portfolio. This is driven by product innovation
to support dematerialisation and circular economy principles.
KPIs
• Product innovation – Percentage sales from new and sustainable products
• Circular economy
• Dematerialisation
g
n
i
s
s
e
r
d
d
A
g
n
i
v
o
r
p
m
I
g
n
i
r
u
t
c
a
f
u
n
a
M
16
Ibstock Plc | Annual Report and Accounts 2023
Sustainable high
performance
As a large scale industrial business, sustainable high performance is at
the core of what we do. We will continually develop new organisational
capabilities to drive world-class performance across our operations.
We are focused on the following three priorities:
Health, safety and wellbeing Operational excellence
Environmental performance
KPIs
LTIFR
2023
2022
60% 61%
Adjusted EBITDA
Return on capital
employed (ROCE)
Carbon reduction metric
2023
2022
£107m £140m
13.4% 23.4%
20%
37%
Absolute carbon reduction
% sales from new and
sustainable products
2023
2022
37% 20%
11% 13%
Resilient performance towards our strategy
Reliability, quality and yield
Despite a material reduction in
production volumes year-on-year,
both the Clay and Concrete factory
networks delivered improvements
in reliability, quality and yield.
Synthetic gas production
We have completed a pilot project to fire
clay bricks using synthetic gas produced
from waste. We are now in commercial
negotiations to commission assets at
one of our sites.
Parkhouse kiln rebuild
In 2023, we completed a major kiln
rebuild at the Parkhouse brick factory
which delivers energy and cost efficiencies.
Anstone automated line
The investment in a fully automated
line at our walling stone factory will
drive significant safety benefits, increase
product quality and increase capacity
by about 30%. This is currently in the
commissioning phase.
Laybrook Factory
We received funding from the
Government’s Industrial Energy
Transformation Fund to support a
major sustainability investment at
our Laybrook brick factory in West
Sussex, which we estimate will deliver
a reduction in carbon emissions of
more than 15%.
Rainwater harvesting
A new rainwater harvesting system
was installed at Ibstock’s concrete
factory in Bootle.
Reduction in Lost Time Injury
Frequency Rate (LTIFR)
We remain focused on creating
a positive, proactive safety culture
underpinned by a belief that all incidents
across our operations are preventable.
Our further progress in the period was
reflected in the 60% reduction in LTIFR
from the 2016 baseline.
Key initiatives in the year included safety
training leadership programmes for
managers and Safe Start 2023 workshops
for all employees. 26 of the Group’s
factories were recognised for achieving
LTIFR free milestones in the year, with
our Concrete factory in Bootle, Liverpool
achieving over 4,000 incident-free days.
The Group also received several external
industry awards in recognition of its safety
progress and sector-leading approach,
including the Award of Excellence from
the British Ceramic Council (BCC) for
outstanding contribution to Health
& Safety across the industry.
More information Operations Review on pages 27 to 32
Link to risks
• Business continuity • Regulatory and compliance • People and talent management
• Cyber & information systems • Health, safety & environment (HSE) • Economic conditions
• Financial risk management • Maintaining customer relationships and market reputation • Climate change
17
Ibstock Plc | Annual Report and Accounts 2023Additional informationGovernanceFinancial StatementsStrategic Report Our strategy continued
Market-led
innovation
Innovation is a critical element of our growth plans as we
continually enhance of our product portfolio and customer
proposition to strengthen our market-leading positions.
Our initiatives are centred around:
Product
innovation
Strategic KPIs
Customer experience
Digital
transformation
% sales from new and
sustainable products
2023
2022
11% 13%
Net promoter score
Revenue
2023
2022
32% 45%
£406m £513m
Net promoter score
2023
32%
2022
45%
Online customer portal
The digitisation of our business is a key
strategic enabler as we begin to drive
an increasing proportion of our sales
activities through digital channels.
During the 2023 year we successfully
piloted our online customer portal with
a small number of our builders’ merchant
customers, and expect to scale this
activity further during the year ahead.
Resilient performance towards our strategy
Dedicated innovation function
To improve the flow of innovative new
products across our business, during
the year the Group created a single
dedicated innovation function to serve
all the Group’s markets, with a mandate
covering new product development,
quality and technical standards.
Environmental product declarations
(EPDs)
The Group developed the first EPD for
its Clay business, providing customers
with essential data on the environmental
impact of our product range for the
first time.
2023 Siemens Mobility Awards
Our Concrete Division were honoured
to receive the prestigious Sustainability
Supplier award at the global 2023
Siemens Mobility Awards in Munich,
for the development of an innovative
sustainable Signal Base solution.
One Ibstock
The Group made significant progress
in 2023 on enhancing customer
experience – making it easier than ever
to access the diverse range of building
products and solutions offered by the
Group. As well as launching a new ‘One
Ibstock’ brand and website earlier in
the year, the recent restructuring of our
sales and commercial teams is bringing
a more co-ordinated and customer-
centric approach. We firmly believe
that our powerful brand and unrivalled,
unified product offering will increasingly
offer us a source of competitive advantage
in UK construction markets over the
years ahead.
Following the exceptional performance
of the NPS score last year, this year’s
score has returned to a similar ratings
as previous years.
More information Operations Review on pages 27 to 32
Link to risks
• Business continuity • Regulatory and compliance • People and talent management
• Cyber & information systems • Health, safety & environment (HSE) • Anticipating product demand & innovation
18
Ibstock Plc | Annual Report and Accounts 2023 Selective
growth
We will expand core business to deliver long-term
growth and value creation by investing in both
organic and inorganic growth opportunities.
Clear path for growth and value creation through a combination of:
Expanding our core business
Diversification into adjacent
market segments
Grow our people and
develop/embed our culture
Strategic KPIs
Carbon intensity
Return on capital
employed (ROCE)
2023
0.151
2022
0.145
13.4% 23.4%
% sales from new and
sustainable products
2023
2022
11% 13%
Female representation on
senior management teams
2023
2022
35% 27%
Resilient performance towards our strategy
Atlas
Our redeveloped Atlas ‘pathfinder’
factory will manufacture our lowest-ever
embodied carbon brick range and we are
excited about making our first customer
deliveries of this innovative new product
during the first half of 2024.
G-Tech Copers Limited
We completed a small bolt-on asset
acquisition in our infrastructure business,
acquiring the trade and assets of G-Tech,
an innovative designer and supplier of
concrete railway platform solutions, to
expand our differentiated proposition
in the railway infrastructure market.
Acquisition of Coltman
On 30 November 2023, Ibstock acquired
Coltman Precast Concrete (Coltman).
Coltman manufactures Hollowcore,
staircases and landings with flexibility
to produce a wider range of pre-stressed
and pre-cast products.
Nostell
The new automated brick slips cutting
line at Nostell, West Yorkshire is now
commissioning with customer deliveries
expected to commence during the first
half of the year. This represents a first
significant step towards building a scale
leadership position in this fast-growing
product category.
Ibstock Futures
Ibstock Futures made good operational
and strategic progress during the year
as it continued to build its capabilities
in new, fast-growth areas of the UK
construction market.
We successfully proved the technical
feasibility of using our owned clay
reserves to manufacture calcined clay
for use as a cementitious replacement.
Employee engagement survey
The results of our bi-annual employee
engagement survey demonstrated
very solid progress, with participation
rates increasing to 76% (2021: 62%)
and all engagement measures
showing improvement.
Fire Up story
The Ibstock Story and the ‘Fire Up’
recognition programme continues
to inspire and unite colleagues across
the business.
Apprenticeship programme
In 2023 we recruited 17 apprentices
to join our industry-leading
apprenticeship programme.
Equality, diversity and inclusion
In 2023 Ibstock became a founding
member of the Construction Inclusion
Coalition (CIC), the new industry body
created to improve equality, diversity and
inclusion across the construction sector.
More information Operations Review on pages 27 to 32
Link to risks
• Business continuity • Regulatory and compliance • People and talent management
• Cyber & information systems • Health, safety & environment (HSE) • Major project delivery
19
Ibstock Plc | Annual Report and Accounts 2023Additional informationGovernanceFinancial StatementsStrategic Report Our key performance indicators
Financial KPIs
Revenue
2023
2022
2021
2020
2019
£m
513
406
409
409
316
Description
Revenue represents the value for the sale
of our building products, net of local sales
tax and trade discounts.
107
Adjusted
EBITDA*
2023
2022
2021
2020
2019
Description
Represents profit before interest,
taxation, depreciation and amortisation
after adjusting for exceptional items*.
103
52
122
£m
140
Net debt to
adjusted EBITDA*
2023
2022
2021
2020
2019
0.40
0.40
0.74
1.1
£m
1.50
Description
Net debt, comprising short- and long-term
borrowings less cash, over adjusted EBITDA*
(as defined) prior to the impact of IFRS 16.
Why important?
Revenue provides a measure of the
financial growth of the Group.
Why important?
Adjusted EBITDA* provides a key measure
to assess the Group’s profitability.
Why important?
Net debt to adjusted EBITDA* provides a useful
measure in assessing the Group’s financial strength.
Link to strategy
Link to strategy
Link to strategy
Remuneration linkage
No specific linkage to remuneration
structures at present.
Remuneration linkage
A key financial measure within the
Annual and Deferred Bonus Plan (ADBP).
Remuneration linkage
No specific linkage to remuneration
structures at present.
Adjusted ROCE*
Adjusted EPS*
%
Pence per share
3.7
13.4
23.4
15.8
2023
2022
2021
2020
2019
Description
The ratio of profit before interest and taxation,
after adjusting for exceptional items*, to average
net assets and debt (excluding pension).
19.3
Why important?
Adjusted ROCE* provides an indication
of the relative efficiency of capital use
by the Group over the year.
Link to strategy
4.0
22.7
13.9
13.9
2023
2022
2021
2020
2019
Description
Basic earnings per share adjusted for exceptional
items*, amortisation and depreciation on fair
valued uplifted assets and non-cash interest,
net of the associated tax charge.
18.3
Why important?
Adjusted EPS* provides useful information in assessing
the performance of the Group and when comparing
its performance across comparative periods.
Link to strategy
Remuneration linkage
A key measure within the current Long Term
Incentive Plan (LTIP) arrangement with
a weighting of 20% of total opportunity.
Remuneration linkage
A key measure within the current LTIP arrangement
with a weighting of 30% of total opportunity.
* Alternative Performance Measures are described in Note 3 to the consolidated financial statements.
20
Ibstock Plc | Annual Report and Accounts 2023
Non-financial KPIs
Lost time injury
frequency rate
2023
2022
2021
2020
2019
1.5
1.4
2.1
2.2
3.4
Description
The number of lost time injuries occurring in
our workplace per one million hours worked.
Why important?
The measure gives a picture of how safe
a workplace is for its workers.
Link to strategy
%
33
32
45
Net promoter
score
2023
2022
2021
2020
2019
Description
As part of our annual satisfaction survey, customers
are asked how likely they are to recommend the
Group to friends and colleagues. Responses are
between zero (unlikely) to 10 (very likely).
The net promoter score (NPS) is derived from
the proportion of our customers scoring nine
or 10 less those scoring six or lower.
39
34
Why important?
It is used as a proxy for gauging our customer’s
overall satisfaction with our products, service
levels and the customer’s loyalty to the brand.
Remuneration linkage
No specific linkage to remuneration structures
at present.
Link to strategy
Remuneration linkage
No specific linkage to remuneration
structures at present.
Carbon reduction
metric
2023
2022
2021
2020
2019
0.145
0.141
0.151
0.160
0.159
Description
Represents the amount of scope 1 and 2
carbon emissions produced per tonne
of finished production.
Why important?
Provides a key measure of our progress against
our carbon reduction targets (see page 46) and
demonstrates our commitment to addressing
our impacts on the environment through the
reduction in our use of energy.
%
Share of revenue
from new products
2023
11.0
2022
2021
2020
2019
Description
Proportion of revenue as defined above generated
from new and sustainable products introduced to
the market within the last five years.
11.7
11.5
13.0
13.0
Why important?
This demonstrates our progress relative
to our new product development goals.
Link to strategy
Link to strategy
Remuneration linkage
Measure in the LTIPs granted between 2021
and 2023 with 10% weighting of opportunity.
Remuneration linkage
Measure in LTIPs granted since 2022
with 5% weighting of opportunity.
Diversity of senior
management
2023
2022
2021
2020
2019
19.0
18.5
27.0
N/A
%
35.0
Description
Percentage of senior leaders who are
women at year end as defined by the
FTSE Women Leaders Review.
Why important?
This measure assesses whether we have
an appropriate balance of women in senior
positions throughout the Group.
Link to strategy
Remuneration linkage
Measure in the LTIPs granted between 2022
and 2023 with 5% weighting of opportunity.
Key to strategy
Sustainable high performance
Market-led innovation
Selective growth
21
Ibstock Plc | Annual Report and Accounts 2023Additional informationGovernanceFinancial StatementsStrategic Report
Principal risks and uncertainties
Risk
The Group’s activities expose it to a variety
of risks that could impact the business
and its strategic objectives. The Board
has established a risk management and
internal control framework that supports
the effective identification, assessment
and mitigation of risk and has completed
a robust assessment of the Company’s
emerging and principal risks as required by
the Code for the year ended 31 December
2023. The assessment includes those risks
that would threaten Ibstock’s strategy,
business model, its future performance,
liquidity, solvency, reputation, and its
people. To support the discharge of these
responsibilities, the Audit Committee
annually reviews the Company’s internal
financial controls (which form a subset
of the broader set of controls) and risk
management system, and considers their
effectiveness. Further information on the
role of the Audit Committee and details
of the Group’s system of internal controls
can be found in the Corporate Governance
Statement on pages 85-86 and 94-98.
Risk management framework
and risk appetite
The Board has overall responsibility
for ensuring that the Group has
an appropriate risk management
framework and procedures encompassing
the nature and level of risk it is willing
to accept to achieve its strategic objectives.
Management is responsible for the effective
design, implementation and operation of
controls and risk mitigation plans.
Our risk management process is designed
to identify and manage, rather than
eliminate, the risk of failure to achieve
Risk management framework
business objectives and to provide
reasonable, but not absolute, assurance
against material misstatement or loss.
Risks are identified by individuals across
our businesses and functions by identifying
what could stop us achieving our objectives
or impact the sustainability of our business
model. Risk owners assess the risk’s likelihood
and impact of these risks against a Group-
wide risk and impact taxonomy that
benchmarks the likelihood and impact
against financial and non-financial criteria.
They also take into account current
mitigating control activities and identifying
where additional actions may be needed
to bring the risk within our risk appetite.
Risk owners bring the results of their
assessment, current status and action
plans to business and functional reviews,
for support, challenge and oversight.
During the year, the Board reviewed and
challenged the Group’s assessment of risks
as presented by management. This was
the final stage in a process that included
the review of the Divisional and functional
registers by senior management prior to
the Executive Leadership Team’s (ELT)
approval of the Group’s principal risks and
uncertainties for presentation to the Audit
Committee and the Board. With recognition
of the nature of our industry, Ibstock has
set a low to medium risk tolerance and has
a robust process to identify any changes to
the risk landscape, agreeing proportionate
further mitigating actions where appropriate.
The Board seeks to ensure appropriate and
proportionate risk management strategies
are in place for all material risks.
Board
Ultimate responsibility
Audit Committee
Review effectiveness
Executive Leadership Team
Concrete
Support functions
Clay
Operational level controls
Day to day activities to manage and identify risk (1st line)
M
a
n
a
g
e
m
e
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t
,
o
v
e
r
s
i
g
h
t
,
I
n
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r
n
a
l
A
u
d
i
t
(
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r
d
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i
n
e
)
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r
e
c
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o
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g
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e
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(
2
n
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)
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a
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R
22
Management operates a ‘three lines of
defence’ structure to its internal controls
(see diagram below). The first line of
defence is operated by management and
covers the day to day risk management
activities of implementing and executing
internal controls. The second line (health
and safety, quality control and other
central functions) works alongside the
risk owners to support the design and
implementation of the controls framework,
whilst the independent third line is operated
by our outsourced Internal Audit provider,
RSM UK Risk Assurance Services LLP (RSM).
The Board is committed to a continual
process of improvement and embedding
of the risk management framework within
the Group. This ensures that the business
identifies both existing and emerging risks
and continues to develop appropriate and
proportionate risk mitigation strategies
and action plans.
Climate change risk
We have an ambition to be the most
sustainable manufacturer of clay
and concrete products in the UK,
and to lead our sector in the disclosure
and transparency around ESG issues.
We have invested significant capital
over the last five years across the Group
contributing to a reduction in the
carbon intensity of our manufacturing
processes. In 2022, we launched our
ESG 2030 Strategy which established
a stretching set of goals to achieve our
ambition of net zero by 2040 (Scope 1
and 2), which is discussed in further
detail on pages 44 to 55.
At the same time, in order to assess
the resilience of our business model,
we have modelled the impact of both
transitional and physical risks of climate
change on the financial performance
and position of the Company under
different climate pathways. Details
of these impacts are disclosed in
the TCFD Statement on page 62.
We consider climate change to be
a principal risk given the Group’s
material commitments with regard
to its ESG 2030 Strategy and target
to be a net zero operation (Scope 1
and 2) by 2040. This carries significant
reputational risk and is a material focus
for the Group. Details on transitional
and physical risks and opportunities
related to climate change are detailed
in the TCFD report on pages 62 and 63.
To date these are not considered
principal risks in their own right.
Ibstock Plc | Annual Report and Accounts 2023
Principal risks
and uncertainties
Our principal risks are identified and
managed in the same way as other risks.
Principal risks are owned by at least one
member of the ELT and subject to a review
at an ELT meeting at least once each year,
before a review by the Board or relevant
Board Committee. A principal risk and
uncertainty is one that is currently
impacting the Group or could impact
the Group over the next 12 months.
Our principal risks are not an exhaustive
list of all risks facing the Group but are a
snapshot as at 31 December 2023. All risks
carry equal importance and weighting for
the Board. However, additional focus and
priority may be given to specific risks for a
period of time in certain circumstances.
We have reviewed our principal risks over
the course of the year and have updated
them to reflect changes to the external
environment and our strategy and plans.
The full list of what the Board considers
to be those current principal risks and
uncertainties facing the Group can be
found from page 24. Our disclosure for
each principal risk includes the mitigating
actions for each and, where applicable,
updates on any change in the profile
during the past year.
The principal risks and uncertainties should
be read in conjunction with the Strategic
Report as a whole from page 02. The
Board is mindful that additional risks
and uncertainties of which Ibstock is
not currently aware or are believed not
to be significant may also adversely
affect strategy, business performance
or financial condition in the future.
Improvements made during 2023
During this year, we have increased the
maturity of our risk management system
by reporting a probability and impact
assessment of all our risks. This assessment
was completed both before and after
any mitigation actions, with mitigations
reducing both the likelihood and impact
of all risks. We commit to monitor any
trends in these risks and uncertainties
going forwards.
Probability and impact assessment of Ibstock’s risks
5
4
2
11
10
9
8
1
7
3
6
5
4
t
c
a
p
m
I
3
2
1
1
2
3
Probability
4
5
Residual risk rating (after consideration of mitigating controls)
1 Business continuity
6 Economic conditions
9 Climate change
2 Regulatory and compliance
7 Financial risk management
10 Anticipating product
3 People and talent management
4 Cyber and information systems
5 Health, safety and environment
8 Maintaining customer
relationships and
market reputation
demand and innovation
11 Major project delivery
Changes in our principal risks
We continue to review our principal risks
and how we manage them and we have
reviewed our risks in light of changes to
the internal and external environment,
resulting in the following refinements
in description.
Previous Risk Title
Material operational
disruption
Market uncertainty
Anticipating
product demand
Cyber and
information security
New Risk Title
Business
continuity
Economic conditions
Anticipating
product demand
and innovation
Cyber and
information systems
New and retired risks
Careful consideration has been given
to the creation of a specific principal
risk with regard to Health, Safety and
Environment (HSE), which has previously
been nested within the Regulatory and
Compliance risk, given the importance
and management focus within Ibstock
and also the wider industry.
The principal risk with regard to product
quality has been included as a component
of maintaining customer relationships,
recognising its integral part of this risk, and
management of, and is, therefore removed
as a specific principal risk in its own right.
Emerging risks
We continue to review additional
emerging risks that could significantly
impact or challenge our current strategy
and business model and these will be
considered by the Board in 2024. Any
emerging risks identified have been
recorded and are being managed and
monitored alongside our existing risks.
Examples of emerging risks that were
considered during the year included
the following:
• Geopolitical environment – Whilst Ibstock
is a UK business, increased global
geo-political tensions increase levels
of macroeconomic uncertainty, the
effects of which have been experienced
throughout the UK and have an impact on
the Group’s operations, including the cost
and availability of electricity and natural
gas. We continue to be mindful of changes
in the geopolitical environment, and seek to
mitigate potential impact where possible.
• Product substitution and the digital
agenda were emerging risks last year.
We have now incorporated these into
the anticipating product demand and
innovation, and maintaining customer
relationships risks.
23
Ibstock Plc | Annual Report and Accounts 2023Additional informationGovernanceFinancial StatementsStrategic Report Principal risks and uncertainties continued
Business Continuity
Risk Level Medium
Owner Managing Director – Clay & Concrete
How it aligns to our strategy Underlying all priorities
Link to Business Model Extraction, Manufacturing, Distribution
Risk Description
The Group could experience significant disruption as
a result of an unexpected event due to climate change,
a global pandemic, activist action or disruption to UK
infrastructure which impacts one or more of the Group’s
or its key supplier’s facilities, which affects the Group’s
ability to manufacture and sell products and therefore
meet customer demand.
Response/Mitigation
• The Group has business continuity plans which include
IT disaster recovery and crisis management, which
are periodically tested
• Development of climate resilience plans for higher-risk facilities
• Risk-based approach to supplier due diligence
• Physical security measures at all sites
Regulatory and Compliance
Risk Level Low
Owner Group Company Secretary & ESG Director
How it aligns to our strategy Underlying all priorities
Link to Business Model All
Risk Description
Non-compliance by the Group with legal or regulatory
requirements in the markets we operate in (for example,
GDPR, anti-bribery and corruption, the Building Safety Act
and tax legislation).
Response/Mitigation
• Monitoring of the laws and regulations across relevant
markets to ensure Ibstock remains compliant and is
prepared for the implementation of new requirements
• Alignment of Group-wide policies and procedures
This could expose the Group to financial penalties
and reputational damage.
with training on mandatory topics and
compliance requirements
People and Talent Management
Risk Level Medium
Owner Group People Director
How it aligns to our strategy Underlying all priorities
Link to Business Model All
Risk Description
An inability to attract, retain and develop people would
impact the delivery of the Group’s strategic objectives.
This may be compounded by the ageing demographic
in key employee groups, the dependency on specialist
technical knowledge and skills in certain roles or enterprise
restructuring programmes.
Response/Mitigation
• Launch of ‘Fire Up’ cultural programme
• Company-wide people programmes covering succession
planning, apprenticeships, people training and development
and high potential employees
• Hybrid working model for office based employees
• Focused action plans as a result of the 2023 employee
opinion survey
Cyber and Information Systems
Risk Level Medium
Owner CFO
How it aligns to our strategy Underlying all priorities
Link to Business Model Manufacturing, Sales, Distribution
Risk Description
Damage caused to the Group, its customers or suppliers
through unauthorised access, manipulation, corruption
or destruction of data or systems, or lack of investment
leading to outdated systems, which could impact
operations or the delivery of strategic objectives.
Response/Mitigation
• Achievement of UK Government’s Cyber Essentials
Plus accreditation
• IT disaster recovery plan
• Regular reviews to reduce the risk of successful cyber attacks,
including vulnerability and penetration tests by third parties
• Cyber security training and awareness programme
• Continued investment in technology systems
24
Ibstock Plc | Annual Report and Accounts 2023 Health, Safety and Environment (HSE)
Risk Level Medium
Owner CEO
How it aligns to our strategy Underlying all priorities
Link to Business Model Extraction, Manufacturing, Distribution
Risk Description
Failure to provide a place of work which minimises
the risk of harm to our employees, those who work
with us, and the environment and thereby risk HSE
compliance breaches.
Response/Mitigation
• Dedicated internal Safety, Health, Environment & Quality
(SHEQ) team supporting operational delivery of HSE
management and leadership
• Appropriate health, safety and environment policies to ensure
compliance with all relevant regulations and requirements
combined with regular monitoring through internal and
external auditing activity
• Six Health and Safety Rules introduced to use as a guide
to drive behaviour on a daily basis
• Investment in safe systems and facilities to protect
our employees
Economic Conditions
Risk Level Medium
Owner CEO
How it aligns to our strategy Sustainable performance
Link to Business Model Extraction, Manufacturing, Distribution
Risk Description
Changes in the UK macroeconomic environment or
Government housing policy could negatively impact
demand as consumer confidence and affordability affects
our customers, resulting in reduced sales volumes.
Response/Mitigation
• Monitoring of market and economic trend and forecast
information at the Board, Executive and Divisional leadership
level which informs planning and financial forecasting
• Flexibility to adjust capacity and cost base across the Group
• Disciplined capital allocation framework and strong balance
sheet position
Financial Risk Management
Risk Level Medium
Owner CFO
How it aligns to our strategy Sustainable performance
Link to Business Model Procurement, Sales
Risk Description
The Group is exposed to a number of financial risks, both
macroeconomic in nature (e.g. foreign currency, interest
rates, general inflation) and more specific to the Group,
including liquidity and credit risk, as well as volatility in
the wholesale energy and carbon markets.
Exposure to these risks could lead to increased costs
of business operations, financial loss or reduced ability
to access funding.
Response/Mitigation
• Internal control framework is designed to reduce financial
reporting risks
• Development, review and communication of a Group-wide
treasury policy which is designed to reduce residual risk with
regard to foreign exchange and interest rates
• Constant monitoring of energy and carbon markets and
forward purchase to mitigate market volatility
• Stress testing the Group’s available financing facilities
to ensure resilience
• Operation of appropriate and dynamic sales pricing strategies
to remain competitive and pass on significant increases
in input costs
25
Ibstock Plc | Annual Report and Accounts 2023Additional informationGovernanceFinancial StatementsStrategic Report Principal risks and uncertainties continued
Maintaining Customer Relationships and Market Reputation
Risk Level Medium
Owner Managing Director – Clay & Concrete
How it aligns to our strategy Sustainable performance
Link to Business Model Sales, Product Design, Manufacturing
Risk Description
Not meeting customers’ needs and expectations (e.g.
service levels, product quality and digital capability) could
cause the loss of a key customer, resulting in a significant
loss of revenue, with the Group generating revenues from
a relatively concentrated customer base.
Response/Mitigation
• Organisational structure enables us to understand and respond
more effectively to the evolving needs of our customers, with
Divisional and regional teams providing customer support
• Sales and production are highly integrated and also
supported by design support and technical teams
• Net promoter score (NPS) surveys routinely conducted
to understand and respond to customer requirements
Climate Change
Risk Level Medium
Owner Group Company Secretary & ESG Director
How it aligns to our strategy Sustainable performance
Link to Business Model Sales, Manufacturing, Procurement
Risk Description
If the Group does not adapt the business to achieve our
ESG commitments and climate change regulations and
well as mitigating climate change related transitional
and physical risks, this could result in failure to meet
customer and stakeholder expectations.
Transition risks include increasing regulatory requirements and
changes in customer preferences impacted product demand.
A detailed assessment of climate-related risks and opportunities
is provided in our TCFD disclosure/sustainability section.
Response/Mitigation
• The ESG Committee oversees ESG Strategy and business
response to climate change risks
• Clear ESG Strategy and transition plan with KPIs published
to track progress
• Transitional and physical climate risks and opportunities
being embedded in day to day business operations
• Continued investment to enhance operations and develop
products which are more sustainable
Anticipating Product Demand and Innovation
Risk Level Medium
Owner CEO
How it aligns to our strategy Innovate
Link to Business Model Manufacturing, Sales, Product Design
Risk Description
Failure to identify and respond to opportunities, threats and
emerging market trends in the construction sector through an
inability to innovate, develop and implement new products
and solutions which respond to the market, resulting in
reduced sales volumes and loss of market position.
Response/Mitigation
• Dedicated Futures business set up to focus on construction
mega trends of industrialisation and sustainability
• Innovation culture embedded through organisation design,
including experienced product managers encompassing
horizon scanning and monitoring and reporting on emerging
market trends
Major Project Delivery
Risk Level Medium
Owner CEO and CFO
How it aligns to our strategy Growth
Link to Business Model Manufacturing, Product Design
Risk Description
Failure to deliver major projects e.g. Atlas and Nostell to time,
cost and capability, could result in reputational damage,
financial overspends and commercial penalties.
Response/Mitigation
• Clear and robust project management encompassing
monitoring and reporting to ensure projects remain on track
• Group-wide project governance process and procedures
26
Ibstock Plc | Annual Report and Accounts 2023 Ibstock Clay Operations Review
Ibstock Clay
Ibstock Clay is the leading clay brick manufacturer
in the UK, with an extensive product range, and
14 manufacturing sites across the country, strategically
located near to extensive self-owned clay reserves.
As well as being the UK’s largest
brick supplier, the Clay Division also
manufactures special brick shapes and
bespoke products, including arches,
chimneys and cladding solutions out of
four sites in the UK, through its Ibstock
Kevington business. The Division is a
significant supplier to the new-build
housing sector, the repair, maintenance
and improvement (RMI) market through
builders’ merchants and the specification
sector through a number of our direct
distribution channels. The Clay Division
performance includes Ibstock Futures.
More detail about Ibstock Futures is
given on page 31.
Ibstock Clay product categories
BRICKS AND
MASONRY
FAÇADE
SYSTEMS
2023 performance
A good operational performance
supported a solid result from the Clay
Division, with this outcome underpinned
by consistent network reliability and an
intense focus on cost management.
During 2023, the Clay Division achieved
sales of £292 million which was 26%
lower than 2022 (£369 million). This
was driven by materially lower sales
volumes. Sales volumes during 2023
were in line with the trend experienced
across the broader domestic market.
As a consequence of this lower demand,
inventory was built at higher-than-typical
levels providing a benefit to margins
through higher fixed cost absorption.
This inventory investment ensures that
we are well positioned for increased
demand when the market recovers.
2023 Divisional Results
Revenue:
£292m
2022: £369m
Adjusted EBITDA*:
£99m
2022: £127m
Statutory profit before tax:
£38m
2022: £105m
The Clay Division included £12 million
(2022: £4 million) of revenue relating to
the Ibstock Futures business, reflecting
growth in our acquired businesses.
The Division recognised £5 million of
operational investment in research and
development, building in-house innovation
and commercial capability as we continue
to scale the business.
Read more about Futures on page 31
27
Operators at our Chesterton SiteIbstock Plc | Annual Report and Accounts 2023Additional informationGovernanceFinancial StatementsStrategic Report Ibstock Clay Operations Review continued
The Division experienced meaningful
cost inflation compared to 2022 in
both variable and fixed cost categories.
Variable costs increases, included the
impact of energy hedges entered into
in the prior year, although softer spot
prices during the first half helped to
limit the scale of this increase. We
now have around 70% of 2024 energy
requirements covered at prices broadly
in line with the comparative period.
Cost and capacity management was a
major focus this year, with a comprehensive
operational review completed to reduce fixed
cost and align capacity to near-term market
demand. This review resulted in permanent
closure of two brick factories at Ravenhead
and South Holmwood, and two specials sites
at Gloucester and Hampshire. Ravenhead
and South Holmwood are currently being
decommissioned and we are exploring
alternative options for the sites alongside
disposal opportunities. A range of further
steps to rationalise near-term capacity and
cost across the Division were implemented
during the second half of the year.
Sustainable high performance
During 2023, brick imports reduced at
a faster rate than domestic supply to
20% of total market (2022: 24%), as
the UK industry was able to displace
imported product. Our ability to fulfil
this demand was supported by our
available capacity and strengthened
inventory position. Our EBITDA margin
was marginally below the prior year as
the impact of materially lower sales were
largely mitigated by effective costs and
capacity management action.
The Division retained its focus on strong
commercial execution and providing high
standards of service for our customers.
Our On-Time, In-Full (OTIF) service levels
continued to improve, and our enhanced
scheduling capabilities supported a
reduction in customer cancellation rates.
Throughout the year, the Division continued
its long-term programme to dispose of
surplus assets which contributed c.£2 million
to EBITDA during 2023.
Health, Safety and Wellbeing
We remain committed to driving our
business to zero harm for everyone.
During 2023, 12 clay factories did not have
a single Lost Time Incident (LTI). This was
achieved through continued focus on our six
safety rules as well as successful employee
engagement events such as Safe Start days.
28
The Division received several external
industry awards, including the ‘Award of
Excellence for outstanding contribution
to Health and Safety across the industry’
from the Ceramics UK (formerly known as
the British Ceramic Confederation (BCC)).
During 2023, over 109 Site Managers
were trained in managing mental health
conversations and an additional 12 have
taken on Mental Health Ally responsibilities
as part of their roles.
Market-led innovation
During 2023, to strengthen our proposition
targeted at displacing imported products,
we launched a number of higher-end
speciality bricks, including the new ‘Rosa
Blanca’ range, which has received a very
positive reaction from customers.
The new Rosa Blanca brick not only
strengthens our commitment to innovation
and new product development, but it
strengthens our existing range of
beautiful, British-made bricks.
Selective growth
Commissioning of the new Atlas brick
factory in the West Midlands commenced
on schedule at the end of this year, with
production expected to ramp up over
the first half of 2024, in line with market
conditions. Atlas will produce the UK’s first
externally verified carbon neutral brick and
will increase annual network capacity by
over 100 million bricks to support the
Group’s long-term growth objectives.
We also made significant investments
in our Aldridge site as well a replacing
the kiln at our Parkhouse site.
ESG
Performance
During 2023, we produced our first
Environmental Product Declaration
(EPD) with a roll-out plan to produce
these for all our products by the end
of 2024. The EPDs will help us to
demonstrate to customers how we
can support their net zero journeys
as well as supporting our prioritisation
of carbon saving projects.
The Division has also undertaken
numerous projects, trials and
research to support our ESG targets.
These include:
• a pilot project to fire bricks using
synthetic gas derived from waste
as an alternative low carbon fuel
• investment in our Laybrook factory
to reduce site carbon emissions
by more than 15%
• increasing brick voids to reduce
the use of virgin materials
• 300k bricks donated to schools
and colleges to address sector
skills shortages
• EcoHabitat talks to share the
specification details with
Bricklaying students to prepare
them to support house builders
to build biodiversity into homes
of the future
Read more – Pages 44 to 55
Operators at our Chesterton SiteIbstock Plc | Annual Report and Accounts 2023 Ibstock Concrete Operations Review
Ibstock Concrete
Ibstock Concrete is one of the largest specialist
manufacturers of concrete construction products
in the UK, occupying strong positions in the
new-build housing, repair, maintenance and
improvement (RMI) and infrastructure markets.
Ibstock Concrete consists of five well-
established and strong brands: Forticrete,
Supreme, Anderton, Longley and Coltman.
The business is organised into six product
groups: Roofing, Flooring and Lintels,
Staircases and Lift Shafts, Fencing and
Landscaping, Retaining Walls and Rail
and Infrastructure.
Ibstock Concrete operates across
13 manufacturing sites geographically
spread across the UK.
2023 performance
Despite the challenging market, the
breadth of the Concrete Division’s
end-market exposure supported the
delivery of a good performance
during 2023.
During 2023, the Concrete Division
achieved reported sales of £114 million
which was 21% lower than 2022
(£144 million), reflecting a material
decline in sales volumes within our
residential product categories.
A strong performance from the Rail
and Infrastructure category and good
operational performance across the
Divisional factory network helped mitigate
the impact of lower residential sales on
the Division’s financial performance.
2023 Divisional Results
Revenue:
£114m
2022: £144m
Adjusted EBITDA*:
£19m
2022: £24m
Statutory profit before tax:
£5m
2022: £12m
Ibstock Concrete product categories
ROOFING
FLOORING
AND LINTELS
STAIRCASES AND
LIFT SHAFTS
FENCING AND
LANDSCAPING
RETAINING
WALLS
RAIL AND
INFRASTRUCTURE
29
Precast staircaseIbstock Plc | Annual Report and Accounts 2023Additional informationGovernanceFinancial StatementsStrategic Report Ibstock Concrete Operations Review continued
Within the Division, our operational
excellence programme focused on cost
and capacity, with a comprehensive
operational review completed to
increase process efficiency, automate
and reduce fixed costs, flexing capacity
to near-term market demand. This review
resulted in the permanent closure of two
concrete factories, relocating activity at
our Masoncrete factory to Cebastone,
and Castle Dawson in Northern Ireland
to Coltman. A range of further steps
to rationalise near-term functional
capacity and cost across the Division
were also introduced.
We continue to develop our Bespoke
Precast Infrastructure business, which
delivered strong progress by increasing
its offerings into new markets such as
solar, utilities and the water industry.
Health, Safety and Wellbeing
We remain focused on developing
our positive, proactive health, safety
and wellbeing culture underpinned
by a belief that driving proactive
improvement every day will continue
to reduce risk in our operations.
During 2023, our Concrete estate achieved
a 32% reduction in minor incidents versus
2022. This was achieved through continued
focus on our six safety rules, proactive
improvement and investment along with
employee engagement events such as safety
stand down periods, Safe Start training
and our behavioural safety roadshow.
During 2023, over 52 Divisional managers
were trained in managing mental health
conversations and an additional 7 have
taken on Mental Health Ally responsibilities
as part of their roles.
Market-led innovation
During 2023, we rolled out our professional
range of residential landscaping products,
which offer increased functionality and
industry-leading levels of embodied carbon.
Within our rail and infrastructure category,
our range of lower-carbon cable troughing
products has enabled us to win new business
serving the major HS2 infrastructure project.
Selective growth
During the year, the Division completed
two acquisitions.
G-Tech – The first was a small bolt-on
asset acquisition in our infrastructure
business, acquiring the trade and assets
of G-Tech, an innovative designer and
supplier of concrete railway platform
solutions, to expand our differentiated
proposition in the railway infrastructure
30
ESG
Performance
During 2023, we developed our first
Environmental Product Declaration
(EPD) which will be produced for all
our products over the near term.
The EPDs are helping us to show
customers how we can support their net
zero journeys as well as supporting our
prioritisation of carbon-saving projects.
The Division has also undertaken
numerous projects, trials and research to
support our ESG targets. These include:
• SL8 and Gemini roof tiles – our
lowest embodied carbon roof tiles
• Trial of hot weather PPE as part of
our climate adaptation measures
• Installation of a rainwater
harvesting system at Northwich
to reduce our mains water usage
• Raising funds, and matching them,
through employee-led events such
as a Charity Football Tournament
• Sites building relationships with
local schools and colleges
• Isabella Walsh (Process Engineering
Apprentice) being awarded
Regional Apprentice of the Year
in the Made UK awards
• Winning a prestigious sustainability
award at the Siemens Mobility
Awards in Munich for the
development of an innovative
sustainable Signal Base solution.
Read more – Pages 44 to 55
market. G-Tech’s concrete platform
copers reduce embodied carbon of the
material mix by almost 80%, compared
with typical reductions of 30-40% achieved
by competing solutions. The acquisition
represents a further strategic step in
broadening our rail and infrastructure offering.
Coltman – On 30 November 2023,
Ibstock acquired Coltman Precast
Concrete (Coltman). Coltman
manufactures hollowcore, staircases
and landings with flexibility to produce a
wider range of pre-stressed and pre-cast
products. The acquisition will strengthen
Ibstock’s national distribution model
for both lintels and floor beams, widen
our customer base, as well as enhance
profit and revenue opportunities.
Our £3 million investment in automated
equipment for our walling stone factory
in Anstone, Yorkshire, is on track and will
be commissioned during the first quarter
of 2024. The fully automated line of
the future will drive significant safety
benefits, increased product quality for
our customers and achieve at least a
c.30% uplift in overall equipment
effectiveness. This is expected to
deliver around £1 million in incremental
adjusted EBITDA* from 2024.
We also have a pipeline of further
fast-payback opportunities to invest
capital in our Concrete business over
the medium term.
Precast lift shaft - Alexandra HospitalIbstock Plc | Annual Report and Accounts 2023 Ibstock Futures Operations Review
Ibstock Futures
Modern methods of construction (MMC) is a significant
area of opportunity for Ibstock which includes off-site
manufacture and assembly, and modular house building.
The focus is initially concentrated within
the mid- to high-rise Façades market and
modular construction segment.
To address this area of opportunity,
the Group has created a growth engine,
Ibstock Futures, which is a business unit
that currently forms part of our
Clay Division.
Ibstock Futures has two objectives:
• To enable Modern Methods of
Construction in the UK; and
• To be at the forefront of sustainable
construction by supporting the growth
of lightweight construction methods
as well as more carbon-efficient ways
of manufacturing.
Ibstock Futures categories
FAÇADE SYSTEMS
2023 performance
Throughout the year, Ibstock Futures has
focused on enhancing its operational and
commercial disciplines. The trading businesses
within Ibstock Futures delivered an adjusted
EBITDA* in line with our expectations.
To scale this business, we invested around
£5 million of operational costs into innovation
and built capability during 2023 (in line
with the level in 2022).
Whilst Ibstock Futures experienced
a more cautious demand backdrop,
in line with the core business, the levels
of market activity proved relatively more
resilient, and we believe that our customers
in this segment value both the financial
strength and industry expertise of
a company such as Ibstock.
31
Employees at Power ParkMechslip being constructed offsiteIbstock Plc | Annual Report and Accounts 2023Additional informationGovernanceFinancial StatementsStrategic Report Ibstock Futures Operations Review continued
ESG
Performance
During the year, Futures were part of
the project to understand the sources
and requirements of our environmental
data to support how we monitor and
report our continual improvement
in performance.
Read more – Pages 44 to 52
We continue to see a strong pipeline
of opportunities to grow Futures,
both organically and by acquisition,
representing a significant opportunity
for value creation as we selectively
expand and diversify our product
offering further over the medium term.
Sustainable high performance
During 2023, we consolidated our new
Futures businesses on a single site at
Power Park, our innovation hub in the
West Midlands. The hub, which saw its
first operations commence during the
year will, over time, become a state-of-
the-art facility. Secured under a long-
term lease, the Innovation Hub creates
a scalable platform for the growth of
Ibstock Futures in the years ahead.
Health, Safety and Wellbeing
Health, safety and wellbeing is a critical
focus for Ibstock Futures.
During 2023, we further integrated Ibstock
Futures health and safety procedures with
those of the Ibstock Group, benefiting
from the Group’s engagement events such
as Safe Start and the Safety Stand down.
Market-led innovation
During 2023, we have continued work on
a number of exciting strategic projects
that remain within the research and
development stages, particularly around
energy and alternative use of clays,
with a circular economy approach.
We also continued to make progress
within our Ibstock Ventures innovation
arm. We have collaborated with start-
ups on technology and new business
models. These include technologies
such as Automation, 3D printing,
Design for Manufacturing & Assembly
(DFMA), and Parametric Architecture.
Selective growth
The brick slips market continues to build,
and our investments in capacity expansion
remain on track. The development of
our Nostell facility, in West Yorkshire, is
progressing well and we expect the first
phase, a new automated slip cutting line,
which will deliver up to 17 million slips per
annum, to commission during the first
half of 2024. The development of the
larger brick slips systems manufacturing
line, which will initially deliver a further
30 million slips per annum, is also well
underway, with equipment orders placed
and contracts with OEMs well progressed.
We intend to match the remaining build
schedule of this factory to market growth
over the next 12 to 18 months. Combined,
this significant growth in slips capacity
will create a strong and diversified position
for Ibstock in this fast-growing and
attractive product category.
32
Employees at Power ParkIbstock Plc | Annual Report and Accounts 2023 Financial Review
The Group remains in a
strong financial position
“Our strong balance sheet, combined with the
inherently cash generative nature of our business,
provides resilience and strategic optionality over
the medium term”
Chris McLeish
Chief Financial Officer
Introduction
The Group delivered a resilient financial
The Group delivered a resilient financial
performance in 2023 against a subdued
market backdrop, with both adjusted
EBITDA* and adjusted earnings per share*
in line with expectations set at the start
of the year. Both revenue and profit were
significantly below the comparative period,
reflecting lower activity levels in our core
residential markets, with the domestic brick
market around 30% below the prior year.
The Group managed the reduction in sales
volumes well, through stable pricing and a
disciplined management of capacity and
costs. This intense focus on commercial
execution and cost management ensured
that adjusted EBITDA* margins remained
strong at 26.5% (2022: 27.2%), despite
a significant fall in activity levels.
Group statutory profit before taxation
of £30.1 million (2022: £104.8 million),
reflected the impact of lower underlying
operating profits and an exceptional
charge* of £30.8 million (2022: credit
of £6.3 million) arising from the Group’s
restructuring plan.
The Group maintained a strong balance
sheet, with closing net debt* of £101 million
at 31 December 2023 representing
leverage* of 1.1 times adjusted EBITDA*
(Dec 2022: 0.4 times). This robust year-end
position was achieved through a resilient
cash flow performance which included
around £66 million of capital expenditure
(including £45 million of growth expenditure)
and a £25 million investment in finished
goods inventories as levels were rebuilt
from lower levels. We also acquired Valerie
Coltman Precast, a business engaged in
the manufacture of precast and prestressed
concrete products, for cash consideration
33
Ibstock Plc | Annual Report and Accounts 2023Additional informationGovernanceFinancial StatementsStrategic Report Financial Review continued
Group results
The table below sets out segmental revenue and adjusted EBITDA* for the year
Year ended 31 December 2023
Total revenue
Adjusted EBITDA*
Margin
Profit/(loss) before tax
Year ended 31 December 2022
Total revenue
Adjusted EBITDA*
Margin
Profit/(loss) before tax
Clay £m
292.2
98.8
33.8%
37.9
369.2
126.7
34.3%
104.9
Concrete £m
Central costs £m
113.6
18.6
16.4%
5.0
143.7
23.6
16.4%
12.5
–
(10.1)
(12.9)
–
(10.6)
(12.7)
Total £m
405.8
107.4
26.5%
30.1
512.9
139.7
27.2%
104.8
* Alternative Performance Measures are described in Note 3 to the results announcement. Due to rounding, numbers
presented may not add up precisely to the totals provided and percentages may not precisely reflect the absolute figures.
of £3 million. At 31 December 2023,
the Group had £100 million of undrawn
committed facilities in place.
With our robust financial position, and
inherently cash generative business, we
continue to expect to generate significant
cash to support growth and shareholder
returns over the medium-term.
Climate Change & CFD
As a long-term, energy intensive business,
a commitment to environmental
sustainability and social progress is central
to the company’s purpose. In 2022 we
launched the Group’s ESG 2030 Strategy
and remain committed to this approach.
This strategy provides the framework for
actions across the three key areas that the
Group needs to focus on:
• Addressing climate change;
• Improving lives; and,
• Manufacturing materials for life.
At the same time, we have considered
the impact of both transition and physical
risks of climate change on the financial
performance and position of the Company,
through our viability scenario assessment,
our impairment testing and assessment of
the useful economic lives of our assets and
also our assessment the resilience of our
business model, as part of our strategic
planning process. The outputs from this
exercise are detailed in our TCFD disclosures
in the 2023 Annual Report and Accounts.
The Group continues to be committed
to increasing the transparency of
reporting around climate impacts,
risks, and opportunities. This year we
have enhanced our disclosure to ensure
full compliance with the recommendations
of the Task Force for Climate-related
Financial Disclosures (TCFD) and those of
Climate-related Financial Disclosure (CFD).
34
Alternative performance measures
This results statement contains alternative
performance measures (APMs) to aid
comparability and further understanding
of the financial performance of the Group
between periods. A description of each
APM is included in Note 3 to the financial
statements. The APMs represent measures
used by management and the Board to
monitor performance against budget, and
certain APMs are used in the remuneration
of management and Executive Directors.
It is not believed that APMs are a substitute
for, or superior to, statutory measures.
Revenue
Group revenues for the 2023 year
decreased by 21% to £405.8 million
(2022: £512.9 million), reflecting
significantly lower activity levels in our
core residential markets. Sales volumes
in our residential product categories
reduced in line with the broader domestic
market, which was down by around 30%
compared to the prior year, with selling
prices remaining stable through the year.
In our Clay Division, revenues of
£292.2 million represented a reduction of
21% on the prior year (2022: £369.2 million).
Volumes reduced in line with the overall
domestic brick market. Year-on-year average
selling prices increased, following action
to increase prices taken during the second
half of the 2022 year. Our Futures business
grew revenues to £12 million (2022: £4 million).
In our Concrete Division, revenue
decreased by 21% year-on-year to
£113.6 million (2022: £143.7 million),
reflecting a material decline in sales
volumes within our residential product
categories. Our infrastructure business,
which is focused on a number of attractive
niche markets, delivered a strong performance,
growing revenues to around £19 million
(2022: £17 million).
Adjusted EBITDA*
Management measures the Group’s
operating performance using adjusted
EBITDA*. Adjusted EBITDA* decreased
year on year to £107.4 million in 2023
(2022: £139.7 million) reflecting significantly
lower activity levels in our core residential
markets, mitigated by strong commercial
execution and the disciplined management
of capacity and cost.
Performance also benefited from the
absorption of around £15 million of fixed
cost into finished goods inventories, which
increased during the year as the Group
built back finished goods stocks from lower
levels. Adjusted EBITDA* margins remained
strong at 26.5%, marginally below the
prior year (2022: 27.2%) as a strong focus
on commercial and operational execution
largely offset the impact of materially
lower sales volumes.
Within the Clay Division, adjusted EBITDA*
totalled £98.8 million (2022: £126.7 million),
representing an adjusted EBITDA* margin
of 33.8% (2022: 34.3%). The reduction
in adjusted EBITDA* reflected significantly
lower activity levels in our residential
markets offset by resilient contribution
margin performance and disciplined
and decisive cost management.
The division also benefited from property
gains totalling around £2 million in the
year. In line with our expectations, the
division recognised a cost of £5.0 million
(2022: £5.3 million) in Ibstock Futures,
as the business continued to invest
in research & development, in-house
innovation and commercial capability.
Adjusted EBITDA* in our Concrete
Division decreased to £18.6 million
(2022: £23.6 million). Whilst the division
experienced a significant decline in
demand within its residential product
categories, adjusted EBITDA* margins
were maintained at 16.4% (2022: 16.4%).
This performance was achieved through
significant action on cost and a strong
performance from infrastructure, which
achieved margins in excess of the
divisional average on volumes broadly
in line with the comparative period.
The division also benefited from inventory
build, which led to the absorption of
around £2 million of fixed cost during
the 2023 year.
Central costs decreased to £10.1 million
(2022: £10.6 million) reflecting discretionary
cost reduction action and lower variable
remuneration costs.
Ibstock Plc | Annual Report and Accounts 2023
Exceptional items*
Based on the application of our accounting
policy for exceptional items*, certain
income and expense items have been
excluded in arriving at adjusted EBITDA*
to aid shareholders’ understanding of the
Group’s underlying financial performance.
The amounts classified as exceptional* in
the period totalled a cost of £30.8 million
(2022: £6.3 million gain), comprising:
1. Exceptional cash cost of £10.2 million
(of which £4.6 million was cash settled
in the period), associated with the
Group’s rationalisation and closure of
sites as part of the restructuring plan
2. An exceptional non-cash charge of
£20.6 million comprising the impairments
associated with the Group’s closure of
sites as part of this plan.
The Group expects to recognise additional
cash costs of around £5 million over the
next 12 months on final closure and
decommissioning costs as part of our
single coordinated plan for our site
closures. These costs have not been
accounted for in the 2023 results since
the Group was not committed to this
specific expenditure at year-end and
so no provision could be recognised.
Further details of exceptional items* are set
out in Note 5 of the financial statements.
Finance costs
Net cash interest paid of £5.8 million was
slightly above the prior year (2022: £4.3 million)
due to higher levels of average debt.
The Group continued to benefit from its
£100 million private placement at a fixed
coupon of 2.19% per annum, and drew
down amounts under its variable rate
Revolving Credit Facility (RCF) towards the
latter part of the year. For the 2024 year,
we expect net cash interest expense to be
around £8 million.
Statutory net finance costs of £5.0 million
increased in the year (2022: £2.7 million)
principally reflecting reduced interest
income from the Group’s main defined
benefit pension scheme and increased
interest expense following utilisation of
the Group’s RCF.
Profit before taxation
Depreciation and amortisation pre fair
value uplift increased to £29 million
(2022: £26 million) due to charges related
to new haulage assets and the Futures
innovation hub in the West Midlands.
We expect depreciation and amortisation
pre fair value uplift to total around
£34 million in 2024, reflecting incremental
depreciation from the Atlas and Nostell
factories and a full year of the Futures
innovation hub lease cost.
Group statutory profit before taxation
of £30.1 million (2022: £104.8 million),
reflected the impact of lower underlying
operating profits and an exceptional
charge* of £30.8 million (2022: credit
of £6.3 million) arising from the Group’s
restructuring plan.
Taxation
The Group recognised a taxation charge
of £9.0 million (2022: £17.9 million)
on Group pre-tax profits of £30.1 million
(2022: £104.8 million), resulting in
an effective tax rate (ETR) of 30.0%
(2022: 17.1%) compared with the average
standard rate of UK corporation tax of
23.5%. The lower statutory tax charge
arose from the significant reduction in
taxable profits. The ETR increased as a
result of the increase in standard rate of
UK corporation tax, which impacted both
current and deferred taxation as well as
a reduction in the permanent benefit
arising from the UK tax super deduction.
The adjusted ETR* (excluding the impact
of the deferred tax rate change and
exceptional items) for the 2023 year
was 24.6% (2022: 16.5%). The increase
in adjusted ETR from the prior year was
due to the increase in the standard rate
of UK corporation tax and a reduction
in permanent benefit arising from the
super deduction which, until March 2023,
provided statutory tax relief on 130%
of qualifying capital expenditure. For the
2024 year, we expect the adjusted ETR
to increase to around 26%, reflecting a
full year of corporation tax at 25% and
normal levels of non-deductible expenses.
Earnings per share
Group statutory basic earnings per share
(EPS) decreased to 5.4 pence in the year to
31 December 2023 (2022: 21.6 pence) as
a result of the Group’s reduced profit after
taxation, reflecting the reduced trading
result and exceptional costs arising from
our 2023 restructuring plan.
Group adjusted basic EPS* of 13.9 pence
per share reduced from 22.7 pence in
the prior year, reflecting: a decrease
in adjusted EBITDA*; an increase in the
underlying depreciation charge from
recent capital investment projects and
leases; and a higher adjusted ETR following
an increase in the headline UK corporation
tax rate. In line with prior years, our
adjusted EPS* metric removes the impact
of exceptional items*, the fair value uplifts
resulting from our acquisition accounting
and non-cash interest impacts, net of the
related taxation charges/credits. Adjusted
EPS* has been included to provide a clearer
guide as to the underlying earnings
performance of the Group. A full
reconciliation of our adjusted EPS*
measure is included in Note 7.
Table 1: Earnings per share
Statutory basic EPS
Adjusted basic EPS*
2023
pence
5.4
13.9
2022
pence
21.6
22.7
Cash flow and net debt*
Adjusted operating cash flow
decreased by £58 million to £50.0 million
(2022: 108.0 million), reflecting a reduction
in adjusted EBITDA* from significantly
lower activity levels in our core residential
markets. The Group also increased
working capital levels by £37.0 million
(2022: £1.8 million increase) as finished
goods inventories were built back from
lower levels.
Net interest paid in 2023 increased to
£5.8 million (2022: £4.3 million) reflecting
an increased interest cost as the Group
drew down on its bank facilities during the
latter part of the year. Cash tax amounted
to a small inflow of £0.6 million (2022:
payment of £11.7 million), as taxable
profit decreased from the prior year and
the Group continued to benefit from the
accelerated tax deduction on qualifying
capital expenditure. Other cash outflows of
£14.9 million (2022: £12.1 million outflow)
included £1.8 million in respect of carbon
emission credits purchased during the year
(2022: £5.6 million), Coltman consideration
of £2.7 million and lease payments
totalling £10.0 million (2022: £8.0 million).
The Cash conversion* percentage
decreased to 47% (2022: 77%), reflecting
a material reduction in adjusted EBITDA*
and the investment in working capital
as finished goods inventories increased
during the year.
Adjusted free cash flow* decreased
significantly to an outflow of £15.6 million
(2022: inflow of £49.7 million). Capital
expenditure of £65.7 million increased
by £7.3 million on 2022 (£58.4 million),
reflecting the Group’s continued investment
in its organic growth projects to support our
medium-term growth objectives. The 2023
capital expenditure figure comprised around
£21 million of sustaining expenditure,
35
Ibstock Plc | Annual Report and Accounts 2023Additional informationGovernanceFinancial StatementsStrategic Report Financial Review continued
£29 million on the Atlas and Aldridge
redevelopments, £11 million on the slips
project at Nostell (as we managed the
pace of capital deployment on the
larger slips systems factory) and around
£5 million on other growth projects.
In the 2024 year, sustaining expenditure is
expected to remain at around £20 million,
with growth investments in Atlas, Aldridge
and Futures expected to total £25 million
to £30 million.
Table 2: Cash flow (non-statutory)
Adjusted EBITDA*
Adjusted change in
working capital*
Net interest
Tax
Post-employment
benefits
Other1
Adjusted operating
cash flow*
Cash conversion*
Total capex
Adjusted free
cash flow*
2023
£m
2022
£m
Change
£m
107.4
139.7
(32.3)
(37.0)
(5.8)
0.6
(1.8)
(4.3)
(11.7)
(35.2)
(1.5)
12.3
(0.3)
(14.9)
(1.8)
(12.1)
1.5
(2.7)
50.0
47%
(65.7)
108.0
(58.0)
77% +30ppts
(7.3)
(58.4)
(15.6)
49.7
(65.3)
* Alternative Performance Measures are described
in Note 3 to the consolidated financial statements.
1 Other includes operating lease payments and
emission allowance purchases in all years, and
Coltman consideration in 2023.
The table above excludes cash flows
relating to exceptional items* in both
years. During 2023, the Group incurred
£4.6 million of exceptional cash costs
relating to the Group’s rationalisation and
closure of sites (2022: £7.8 million inflow).
Net debt* (borrowings less cash) at
31 December 2023 totalled £100.6 million
(31 December 2022: £45.9 million;
30 June 2023: £89.1 million). The movement
during the 2023 year reflected the investment
of £37.0 million in working capital and
£65.7 million of capital expenditure.
At 31 December 2023, the Group had
drawn £25 million under its Revolving
Credit Facility (RCF), and had £100 million
of undrawn committed facilities in place.
The present value of lease liabilities
increased to around £44 million
(2023: £33 million) due principally to
the long-term property lease entered
into during the year for the Futures
innovation hub in the West Midlands
Return on capital employed*
Return on capital employed* (ROCE) in
2023 reduced to 13.4% (2022: 23.4%).
The reduction reflected both a decrease
in adjusted operating profit and an
increase in the capital base, as the
Group invested in both working capital
and growth investments to support
our medium-term growth objectives.
Capital allocation
The Group’s capital allocation framework
remains consistent with that laid out
in 2020, with the Group focused on
allocating capital in a disciplined and
dynamic way.
Our capital allocation framework is set
out below:
• Firstly, we will prioritise investment
to maintain and enhance our existing
asset base and operations;
• We are focused on a progressive
ordinary dividend, with targeted cover
of approximately 2 times underlying
earnings through the cycle;
• Thereafter, we will deploy capital
for growth, both inorganically and
organically, in accordance with our
strategic and financial investment criteria;
• And, finally, we will return surplus capital
to shareholders.
Our framework remains underpinned by
our commitment to maintaining a strong
balance sheet, and we will look to maintain
leverage at between 0.5 and 1.5 times net
debt* to adjusted EBITDA* excluding the
impact of IFRS 16, through the cycle.
Dividend
The Board has recommended a
final dividend of 3.6p per share
(2022: 5.5p), for payment on 31 May
2024 to shareholders on the register
on 10 May 2024. This will bring the
full year dividend to 7.0p (2022: 8.8p),
a pay-out of 50% of adjusted basic
earnings per share, consistent with our
stated capital allocation framework.
Pensions
At 31 December 2023, the defined
benefit pension scheme (the scheme)
was in an actuarial accounting surplus
position of £9.8 million (31 December
2022: surplus of £15.2 million).
Applying the valuation principles set
out in IAS19, at the year end the scheme
had asset levels of £373.7 million
(31 December 2022: £373.6 million)
against scheme liabilities of £363.9 million
(31 December 2022: £358.4 million).
36
On 20 December 2022, the Scheme
completed a full buy-in transaction with
a specialist third-party provider, which
represented a significant step in the
Group’s continuing strategy of de-risking
its pensions exposure. Together with the
partial buy-in transaction in 2020, this
insures the vast majority of the Group’s
defined benefit liabilities. This transaction,
which involved no initial cash payment by
the Company, completed during the 2023
financial year.
In light of the fact that the pension
scheme was in a net surplus position after
the full buy-in, the Trustees and the Group
agreed that the Group would suspend
paying contributions with effect from
1 March 2023.
Related party transactions
Related party transactions are disclosed
in Note 16 to the consolidated financial
statements. During the current and prior
year, there have been no material related
party transactions.
Subsequent events
Except for the proposed ordinary dividend,
no further subsequent events requiring
either disclosure or adjustment to these
financial statements have arisen since
the balance sheet date.
Going concern
The Directors are required to assess
whether it is reasonable to adopt the
going concern basis in preparing the
financial statements.
In arriving at their conclusion, the Directors
have given due consideration to whether
the funding and liquidity resources are
sufficient to accommodate the principal
risks and uncertainties faced by the Group.
Having considered the outputs from this
work, the Directors have concluded that
it is reasonable to adopt a going concern
basis in preparing the financial statements.
This is based on an expectation that the
Company and the Group will have adequate
resources to continue in operational existence
for at least twelve months from the date of
signing these accounts.
Further information is provided in note 2
of the financial statements.
Ibstock Plc | Annual Report and Accounts 2023 Responsible business
Non-Financial
and Sustainability
Information Statement
This section of the Strategic Report constitutes our Non-Financial and Sustainability Information Statement. In compliance
with Sections 414CA and 414CB of the Companies Act 2006, the information listed is incorporated into this statement by
cross-reference to relevant content.
Requirement
Environmental matters
Policies
• ESG 2030 Strategy reports
• Sustainable Procurement Policy
Additional Information
Responsible Business
Compliance and other statements
Pages
Pages 37 to 71
Page 88
• Health and Safety
Policy Statement
• Diversity and Inclusion Policy
• Anti-bullying and
Harassment Policy
• Code of Business Conduct
• Whistleblowing Policy
• Modern Slavery Statement
• Data Protection Policy
• ESG 2030 Strategy
and Framework
• Anti-bribery and
Corruption Policy
• Competition Law
Compliance Policy
• Supplier Sustainability
Code of Business Conduct
Employees
Human rights
Social matters
Anti-corruption and bribery
Description of the
Business Model
Principal risks and impact
of business activity
Non-financial key
performance indicators
Responsible Business
Nomination Committee Report
Pages 37 to 71
Pages 87 to 91
Compliance and other statements
Page 86
Responsible Business
Pages 37 to 71
Compliance and other statements
Corporate Governance Statement
Page 86
Page 77
Our purpose and business model
Page 14
Principal risks and uncertainties
Corporate Governance Statement
Audit Committee Report
Responsible Business
TCFD
Strategic Report
Key performance indicators
Pages 22 to 26
Pages 72 to 98
Pages 94 to 98
Pages 44 to 55
Pages 56 to 69
Pages 02 to 71
Pages 20 to 21
The policies mentioned above provide the link between our purpose and values and how Ibstock is managed and does business.
37
Ibstock Plc | Annual Report and Accounts 2023Additional informationGovernanceFinancial StatementsStrategic Report Responsible Business continued
Stakeholder engagement
The Board carefully considers the impact
of its decisions for stakeholders as part of
their duty to act in the way, they consider,
would be most likely to promote the success
of the Company.
Find out more
The Section 172(1) Statement p42
Stakeholder engagement p81
Principal decisions undertaken
by the Board in 2023 p43
The output from engagement below Board
level is reported to the Board and/or Board
Committees to help inform both Board
and other business level decisions.
The Board considers that our stakeholder
engagement mechanism remains effective.
In 2023, the Executive Leadership Team
(ELT) and Board received qualitative
reporting to identify trends and emerging
issues of pertinence to each stakeholder
group. This enabled the ELT and the Board
to readily consider stakeholder issues in
decision-making.
Our key stakeholders have been identified
by the Board through a careful review of
the important groups that we need to work
with to achieve our strategy and promote
long-term success within our Company.
The Board considers each key stakeholder’s
interests, priorities and views, when making
decisions, noting there may be times
when stakeholders’ interests and priorities
potentially conflict. Although the Board
engages directly with some stakeholders,
the majority of engagement takes place
across various levels and teams within
the business. The Chairs of the Board
and the various Committees are available
to engage with stakeholders on their
areas of responsibility on request.
38
Employee at our Chesterton factoryIbstock Plc | Annual Report and Accounts 2023 Our Investors
Individuals or institutions who own
shares in Ibstock Plc
Why they are important
Our current and potential investors ensure our
continued access to the capital that enables
us to pursue our Strategic objectives.
Link to KPIs
• Revenue
• Adjusted EBITDA*
• Net debt to adjusted EBITDA*
• Adjusted ROCE*, Adjusted* EPS
• Women in senior management
• Carbon reduction metric
Refer to KPIs p20-21
Link to strategic outcomes
Our Customers
The businesses and organisations
that buy our products
Why they are important
Customers play a crucial role in shaping
our growth and driving our innovation.
Collaborative and long-term mutually
beneficial relationships with our customers
are the foundation of our success.
Link to KPIs
• Revenue
• Net Promoter Score
• Carbon reduction metric
• Share of revenue from new
and sustainable products
Refer to KPIs p20-21
Link to strategic outcomes
What they tell us matters to them
• Financial performance and progress against strategy
• ESG performance and ambitions
• Balance sheet management and approach to capital allocation
• Business resilience and prospects
• Return on investment
• Risk management
How we engage at Board level
• Members of the Board, including the CEO and CFO, meet with shareholders and analysts
as part of the regular annual cycle
• The Board receives structured feedback after each market announcement from our Brokers
How we engage across the Company
• Investor roadshows
• Results presentations
• Annual General Meeting
• One-to-one meetings and calls with investors and brokers
• Chair and Board Member meetings on request
What Ibstock offers them
• We have a sustainable and progressive dividend policy. This policy is supported by
businesses with structurally high margins and strong cash generation and a strategy
that provides a strong platform for future growth and value creation
Outcomes from engagement
• The Board considered shareholder views when assessing the options to manage
our cost base and production capacity
Priorities for 2024
• Strong communication and engagement
• Delivery of strategic projects and initiatives
• Execution of business plans and balance sheet management
• Board engagement with investors
• Construction Inclusion Coalition
What they tell us matters to them
• Product value, pricing and quality
• Volume and availability
• Quality of customer service and corporate governance
• Strong, collaborative relationships
• Visibility into embodied carbon in products
How we engage at Board level
• The Board receives updates on the relationships with existing customers
• Customer and employee feedback is fed into Board discussions, which together with
market insights shapes strategic decisions, including plans related to capital investment
and innovation
• The Board receives and considers the net promoter score (NPS) results
How we engage across the Company
• Account Management Teams
• Customer Service Team
• Design and Specification Advisers
• Customer feedback, including focus groups for specific customer categories, for example
architects and builders’ merchants
• Quality and complaints team
• Social media
What Ibstock offers them
• Builders’ merchants, house builders, specialist brick distributors, contractors and installers
are the five main customer groups for the Group’s clay and concrete products in the UK.
Building our understanding of our customers’ priorities is imperative to meeting their needs
• The unrivalled choice of products available within the Group’s range of clay bricks provide
these customers with the widest selection from which to choose
• As a full-range supplier, our Concrete businesses provide customers with a broad product
set upon which to base their buying decisions
Outcomes from engagement
• We have restructured our sales teams to bring a more co-ordinated, customer-centric
commercial approach
• We took decisive action to manage our production capacity with a focus on ensuring
continuity of supply and our ability to react quickly as demand returns
Priorities for 2024
• Improved service through a joined up offer from One Ibstock
• Sustained high quality and depth for product range
• Sustainability enhancements and innovation
39
Ibstock Plc | Annual Report and Accounts 2023Additional informationGovernanceFinancial StatementsStrategic Report
Responsible Business continued
What they tell us matters to them
• Fair pay and benefits
• Culture that cares and is inclusive
• Development for growth and resilience
How we engage at Board level
• The Listening Post is our formal mechanism for workforce engagement and sharing
employee views with the Board. Each Board member attends at least one Listening
Post per year. Peju Adebajo is our designated Non-Executive Director for workforce
engagement and attends each meeting
• Regular direct progress reports on people and culture from the Group People Director
• Board members visit our sites and senior management join meetings for specific items,
e.g. our Board Strategy meeting and through the ESG Committee visits
How we engage across the Company
• The continuation of the ‘Fire Up’ cultural transformation programme
• The Week – weekly video update from an Executive Leadership Team member posted
on our MyIbstock intranet, displayed on digital screens in common areas at all sites
and emailed to all employees
• Ibstock Informed presentations and live open Q&A panel sessions
• MyIbstock news and employee blogs
• Safe Start conversations
• Employees are encouraged to visit other sites and share best practice
What Ibstock offers them
• Alongside our focus on providing a safe and healthy working environment, we invest
in ongoing training, development and career progression. We also encourage employee
share ownership through our Sharesave scheme and our Fire Up share grant, to ensure
that value flows through to all our employee stakeholders
Outcomes from engagement
• Board oversight of employee pay and reward philosophy
• Senior leadership gender diversity target supported by the Board
Priorities for 2024
• Joining up the organisation in service of performance and delivery of results
• Implementing the actions from the employee engagement survey results
• Development and implementation of a Diversity and Inclusion plan
What they tell us matters to them
• Localised environmental impacts
• Employment, education and training
• Equal opportunities
• Financial support for local community activity
How we engage at Board level
• The members of the ESG Committee receive a quarterly summary of material issues
or points of interest from Ibstock’s community stakeholder champions including the
Estates Team, Early Careers, Charity Champions and Factory Managers
• Through MyIbstock, significant content is shared by employees on our community work
and charitable activities. This system enables the Board to engage with and monitor activity
• As part of its strategy day, the Board did a tour of the Bromley-by-Bow social housing
initiative to better understand how Ibstock could support our communities
How we engage across the Company
• Factory Managers link with local community
• Estates team liaison with local authorities and interest groups
• Charity Champion network
• Early Careers engagement with training and education sector
• MyIbstock community stories
Outcomes from engagement
• The Board were supportive of colleague preference to devolve our approach to Giving Back
to support more local causes with our matched funding offer
• The Board reviewed the proposed approach to measuring the social value of the business
Priorities for 2024
• Continued skills development and early careers
• A focus on biodiversity
• Support for local community initiatives and engagement with local schools and colleges
Our Employees
Colleagues who work in our business
Why they are important
Our talented and engaged employees
play a vital role in the success of Ibstock.
We not only have a legal obligation to look
after our employees but an ethical obligation
to ensure that we create an environment
where everyone can be at their best.
Link to KPIs
• Lost time injury frequency rate
• Employee engagement
• Female representation in senior
leadership
Refer to KPIs p20-21
Link to strategic outcomes
Our Communities
The people who live and work in the
local communities around our sites
and operations
Why they are important
Our activities can have a lasting impact
on the communities in which we operate
– we strive to leave a positive legacy.
Link to KPIs
• Carbon reduction metric
Refer to KPIs p20-21
Link to strategic outcomes
40
Ibstock Plc | Annual Report and Accounts 2023
Government
and Regulators
Government bodies and agencies
What they tell us matters to them
• Workplace health and safety
• Energy and climate change
• Legal and regulatory compliance
How we engage at Board level
• Updates from the Group Company Secretary at each Board meeting
• Reports from our external advisers
• Direct liaison as required
How we engage across the Company
• Industry bodies, forums and conferences
• Direct liaison with Government and regulatory bodies where pertinent
What Ibstock offers them
• Through our involvement with industry bodies and other engagement activities, Ibstock
seeks to support the development and assessment of laws and regulations within the
construction sector
Outcomes from engagement
• During the year, the Board accessed subject matter expertise and training on legislative,
regulatory and best practice changes and considered the impact on strategy and
business activity
Priorities for 2024
• Adherence to new regulations such as the Building Safety Act and the Future Homes hub
• Support to achieve the objectives for the industry as led by the BDA, CPA and Construction
Inclusion Coalition
• Construction projects information
• Continued focus on improving diversity within Ibstock and our industry
Why they are important
Understanding and adapting to the changing
laws and regulations is essential to ensure
that Ibstock not only remains compliant with
requirements but can also benefit from any
opportunities that any changes presents.
Link to KPIs
• Carbon reduction metric
Refer to KPIs p20-21
Link to strategic outcomes
Pension Fund Members
and Trustees
The Trustees and members of
the Ibstock pension schemes
What they tell us matters to them
• Pension scheme member interests
How we engage at Board level
• Regular reports from the finance team
How we engage across the Company
• Direct liaison with Trustees
• Financial oversight
What Ibstock offers them
• Confidence in the long term security of their pension
Outcomes from engagement
• With the Company’s support, in 2022 the Trustees agreed a buy-in transaction
covering all remaining pension liabilities
Priorities for 2024
• Regular engagement with the Trustees
Why they are important
As part of our culture of care, we are
committed to continue to look after our
employees once they have retired.
Link to KPIs
• –
Refer to KPIs p20-21
Link to strategic outcomes
41
Ibstock Plc | Annual Report and Accounts 2023Additional informationGovernanceFinancial StatementsStrategic Report
Responsible Business continued
Section 172(1) Statement
The Board of Directors confirms
that, during the year under review,
it has acted in good faith to
promote the long-term success of
the Company for the benefit of its
members as a whole, whilst having
due regard to the matters set out
in Section 172(1)(a) to (f) of the
Companies Act 2006.
To ensure the Board complies with S.172 of the
Companies Act 2006, each Director carefully
considered the outcomes of key decisions for
Ibstock’s stakeholders as part of their duty to
act in the way that they consider would most
likely promote to the success of the Company.
This results in an approach whereby decisions
are made that result in consistently high
standards of business conduct and the
success of Ibstock in the long term.
Examples of matters discussed in the
year by the Board and their impact
on our stakeholders are included in the
tables below and discussed throughout
the Strategic Report and Corporate
Governance Statement. The tables below
identify where in the Annual Report
information on the issues, factors and
stakeholders the Board has considered
in respect of s172(1) can be found.
s172(1) factor
(a) the likely consequences of any decisions in the long term;
Example: During the year, the Board continued to ensure that the Group’s strategy remained
appropriate to deliver the long-term success of the Company, and oversaw management’s
execution of the strategy. The Board carefully evaluated the likely consequences of its decisions,
challenging management where necessary to ensure that the impact of any decisions over the
long term would be of benefit to the Company. An example of this is the Board’s oversight of
cost and production restructuring work.
(b) the interests of the Company’s employees;
Example: Particularly through the work of the ESG Committee, the Board retained oversight of
the formulation and delivery of the Group People Strategy. The Board ensured that the People
Strategy remained true to the core values of Teamwork, Trust, Care and Courage, and that our
employees were appropriately supported. The Board received and considered feedback from
the Group’s employees through the Listening Post and the employee engagement survey.
(c) the need to foster the Company’s business relationships with suppliers, customers
and others;
Example: Reaching mutually agreeable and pragmatic solutions to supply chain challenges
and increasing input costs has been a key aspect of the Board’s decisions when having regard
to this factor. An example of this is the Board’s oversight and support of new energy contracts
and logistics suppliers during the year.
(d) the impact of the Company’s operations on the community and environment;
Example: The Board and ESG Committee have supported and are driving Ibstock’s
ambition to be sector leading in its approach to ESG issues and approved the ESG 2030
Strategy to maintain this position through to 2030, as well as a commitment to be a net
zero business (Scope 1 and 2) by 2040. Through the work of the ESG Committee, the Board
has overseen progress relative to our targets under the ESG 2030 Strategy, whilst supporting
and encouraging the Group’s efforts in this area.
(e) the desirability of the Company maintaining a reputation for high standards
of business conduct;
Example: The Board remains committed to ensuring the business operates with the highest
standards of integrity, and continually reviews and tests the compliance arrangements in place.
A significant part of the Board’s leadership responsibility is to ensure that the Company’s purpose,
strategy and culture remain aligned, and it recognises that a robust and transparent culture is a solid
foundation for maintaining the Group’s reputation for high standards of business conduct. Over the
course of the year, the Board has overseen and supported the initiatives undertaken on culture.
(f) the need to act fairly between shareholders and the Company.
Example: The Board seeks to ensure that communications are clear and its actions are in
accordance with the Group’s stated strategic aims to promote the long-term success of the
Company. All of our shareholders have the opportunity to engage with the Board and ask
questions at the Company’s Annual General Meeting. When considering the dividend payments
during the year, the Board carefully considered the interests and needs of both institutional and
retail shareholders, ensuring these were carefully balanced prior to making recommendations.
42
Where to find out more
Strategic Report
Chair’s Statement
Chief Executive Officer’s Review
Our markets
Ibstock Futures Operations Review
Our purpose and business model
Our Strategy
Key performance indicators
Principal risks and uncertainties
Governance
Board Leadership and Company Purpose
Strategic Report
Our purpose and business model
Our Strategy
Responsible Business
Governance
Board Leadership and Company Purpose
ESG Committee Report
Strategic Report
Our markets
Our purpose and business model
Our Strategy
Responsible Business
Governance
Board Leadership and Company Purpose
Strategic Report
Responsible Business
ESG Committee Report
Strategic Report
People and culture
Responsible business
Governance
Audit Committee Report
Compliance and other statements
Page
08
10
12
31
14
16
20
22
78
14
16
37
78
92
12
14
16
37
78
37
92
78
37
94
77
Strategic Report
Chair’s Statement
Responsible Business
Governance
Board Leadership and Company Purpose
Directors’ Report
08
37
78
117
Ibstock Plc | Annual Report and Accounts 2023 Principal decisions during 2023
It is acknowledged that it is not possible
for all of the Board’s decisions to result in
a positive outcome for every stakeholder
group. When making decisions, the Board
considers the Company’s purpose, vision
and values, together with its strategic
priorities, and takes account of its role as
a responsible business. By doing this, the
aim is to ensure that decisions are robust,
sustainable and drive long-term success
for the Company.
The main areas of Board activity can
be found on page 80. All of these areas
involve a range of inputs from stakeholders
which are communicated to the Board in
a variety of different ways. We detail below
how the Board factored stakeholders,
and the information we received through
engagement, into three principal decisions
in 2023. When making each decision, the
Board carefully considered how it promoted
the long-term success of the Group, its
financial and non-financial impacts, and had
due regard to the other matters set out in
s172(1)(a) to (f) of the Companies Act 2006.
Coltman Acquisition
Stakeholder Groups
Employees, Customers,
Suppliers, Communities,
Investors
Cost Management Activity
Employees, Customers,
Suppliers, Communities,
Investors
Dividend
Investors, Pension Fund
Members and Trustees
In making the decision to acquire the Coltman business, the Board considered the
impact of this acquisition on the long-term success of the Group. During this process,
it also considered the impact on the Group’s colleagues, customers, suppliers and
shareholders, as well as the environment and communities.
During this decision process, the Board was mindful that the acquisition of Coltman
provided an opportunity to consolidate the remote site in Northern Ireland. Relocating
production to the North of England, whilst beneficial to the majority of our stakeholders,
would have a negative impact on those colleagues based on that site. This was a key
point of consideration for the Board.
The Board recognised that due to challenging market conditions, decisive
cost management activity was required to ensure the long-term success of
the Group, including the closure of some factories. In making this decision, the
Board considered how retained and displaced employees are supported through
the process, the improvements in the customer and supplier ways of working
that will be made, and the impact of the local communities when closing sites.
The Board also considered the impact on short-term shareholder returns when
making this long-term decision.
When declaring a dividend, the Board is mindful of the importance of a dividend
as an income stream for many of our shareholders, the financial position of the
Company, and the financial strengths and prospects of the business.
Upon considering all the above, the Directors decided it was appropriate to pay
an interim dividend and recommend a final dividend totalling 3.6 pence per share.
The Board will keep the dividend policy under review to ensure it remains appropriate
and continues to be in the interests of shareholders, with due regard paid to the
interests of the Company’s other stakeholders.
43
Ibstock Plc | Annual Report and Accounts 2023Additional informationGovernanceFinancial StatementsStrategic Report Responsible Business continued
Our ESG
ambitions
Environment, Social and Governance (ESG)
matters are increasingly important for all
Ibstock stakeholders
Highlights in 2023
• £12 million investment at Aldridge
factory complete with expected
19% carbon reduction per brick
• Re-engineered SL8 and Gemini tiles
provided our lowest embodied carbon
roof tiles offering to the market
• Successful pilot project to fire bricks
using synthetic gas derived from waste
• Programme of Environmental Product
Declaration (EPD) roll out commenced,
with a plan to produce these for all
products in the near term
• Externally accredited by Best Companies
as a ‘good company to work for’ with
official ‘ones to watch’ status and
a 76% employee participation rate
• 300k bricks donated to schools and
colleges, supporting skills development
in the sector
Why it is important
During 2023, Ibstock
reviewed the alignment
of the ESG 2030
Strategy with the
UN Sustainable
Development Goals
(SDGs) to provide
greater focus for actions
in performing as
a responsible business.
Please see our Sustainability
Report found at www.ibstock.co.uk
for more detail.
The two priority goals that Ibstock can
contribute most significantly to are:
SDG 12 Ensure sustainable consumption
and production patterns aligns to the
Manufacturing Materials for Life pillar
SDG 13 Take urgent action to combat climate
change and its impacts aligns to the Addressing
Climate Change pillar
Climate change is considered a fundamental risk
to the long-term viability of environment and
society. 11% of global carbon emissions are
attributed to construction products and processes
As an energy intensive manufacturer in this
sector, Ibstock has a critical role in taking
Climate Action to drive the shift to a low
carbon built environment that is designed
and manufactured for the long-term success
of communities. To achieve this, Ibstock’s
products, processes and services will evolve,
incorporating whole lifecycle design, preserving
raw materials and adopting circularity
principles, thereby promoting responsible
production and consumption.
Ibstock’s people are central to making
a meaningful contribution to supporting
these two global goals and delivering the
business strategy. The Improving Lives pillar
in the ESG 2030 Strategy is vital to tackle
the skills shortage across the construction
and manufacturing sectors. Investing in
people, culture and communities, with
health, safety and wellbeing as the central
priority, the business is ensuring the
workforce belong, thrive and grow.
We also note that the below SDGs, whilst not our priority goals, continue to be relevant to Ibstock.
Good Health and Wellbeing:
Wellbeing of our employees is
paramount in enabling them
to perform, develop and thrive
at work and at home
Affordable and Clean Energy:
Self generation of renewable
energy reduces our carbon impacts
and reliance on the national grid
Quality Education: Education,
training and development of our
people is essential for our success
as is our support for future
generations entering our sector
Industry, Innovation and
Infrastructure: Innovation in
building products and solutions
will support the transition to
a low carbon economy and
transform the industry
Gender Equality: Proactively
supporting women into the
construction sector helps tackle
the skills shortage and brings
diversity of thought and
opportunity to the sector
Use of Land: All sites operate
with due care and consideration
for biodiversity. Moving to a net
positive position will see Ibstock
introduce more proactive
biodiversity programmes
44
Ibstock Plc | Annual Report and Accounts 2023 ESG 2030 Strategy
In 2022, we launched Ibstock’s ESG
2030 Strategy and remain committed
to this approach.
This strategy provides the framework
for actions across the three key areas
that Ibstock needs to focus on –
Addressing Climate Change, Improving
Lives and Manufacturing Materials
for Life. Each pillar provides a set of
ambitions and KPIs against the nine
priority material issues for the business
and its stakeholders. Underpinning
these actions is the commitment to
doing business responsibly through
corporate governance.
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S F
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Addressing Climate Change
Carbon reduction (Scope 1 and 2)
Water
37%
2022: 20%
+8%
2022: 31%
% absolute carbon reduction tonnes CO2
(relative to 2019 baseline)
% reduction in mains water use per tonne
of production (relative to 2019 baseline)
Biodiversity
N/A
2022: N/A
Biodiversity Net Gain
Target: 40% by 2030; Net Zero by 2040
Target: 25% by 2030
Target: Net Gain by 2030
Improving Lives
Health and safety
60%
2022: 61%
Earn and Learn positions
Women in senior leadership
6.9%
2022: 7.5%
35%
2022: 27%
% reduction in lost time injury frequency
rate (LTIFR) (relative to 2016 baseline)
% of colleagues in Earn
and Learn positions
% of women in senior leadership
Target: 50% achieved in 2023
Target: 10% by 2030
Target: 40% by 2027
Manufacturing Materials for Life
Product innovation
11%
2022: 13%
Waste
5%
2022: 10%
% sales turnover from new sustainable
products and solutions
% general waste to landfill
Plastic packaging
25%
2022: 16%
% reduction in preventable plastic
packaging per tonne of production
(relative to 2019 baseline)
Target: 20% by 2030
Target: Zero by 2025
Target: 40% by 2025
45
Ibstock Plc | Annual Report and Accounts 2023Additional informationGovernanceFinancial StatementsStrategic Report
Responsible Business continued
Addressing
Climate Change
As the largest brick manufacturer in the
UK, we have an opportunity, as well as
a responsibility, to reshape our future to
one that’s more sustainable and fairer.
Carbon reduction, water management
and improved biodiversity are all key to
our strategy to address climate change.
Carbon reduction
We continue to act at all levels of the
business to deliver our ambitious target
of a 40% reduction in carbon by 2030.
It is pleasing to see a 37% reduction in our
absolute Scope 1 and 2 carbon emissions
against our 2019 baseline, and whilst a
large proportion of this reduction links
to lower production volumes during 2023,
a number of operational efficiency and
dematerialisation projects have
contributed to this reduction.
The carbon intensity metric for 2023
was 0.151 tonnes of carbon per tonne of
production, an increase on 2022 due to
the estate running at a lower efficiency as
the market slowed. We expect continued
incremental improvements in carbon
reduction in 2024 while focus remains on
the longer term transformation projects,
including alternatives to natural gas and
process emissions reduction. Operational
efficiencies for energy and carbon will
benefit when the market returns as factories
will operate at improved efficiency as they
return to full capacity.
37%Decrease in absolute carbon
relative to 2019 baseline
46
In 2023, the business continued to deliver
against the Scope 3 carbon reduction
strategy by:
• increasing the granularity of our Scope 3
carbon reporting, resulting in an increase
in the business Scope 3 figure working
with Emitwise (see page 54 for Scope 3
carbon figure)
• delivering our third supplier engagement
day focusing on new low carbon
solutions with over 50 key supply
chain contacts
• working in partnership on low carbon
materials and innovation with particular
focus on cement reduction in our
product range
• advocating for a lower carbon built
environment in the supply chain through
our partnerships with the Supply Chain
Sustainability School, Future Homes Hub
and UK Green Building Council
Synthetic
Gas Production
Research and development into synthetic
gas (syngas) production, as an alternative
to natural gas, continued in 2023.
We fired and tested further product
successfully using 100% synthetic
gas. This waste to energy project has
potential in terms of decarbonisation
and net impact. The advanced thermal
conversion technology for syngas is
pyrolysis, which is a clean and efficient
process for this feedstock. The carbon
saving from creating and utilising fuel
gas from waste material in this way
should provide a net reduction when
compared to the current natural gas
position. This presents a medium-term
solution as technologies develop and
we move towards our net zero targets.
We are now evaluating the feasibility
of such an operation being installed
into one of our factories.
Syngas proof pointIbstock Plc | Annual Report and Accounts 2023 Carbon Transition Plan
We have developed our Carbon Transition
Plan to set out our steps to achieve a 40%
reduction in our Scope 1 and 2 carbon
by 2030, against a 2019 baseline, whilst
also supporting our Company’s mid-term
financial targets.
As an energy intensive manufacturer, we
know that achieving our carbon targets is
complex and we are still developing some
of the solutions required. However, Ibstock
remains committed to and motivated by
these targets, as we seek to evolve our
business and seize the opportunities
that this plan offers.
As part of our plans to reduce our
absolute Scope 1 and 2 carbon
emissions by 2030, we will:
• cut emissions across our factories through
careful investment in technology that
supports and improves the efficiencies
of our dryers, kilns and curing;
• continue to source renewable electricity
across the Ibstock Group;
• increase the use of recycled content
within our products;
• reduce the size and weight of our
products including manufacturing
‘thin bricks’ and brick slips;
• focus our investment in new product
development on producing lower
carbon offerings;
• create strategic partnerships with
suppliers to support the development
of alternative fuels such as hydrogen
and/or synthetic gas as a low carbon
replacement for natural gas; and
• work with our customers to be a
vital and strategic partner supporting
their own carbon transition plans.
We recognise that our carbon reduction
journey may not always be linear and
that investments may take some time
and effort to fully embed within our
manufacturing processes. We are also
mindful of our customers’ requirements
and their appetite to change. That said,
Ibstock is committed to continue to
invest in creating a more sustainable
company for our future.
Risk
We recognise that there are some key risks
to our Carbon Transition Plan including the
failure of technology or Ibstock’s ability
to implement key projects, the careful
alignment and prioritisation of financial
and environmental targets, and the
appetite of our customers to adopt
new lower carbon products.
Governance
We have a clear and well organised
governance framework to develop
and implement the changes necessary
within Ibstock. More detail on this is
shown on page 60.
Metrics
To measure and monitor progress, we will
continue to externally report on absolute
carbon and carbon intensity measures.
0.151
Tonnes of carbon per tonne of production
47
Ibstock Plc | Annual Report and Accounts 2023Additional informationGovernanceFinancial StatementsStrategic Report Responsible Business continued
Water efficiency
Following a review on how we measure
and report total water use, in 2023 we
have removed the water discharged from
our quarries from this measure as it is not
related to our water consumption. As a
result our 2023 total water use is reported
to be significantly lower and year-on-year
comparisons are not relevant.
For mains water consumption we report
an 8% increase in 2023 in m3 of mains
water per tonne of production relative to
the 2019 baseline. Further improvements
in accuracy of our mains water reporting
is a partial contributor to the increased
mains water consumption alongside one
clay site being unable to use their quarry
water for the year, significantly increasing
their reliance on mains water in 2023.
8%increase in mains water use per tonne
of production (relative to 2019 baseline)
Biodiversity
The business has for many years been
managing land responsibly, as a principle,
of our operations, as a neighbour and
custodian of land. Biodiversity is a key
priority in our estate management plans
and all quarrying operations are covered
by planning consents which include
conditions for site restoration.
To support the business achieving
the 2030 biodiversity commitment,
a Biodiversity Management System was
developed in 2023 to objectively score
the biodiversity value of any given site,
enabling tracking of long-term trends,
recording the presence of protected and
notable species and identifying enhancement
opportunities. The Management System
has been piloted across Ibstock’s Leicester
site and will be rolled out in 2024, with
full Company completion expected in
early 2025.
3,200
Bluebells planted in 2023
48
Rainwater
harvesting
A new rainwater harvesting
system was installed at Ibstock’s
concrete factory in Bootle provided
204m3 mains water for the site from
April to December 2023. Rainwater is
collected from the factory roof into
the harvested tank, then transferred
into the process, taking priority over
the mains feed. The newly installed
system directly reduces the mains
water consumption and is an
example of our sites implementing
their water reduction plans.
Bluebell and
tree planting
In 2023, we undertook significant
planting activity, engaging Ibstock
colleagues, as part of our estate
enhancement activity. In total over
3,200 bluebells and 350 trees were
planted, including our commemorative
King Charles III Coronation tree
plantation of oak and maple at Ibstock
headquarters in Leicestershire, set into
the woodland planted in 2016 when
over 17,000 trees were set.
Colleagues at Leicester site tree plantingRainwater tank at BootleIbstock Plc | Annual Report and Accounts 2023 Awards
Throughout the year, Ibstock has been
externally recognised by winning many
awards, as detailed below.
East Midlands Business
Leadership Awards, Green
Leader and being named in
the Top 100 Green Leaders
in UK Manufacturing
Winner: Joe Hudson, CEO, for leading
Ibstock’s decarbonisation journey with
ambitious targets backed by culture
change and investment in transformation.
Make UK Apprentice
Endeavour Award 2023,
Midlands Region
Winner: Isabella Walsh, Manufacturing
Management Apprentice, for her
commitment to taking action on inclusion
and diversity and mental wellbeing at our
Ibstock Northwich factory.
Siemens Mobility Awards –
Sustainable Supplier Award
Winner: Ibstock’s innovative, sustainable
solution for Rail and Infrastructure Signal
Base structures for their low carbon
concrete mix design ‘off-site’ enabling
consistency of product, savings on resource
and materials and less time needing to be
spent by trackside installation teams.
British Ceramics
Confederation Net
Zero Leader Award
Winner: Darren Bowkett, for his
leadership over 30 years in the
industry in decarbonisation technology.
Health and Safety
Pledge Awards 2023 –
Award for Excellence
Winner: Ibstock Plc for outstanding
contribution to health and safety
across the industry.
Health and Safety
Pledge Awards 2023 –
Emerging Talent Award
Winner: Edward Slingsby,
SHE Co-ordinator at Eclipse.
49
Safety Pledge Awards from British Ceramic Confederation – October 2023Ibstock Plc | Annual Report and Accounts 2023Additional informationGovernanceFinancial StatementsStrategic Report Responsible Business continued
Manufacturing
Materials for Life
The inherent sustainability attributes
of Ibstock’s clay and concrete products
are essential in supplying our customers
with the right materials and solutions
for a low carbon built environment.
Product innovation
New product development has dropped slightly
in 2023, with 11% of revenue coming from new
and sustainable products compared to 13% in
2022. Commissioning of the Atlas factory in late
2023 and rapid research and development in
the Concrete Division shows a strong pipeline
to achieve our 20% target by 2025. A number
of new products were successfully offered to the
market with stronger sustainability credentials,
including roof tile ranges, fence posts and utility
troughs and copers.
In response to customer needs, in 2023 Ibstock
invested in resource and software to develop
EPDs, providing the embodied carbon of products
based on a full lifecycle analysis. In addition to
our existing Telling GRC EPD, Ibstock now has
verified data across a range of concrete and
clay products to be published in early 2024.
Further EPDs will be released through the year,
enabling our customers and the business to
make more accurate and informed decisions
on material choice and processes.
“SL8 is a great product to work with. Its larger size
tile means you don’t have to transport as many to
site and, with fewer tiles needed to cover the surface
area of a roof, it helps to save time and money.”
Russel Whitney
Roof Plus
50
Ibstock product attributes are:
• Resilience
a long product lifecycle, durable,
weather proof and fire resistant
• Efficiency
versatile, produced at scale with
a high thermal performance
• Circularity
reusable and recyclable at end of life
Building on these attributes, we are
committed to manufacturing materials
for life by both evolving our products
and bringing new products to market
with lower embodied carbon, preserving
raw materials and providing product
data transparency to promote informed
and responsible consumption.
SL8
roof tiles
Ibstock’s new improved SL8 roof
tile is a large format tile with the
visual aesthetics of a slate tile.
Carbon reduction has been achieved
through a new tile mix design used in
conjunction with lower carbon cement
to provide a strong and durable, lower
carbon product. The large format
design also provides roof coverage
using less materials and is a lighter
load for transportation.
Our SL8 roof tilesIbstock Plc | Annual Report and Accounts 2023
Dematerialisation
Reduction in material use presents a key
opportunity for our customers as they
seek to reduce the embodied carbon
of their developments (homes and
infrastructure). Ibstock is focusing on
reducing the pressure on virgin resources,
including our own reserves, by focusing
on plastic reduction and secondary
materials such as aggregates and
cementitious replacements.
In the year under review, we achieved
25% reduction in preventable plastic
packaging per tonne of production relative
to a 2019 baseline as part of our drive to
achieve our target of 40% reduction by
2025 against the 2019 baseline.
25%
Reduction in preventable plastic
packaging since 2019
Circularity
Ibstock products are inherently reusable or
recyclable at the end of their life, meaning
they can already contribute to the circular
economy. The business are working on those
areas in their direct control – general and
process waste reduction. Our research and
development teams are focused on reduction
of raw materials in our products and
prioritising secondary and recycled content.
The business is on track to achieve our zero
waste to landfill target by 2025, with only
5% of our general waste being sent to
landfill in 2023.
Pro
fencing range
In 2023, we launched a new
Strongcast Professional Range
concrete fence post, engineered
to offer customers a superior and
more sustainable fencing solution.
Ongoing investment in our new
product development programme
has been carried out alongside the
upgrading of our manufacturing
capabilities across many areas
including concrete mixing
technology. This, along with
the redesign of the posts to reduce
virgin material, results in the fence
posts and gravel boards boasting
up to 35% reduction in embodied
carbon compared to the Strongcast
Original Range. Whilst the Pro Range
posts are of lightweight construction,
the reduced section size and use of
a super steel reinforcement cage
means they retain the strength and
longevity to withstand wind and
weather and provide easier manual
handling for installers.
51
Product from our fencing rangeResearch and development into product designIbstock Plc | Annual Report and Accounts 2023Additional informationGovernanceFinancial StatementsStrategic Report
Responsible Business continued
Improving Lives
Ibstock’s people are key to the successful delivery of the
business strategy and ESG 2030 commitments. Engaging
with our colleagues and our communities is crucial to
ensuring the business can support their needs and thrive.
Employee engagement
The business measures employee
engagement through the externally
accredited Best Companies survey.
In 2023, 76% participation and
improvements across all areas
resulted in the business achieving
a ‘good company to work for’ with
official ‘ones to watch’ status.
Improved internal communication
and visible leadership has been the
foundation of developing Ibstock’s
employee experience. The framework
of communications in place connects
everyone across the Group, underpinned
by our MyIbstock intranet site available
on desktop and mobile app, this enables
knowledge sharing, business updates
and facilitates feedback.
• The Week – weekly vlog from a member
of the Executive Leadership Team
• Ibstock Informed – monthly ‘all
colleague’ forum with open Q&A
• Tier meetings – four levels of meetings
at every factory site, from daily to
quarterly, to cascade information
and gather feedback
• Listening Post – colleague representatives
discussing issues openly with the
Executive Leadership Team and
Board members in attendance
Following the launch of our mental
health programme in 2022, we rolled
out our Compassionate Conversations
training for all senior leaders and people
managers across Ibstock. In conjunction
with the Lighthouse Charity, we also
invested in Mental Health Allies training
for 30 colleagues, delivered alongside
Mental Health First Aid.
We continue to listen to our colleagues
and take action on areas that they
tell us are important to improving their
health, safety, wellbeing and comfort
at work. One example of this is the
trial of hot weather Personal Protective
Equipment (PPE) as part of our
climate adaptation measures.
Health, Safety
and Wellbeing
Safety is our number one priority.
Details of our safety performance and
activity are on page 17 and include Safe
Start meetings at the start of each year.
Ibstock has increased the priority placed
on health and wellbeing over the last few
years. This trend continued in 2023, with
the number of queries to the Employee
Assistance Programme increasing to 7%
of our employees accessing this service
in 2023 from 5% in 2022. During 2023,
we became a sponsor of the Lighthouse
Charity, an organisation providing financial
and emotional support to the construction
community and their families. This further
demonstrates Ibstock’s commitments to
not only look after our own employees,
but also improve the wellbeing of all the
construction community.
52
7,000 days free from Loss Time Incidents at Chailey factoryIbstock Plc | Annual Report and Accounts 2023
Inspiring futures
Ibstock is committed to providing
development and growth for all
colleagues, and to attracting new
talent to the business. As members of
the ‘5% Club’, an employer-led initiative
dedicated to addressing employee skills
shortages, Ibstock had 7% of employees
in Earn and Learn roles during 2023.
The Ibstock apprenticeship programme
continues to be a driving force behind skills
succession planning, with 51 apprentices
on active programmes in 2023. 100% of
those completing their course are offered
a permanent role in the business and 76%
remaining with the business 3 years after
course completion.
Ibstock sites have continued to build
relationships with local schools and
colleges to help inspire future generations
into the construction sector. Activities in
2023 have included site visits to factories,
careers talks and product donations of
over 300,000 bricks.
300,000
bricks donated to schools and colleges
to support learning
Apprentice
Endeavour Award
Isabella Walsh, Manufacturing
Management Trainee at Ibstock’s
Northwich factory, was awarded the
Apprentice Endeavour Award by Make
UK at the Midlands region awards.
Izzy is one of Ibstock’s Concrete
Manufacturing Management Trainee
Apprentices at our Northwich factory,
making a range of pre-cast concrete
products for the infrastructure and
housing market. Izzy received the
Endeavour Award for bringing her passion
for supporting others with Autism and
ADHD to find their place in the workplace
and feel supported to thrive in a career
in manufacturing. Izzy has taken every
opportunity presented to her, speaking
to over 400 young people at careers
events and sharing her experience of the
challenges facing those with Autism and
ADHD with Ibstock colleagues, including
members of the Board through the
Ibstock Listening Post. Izzy became one
of Ibstock’s Mental Health Allies in 2023
and is an inspiration to the local team.
Employee experience
At the 2023 year end female senior
leadership representation stood at
35%. This is an improvement of 7%
from last year and demonstrates the
results from the diversity and inclusion
work that we are doing throughout the
year. The business is on track to meet the
ambition of 40% female representation
at senior leadership level by 2027.
See page 91 for further information
on diversity and inclusion.
Ibstock was one of ten founding members
of the Construction Inclusion Coalition
(CIC) launched in 2023. Responding to
polling, which showed ‘46% of respondents
said they’d be more likely to actively seek
out employment opportunities in the
construction industry if it demonstrated
a stronger commitment to diversity
and inclusion’, Ibstock and the founding
partners committed to the Built On Better
Pledge to tackle equity, diversity and
inclusion in the construction sector.
Giving back
Colleagues across the business are
supported to fundraise for charities
and local causes that they are
passionate about. The business
implements a matched funding
process that supports individuals and
teams in colleague led events such
as a Charity Football Tournament for
the Lighthouse Charity and Macmillan
Coffee Mornings. Our employees tell
us that they value the opportunity
and support that Ibstock provides.
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Isabella Walsh, winner of Apprentice Endeavour Award by Make UKIbstock Plc | Annual Report and Accounts 2023Additional informationGovernanceFinancial StatementsStrategic Report Responsible Business continued
ESG data and reporting
Streamlined Energy and Carbon Reporting (SECR) disclosure
Scope 1 Tonnes of CO2e combustion of fuel and operation of facilities
Gas MWh used per annum
Scope 2 Tonnes of CO2e location based
Scope 2 Tonnes of CO2e market based
Electricity MWh used per annum
Solar generated electricity MWh used per annum1
Intensity Ratio Tonnes of CO2e per tonne of production
Reduction in Scope 1 and 2 CO2e relative to 2019 baseline2
3
Scope 3 Tonnes of CO2
2019
349,200
1,230,000
28,429
28,429
110,507
–
0.159
N/A
N/A
2020
223,229
780,000
16,429
16,429
70,763
2
0.160
N/A
N/A
2021
299,698
1,050,000
19,912
–
93,779
2,480
0.141
N/A
N/A
2022
303,173
1,080,000
17,514
–
87,439
4,160
0.145
20%
157,950
2023
237,032
804,915
14,799
787
71,623
4,019
0.151
37%
107,915
Measurements for solar generated electricity MWh used per annum started in 2020.
1
2 Scope 1 and 2 reduction in 2022 has been restated as it excluded Scope 2. 2022 figure was reported as 13%.
3 Scope 3 emissions in 2022 has been restated using more granular data. 2022 figure was reported as 103,000.
Market based Scope 2 emissions are used to calculate the carbon intensity ratio. Ibstock using a small amount of gas, equating to 787 tonnes CO2
from landfill gas produced at one of our sites. The rest of our electricity is procured from the grid through a green tariff.
For reporting purposes, Ibstock defines its organisational boundary on an operational control basis, and our Scope 1 and 2 emissions and other
ESG metrics are reported on this basis. All emissions and energy are consumed in the UK.
Our ESG data and reporting does not include the recent acquisition of Coltman. This data will be captured and included during 2024.
Group Scope 3 emissions categories reported
GHG Protocol Scope 3
emissions category
Category 1 – Purchased
goods and services
Category 2 – Capital goods
Category 3 – Fuel- and
energy-related activities
Category 4 – Upstream
transportation and
distribution
Category 5 – Waste
generated in operations
Category 6 – Business travel
Category 7 – Employee
commuting
Category 8 – Upstream
leased assets
Category 9 – Downstream
transport and distribution
Included or excluded
Included
(spend-based method)
Included
(spend-based method)
Included
(average data method)
Included
(spend-based method)
Included
(average data method)
Included (hybrid approach)
Included (average data
method; modelled)
Excluded: Operation of Ibstock’s leased fleet
and buildings are included in Scope 1 and 2
Included (average data method)
GHG Protocol Scope 3
emissions category
Category 10 –
Processing of sold products
Category 11 –
Use of sold products
Category 12 – End-of-life
treatment of sold products
Category 13 –
Downstream leased assets
Category 14 – Franchises
Category 15 –
Investments
Included or excluded
Excluded: Ibstock’s products are not processed
further before use by end customers.
Excluded: Ibstock’s products do not lead to
significant direct GHG emissions during their
use by end customers. Further, attributing
building energy usage to Ibstock's products
presents a significant data challenge and
would likely be immaterial.
Included (average data method)
Excluded: Ibstock does not lease any assets to
third parties.
Excluded: Ibstock does not
have any business franchises.
Excluded: Ibstock does not hold any
significant investments in other
companies or assets beyond those
included in this inventory.
54
Ibstock Plc | Annual Report and Accounts 2023 Our ESG performance
The following table covers our wider sustainability metrics, which are aligned where possible to the SASB disclosure
for construction materials. We will continue to review this data suite on an ongoing basis for future reporting periods.
Topic
Metric
2019
2020
2021
2022
2023
Carbon Emissions and
Energy
Scope 1 emissions
Scope 2 emissions
Scope 2 (location based)
Scope 2 (market based)
Scope 3 emissions
Company cars
Company vehicles
Water
Water Intensity ratio
Mains water
Non-Mains water
Total water
Tonnes of CO2e combustion of fuel and operation of facilities
Tonnes of CO2e electricity
Tonnes of CO2e from electricity consumed if our power was
purchased from the grid applying averaged emissions
Tonnes of CO2e electricity consumed purchased from
renewable sources (this our reported Scope 2 total)
Tonnes of CO2
Low emission cars as a % of the total fleet
Low emission vehicles as % of the total mobile plant fleet
349,200
28,429
28,429
223,229
16,429
16,429
299,698
–
19,912
303,173
–
17,514
237,032
787
14,799
28,429
16,429
–
–
787
N/A
N/A
N/A
N/A
N/A
N/A
N/A
45%
N/A
157,950
55%
N/A
107,915
74%
11%
M3 mains water use per tonne of production
M3 mains water use per annum
M3 non-mains water use per annum
M3 total water use per annum
0.105
249,854
–
963,387
0.110
165,983
–
1,000,815
0.092
197,883
–
1,160,443
0.072
127,544
–
779,935
0.113
179,013
65,531
244,544
Tonnes of waste sent off-site
Tonnes of waste sent to landfill
Waste
Waste sent off-site
Waste sent to landfill
Waste diverted from landfill Tonnes of waste diverted from landfill
Hazardous waste
sent to landfill
Waste Intensity ratio
Tonnes of hazardous waste sent to landfill
Tonnes of waste sent to landfill per tonne of production
6,570
1,879
3,565
1,126
5,801
1,888
3,709
204
3,490
278
3,034
178
5,945
143
5,605
48
6,524
105
6,370
50
0.001
0.001
0.0002
0.0001
0.0001
Plastic
Plastic Packaging
Intensity ratio
Total tonnes of plastic packaging
Kg of preventable plastic per tonne of production
1,887
0.82
998
0.69
1,476
0.72
1,447
0.69
1,492
0.61
Customer
New & sustainable products % of sales turnover from new and sustainable products
Net Promoter Score
% of customers likely to recommend Ibstock
11.5%
34%
11.7%
39%
13.0%
13.0%
33%
45%
10.8%
32%
Social
Health and safety – LTIFR Number of work-related accidents per million of hours
worked
Number of work-related employee deaths
Number of work-related contractor deaths
Employee deaths
Contractor deaths
Earn and Learn positions % of employees in formal earn and learn training
Number of apprentices
Apprentices
Employee population
Number of employees
Employee diversity – Gender % of all employees that are female
Board diversity – Gender % of the board that are female
Senior leader diversity
– Gender
Employee engagement
Charitable contributions
Best companies score %
Bricks donated to colleges/charities
% of senior leaders that are female
3.4
2.2
2.1
1.47
1.51
0
0
N/A
–
2,350
N/A
N/A
N/A
N/A
N/A
0
0
N/A
35
2,064
15.7%
28.5%
18.5%
0
0
N/A
38
2,119
15.0%
37.5%
19.0%
0
0
7.5%
47
2,293
16.0%
37.5%
27.0%
0
0
6.9%
51
1,943
16.7%
37.5%
35%
N/A
N/A
61.2%
83,094
N/A
>140,000
65%
300,000
In 2023, we have refined our non-mains water use per annum metric to exclude any quantities of non-mains water transferred and not directly used by Ibstock. Therefore, previous year’s figures
for this metric and total water use are not directly comparable.
55
Ibstock Plc | Annual Report and Accounts 2023Additional informationGovernanceFinancial StatementsStrategic Report Task Force on Climate-Related Financial Disclosures (TCFD)
Managing
climate-related
risk
In line with the Task Force on Climate-
Related Financial Disclosures (TCFD),
our assessment and mitigation of
climate-related risk is integrated into
our Group risk management programme,
which underpins our robust, risk-based
approach to the physical and transitional
risks associated with climate change.
TCFD highlights
To provide a meaningful understanding,
we have considered two contrasting
climate scenarios in our analysis
Scenarios considered:
IPCC RCP2.6
Below 2°C
Limits global warming to below 2 degrees
RPCC RCP8.5
>4.3°C
High emission scenario where warming may exceed 4 degrees
Timescales considered:
2023 to 2030
2031 to 2040
2041 to 2050
Climate risk sites
As a new metrics for 2023, we have
assessed each site’s vulnerability
to physical climate change risks.
The vulnerability assessment has
considered river flood and surface
water flood risk.
We have concluded that, without
mitigation, there are 7 sites vulnerable
to physical climate change risk over
the medium term.
Key:
Sites with no significant vulnerability
Sites vulnerable to physical risks
Short term
Medium term
Long term
Read more page 62
56
BeeHabitat BrickIbstock Plc | Annual Report and Accounts 2023 How we have listened
Ibstock has a long-standing commitment to manage
our business responsibly.
We published our ESG 2030 Strategy in 2022 which
focuses on three strategic pillars:
1. Addressing Climate Change
2. Improving Lives
3. Manufacturing Material for Life
We have an ambitious target to reduce our
Scope 1 and 2 carbon emissions by 40% by 2030
against a 2019 baseline.
This is our third year reporting on TCFD
How we have acted upon FRC recommendations
Based on our 2022 disclosures, the FRC recommended
that we include more granular, company specific information
on how climate-related issues have affected our financial
planning, and detail whether metrics performance is
progressing in line with expectations. This report
addresses both of these recommendations.
Read more about our ESG Strategy on pages 44
and 45
TCFD content
These climate-related financial disclosures comply with the TCFD recommendations as required by the FCA Listing
Rule 9.8.6R (8) and the requirements of the Companies Act 2006 as amended by the Companies (Strategic Report)
(Climate-related Financial Disclosure) Regulations 2022.
Governance
Our governance structure
on climate-related risks
and opportunities.
Strategy
The actual and potential
impacts of climate-related
risks and opportunities on
the business, strategy
and financial planning.
Risk
management
How we identify, assess and
manage climate-related risks.
• Our Board’s oversight
• Our short-, medium-, and
• How we identify and assess
– page 59
• The role Management takes
– page 59
long-term climate-related risks
and opportunities – page 61
• The impact of climate-related
risks and opportunities on
Ibstock – page 62
• The resilience of Ibstock’s
strategy to different climate-
related scenarios – page 64
climate-related risks – page 67
• How we manage climate-related
risks – page 67
• How climate-related risks are
integrated into our overall risk
management – page 67
Metrics
and targets
The metrics and targets we
use to assess and manage
relevant climate-related
risks and opportunities
• The climate-related risks and
opportunities metrics we used
– page 68
• Our greenhouse gas (GHG)
emissions and the related
risks – page 69
• Our climate-related risks and
opportunities targets and
performance – page 69
Read more p59
Read more p61
Read more p62
Read more p68
57
Ibstock Plc | Annual Report and Accounts 2023Additional informationGovernanceFinancial StatementsStrategic Report Task Force on Climate-Related Financial Disclosures (TCFD)
continued
Alignment to
TCFD requirements
Climate-related Risks
The climate-related financial disclosures made by Ibstock Plc
comply with the TCFD recommendations as required by the FCA
Listing Rule 9.8.6R (8); and the requirements of the Companies
Act 2006 as amended by the Companies (Strategic Report)
(Climate-related Financial Disclosure) Regulations 2022.
Ibstock disclosures are fully consistent with all 11 of the
TCFD disclosure recommendations.
Governance
Disclose the organisation’s governance around climate-related risks and opportunities.
Pages 59 to 61
a. Describe the Board’s oversight of climate-related risks and opportunities.
b. Describe management’s role in assessing and managing climate-related risks and opportunities.
Strategy
Disclose the actual and potential impacts of climate-related risks and opportunities on the organisation’s businesses,
strategy and financial planning where such information is material.
Page 61
a. Describe the climate-related risks and opportunities the organisation has identified over
the short-, medium- and long-term.
b. Describe the impact of climate-related risks and opportunities on the organisation’s
businesses, strategy, and financial planning.
c. Describe the resilience of the organisation’s strategy, taking into consideration different
climate-related scenarios, including a 2°C or lower scenario.
Risk management
Disclose how the organisation identifies, assesses and manages climate-related risks.
Pages 62 to 67
a. Describe the organisation’s processes for identifying and assessing climate-related risks.
b. Describe the organisation’s processes for managing climate-related risks.
c. Describe how processes for identifying, assessing and managing climate-related risks are
integrated into the organisation’s overall risk management.
Metrics and targets
Disclose the metrics and targets used to assess and manage relevant climate-related risks and opportunities, where such
information is material.
Pages 68 to 69
a. Disclose the metrics used by the organisation to assess climate-related risks and opportunities
in line with its strategy and risk management process.
b. Disclose Scope 1, Scope 2 and, if appropriate, Scope 3 GHG emissions and the related risks.
c. Describe the targets used by the organisation to manage climate-related risks and
opportunities and performance against targets.
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Ibstock Plc | Annual Report and Accounts 2023 Ibstock has a long-standing commitment to doing
business responsibly and climate impact is a key part
of the Board’s strategy discussions.
Building on this commitment, we published our ESG 2030
Strategy in 2022. This focuses on three strategic pillars
– Addressing Climate Change, Improving Lives and
Manufacturing Material For Life. The strategy includes
an ambitious target to reduce our Scope 1 and 2 carbon
emissions by 40% by 2030 against a 2019 baseline.
The ESG 2030 Strategy was reviewed during 2023 and the
Board consider that the ambitions set in this document remain
our short-term priorities for managing climate-related risk.
Governance
Our Board has ultimate oversight of climate-related risks and opportunities
This page shows the full governance structure showing how the consideration of climate-related issues is integrated within governance processes.
The Board delegates specific climate-related matters to its Committees and Executive Leadership Team (ELT).
Board Committees and climate change responsibilities
Responsibilities related to climate change
Board Met eight times in 2023
The Board has ultimate oversight for the long-term strategy,
including oversight of climate change related risks and
opportunities and the setting of performance objectives
• Considering climate-related issues as a fundamental part
when planning Group strategy, approving annual budgets
and business plans, making acquisition and divestiture
decisions, and overseeing capital expenditure
• Considering climate-related issues as part of the discussions
on risk management and our principal risks and uncertainties
• Overseeing progress against our ESG ambitions, which align
to our risk mitigation plans to address climate-related issues
Examples
Skills and competencies
Role and responsibilities p83
When setting the 2024 budget and
strategic plan, the Board considered the
requirements and sensitivities for
mitigating transitional and physical climate
change risks
As per the skills matrix
shown on page 88, the Board has
sufficient skills and competencies in
strategy, ESG and financial
planning
Climate and carbon impact is considered as
part of all the Board’s decision-making
ESG Committee Met four times in 2023
Role and responsibilities p92
• Overseeing, challenging and monitoring the ESG 2030
Strategy implementation
• Reviewing performance against KPIs and targets, including
carbon reduction
• Overseeing and monitoring of risks and opportunities
associated with climate change
• Informing the Board on mechanisms to engage wider
stakeholders with regard to ESG
Members of the ESG Committee inform all other Committees about
climate-related issues as key topics are identified or discussed.
At each meeting, the ESG Committee
considers the horizon scanning report
produced by RSM UK Consulting LLP (RSM),
including emerging climate transition risks
The Committee monitored and scrutinised
the development of the carbon reduction
plan and improvements in ESG data quality
Chaired by Claire Hawkings,
who has extensive experience
in sustainability and ESG
RSM provides expert technical
advice to the Committee
Training for the ESG Committee
delivered by RSM, including
biodiversity and nature
related training
Audit Committee Met four times in 2023
Role and responsibilities p94
• Reviews and makes recommendations on risk management
and controls to the Board
• Oversees the internal controls including carbon, and financial
statement review of disclosures
The Audit Committee received a detailed
update on the carbon credits process and
controls, as well as a carbon market update
Consideration of climate impact on accounting
judgements and disclosures, e.g. impairment
The Audit Committee has sufficient
skills and competencies in audit,
controls and strategy. Skill Matrix
on Page 88
Remuneration Committee Met six times in 2023
Role and responsibilities p99
• Aligns LTIP performance to ESG
key performance indicators (KPIs)
In setting the 2024 LTIP performance
targets, the Remuneration Committee
considers the alignment to the ESG 2030
Strategy
The Remuneration Committee has
sufficient skills and competencies in
executive remuneration and ESG.
Skill Matrix on Page 88.
Executive Leadership Team (ELT) Met ten times in 2023
Role and responsibilities of the ELT p83
• Implements and delivers the ESG 2030 Strategy
During day to day strategic and operational
decisions, the ELT considers the alignment
to the ESG 2030 Strategy
The ELT has sufficient strategic,
operational and management
experience to implement and
execute the carbon reduction plan
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Task Force on Climate-Related Financial Disclosures (TCFD)
continued
We have included a focus on our Carbon Transition Plan throughout the TCFD report.
Governance of the Carbon Transition Plan
Our Carbon Transition Plan is detailed on page 47.
The ESG Committee monitors and oversees the progress against the goals and targets for addressing climate-related issues
at each meeting by reviewing the ESG KPIs which include carbon reduction, and progress against the milestones set in the
ESG 2030 Strategy. The ESG Committee considers, challenges and recommends changes to the Carbon Transition Plan to
the Board for its approval.
The Board has oversight of the execution of the Carbon Transition Plan, including approval of the plan and climate-related targets.
Management assess and manage climate-related risks and opportunities
The CEO is responsible for assessing and managing climate-related risks and opportunities, and is supported by the ELT to implement
the ESG 2030 Strategy. The ESG 2030 Strategy pillars have an executive-level sponsor and are supported by a Divisional Director.
The ESG 2030 Strategy update is on page 45.
The ELT is supported by a dedicated ESG function with subject matter experts to support other business units, led by the Group
Company Secretary & ESG Director. The ESG team supports upskilling other roles and departments, recognising that all roles
have a part to play in the implementation of the ESG 2030 Strategy. For example, the ESG team supports factory managers
with understanding the carbon emissions from the factory and opportunities to improve carbon reduction.
The reporting structure for management is detailed on page 82.
The cross-functional TCFD working group, which includes members from the ESG function and finance, defines the approach
for identifying and assessing climate-related risks.
The TCFD working group defined the risk gradings, detailed on page 61, to assess the impact of climate-related
risks and opportunities.
Please see page 67 for the risk management process.
The ELT own material climate-related risks and opportunities to ensure there is clear ownership for mitigations.
The ESG team provides monthly updates to the ELT, and quarterly updates to the ESG Committee.
CASE STUDY
Aldridge gas efficiency improvements
Our operations at the Aldridge brick factory produce a range
of highly sought-after products in keeping with the local
vernacular, including the Anglian Red Rustic, for our merchant
market. The factory’s last major upgrade was in the 1960s,
meaning its current gas efficiency was poor. The decision to
replace tired assets was approved in 2022, with the business
case demonstrating production efficiency with associated
energy and carbon savings. An investment of c£12 million has
enabled significant kiln repairs and full replacement of the
dryers, which are now fully automated with robotic product
handling. The work was commissioned and completed in 2023
and the factory began production at the start of 2024 as it
ramps up towards full production in Q1. The early indicators
show we will achieve an approximate gas reduction of 25%
per annum, which equates to a 19%carbon reduction when
compared to the old factory.
c£12m
Investment in tired assets
25%
Approximate gas reduction per annum
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Ibstock Plc | Annual Report and Accounts 2023 Management working groups assessing or managing climate-related risks
Working group
Net Zero Working
Group owns
the Carbon
Transition Plan
Areas of responsibility
• Modelling the effect of carbon reduction initiatives to
• Monitoring progress of the operational efficiency,
produce a Carbon Transition Plan
decarbonised material, and alternative fuel & power
groups in delivering carbon reduction projects against
plan and targets
Example outputs and deliverables
Carbon Transition Plan – see page 47
Group Chair
Group
Company
Secretary
& ESG Director
Clay, Concrete and
Futures operational
efficiency groups
• Developing and implementing operational
efficiencies to drive carbon reduction (e.g. heat
retention and energy usage efficiency)
Divisional
Directors
Clay – Aldridge dryer investment
Concrete – rainwater harvesting to reduce
mains water consumption
Clay, Concrete and
Futures decarbonised
materials groups
• Developing and implementing programmes to
reduce the carbonisation in the materials (e.g. raw
material reduction and circularity)
Divisional
Directors
Alternative Fuel &
Power Group
• Developing and implementing lower carbon sources
of fuel and power (e.g. solar, wind, hydrogen, syngas)
Divisional
Director
Clay – increased void space in bricks at
Cattybrook to take out weight and
embodied carbon
Concrete – roof tiles redesigned to reduce
embodied carbon
Futures – low carbon slip system research
and development project
Successful pilot project to fire bricks using
synthetic gas derived from waste
TCFD working group
• Identify, assess and manage climate-related risks
and opportunities
• Inform and update functions of the business on
the results of the climate change risk assessments
Group
Financial
Controller
Scenario analysis impact to financial
planning
Climate-resilience assessment of every factory
Areas of responsibility are reflected in the Terms of Reference and are reviewed annually.
Strategy
Material risks and opportunities are evaluated by considering their potential impact, financial or reputational, together with their
likelihood. Please see page 67 for further details of the risk assessment process.
Our time horizon and impact definitions are shown below, detailing how these align to our organisation. The scenario analysis principally
focuses on our short-term time horizon, to support our decision making processes on strategy, capital allocation and costs. Beyond this
time period, the scenario analysis has less reliable internal and external data and there is less certainty around the impact of climate-
related risks, as this is greatly impacted by external factors such as the pace and effectiveness of the transition to a lower-carbon economy.
Time horizons considered in climate risk assessment
Short term – To 2030
Medium term – 2031 to 2040
Long term – 2041 to 2050
Aligns to ESG 2030 Strategy
Aligns to medium-long-term
strategy decisions
Aligns to longer-term climate
reduction targets
Impact on Adjusted EBITDA* over time
Low
<5%
Medium
5–15%
High
>15%
The thresholds for quantifying risks based against our strategic and long-term financial forecasts, and aligned to existing
risk management processes.
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Task Force on Climate-Related Financial Disclosures (TCFD)
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Our principal climate risks and opportunities
The following material risks have been identified through considering the impact across the business value chain. All product types,
business functions, customer segments and suppliers have been included in the assessment. Our two Divisions, Clay and Concrete,
experience similar climate risks and opportunities. We have referenced where risks are specific to one Division or sector. Principal risks,
if unmitigated, have the potential to impact Group Adjusted EBITDA* by over 5%.
Climate risks
Climate-related financial risk
CCR1: Increased prices
of carbon credits or
reductions in the number
of ‘free’ allowances
Transition, policy and legal
CCR2: The availability of,
and ability to, transfer to
new energy technologies
Transition, technology
CCR3: Transition to new
building technologies and
approaches redefining
the type and nature of
materials required
Transition, market
CCR4: Maintaining
credibility and value of
the Ibstock brand and
its ESG credentials
against a backdrop of
changing behaviours
Reputation
CCR5: Extreme variability
in weather patterns
such as storms, cyclones,
and floods
Physical, acute
CCR6: Changes in
precipitation patterns
and extreme variability
in weather patterns
Physical, chronic
62
Impact
grading
HIGH
Scenario
with greatest
impact
<2°C
Medium
and long
term
Link to Metrics
and Targets
GHG
emissions
Internal
carbon price
Expected financial impact
Increased costs of carbon credits if
our carbon reduction initiatives are
unsuccessful for our Clay Division. The
allowances for UK ETS are aligned to
a net zero consistent cap from 2024
HIGH
>4.3°C
Medium
and long
term
Capital
deployment
Increased capital costs to transition
to new energy technologies including
syngas and carbon capture and storage
Increased R&D costs to position
business to respond to changes
in technology
Financial and human resources are
required to complete industry trials
Description
• Since our Clay Division is part of
the UK Emissions Trading Scheme
(UK ETS), the rising costs of carbon
credits and the reduction in ‘free’
allowances are likely to increase
costs if internal carbon reduction
initiatives are unsuccessful
• We will be reliant on unproven
technology to transition to net zero,
e.g. carbon capture and storage
• Transitioning to new energy
technologies might require skills
and experience not currently
available in Ibstock and/or
significant capital investment
• Alternative fuels, including syngas
and hydrogen, may increase costs
due to the investment requirement to
migrate to alternative energy sources
• Customers switching to alternative
HIGH
>4.3°C
products with lower embodied carbon
due to regulations or carbon
reduction targets
• Changes in revenue mix from
traditional brick and concrete product
lines to products used within Modern
Methods of Construction (MMC)
• Failure to deliver ESG targets will
damage reputation and credibility
with our key stakeholder groups
Short,
medium
and long
term
Climate-
related
opportunities
Increased R&D costs for new products
Demand changes lead to
reduced revenue
Increased operational costs to
use more recycled content or other
methods to reduce embodied carbon
HIGH
>4.3°C
Medium
and long
term
GHG
emissions
Reduced revenues due to
reputational damage
Water usage
Waste
management
Ability and cost to raise finance
is affected
Physical
climate risks
Reduced revenue from decreased
production capacity
• Disruption to own operations through
LOW
>4.3°C
damage to factories, impacting
employees working on site
• Disruption to supply chain as
suppliers are impacted by acute
physical risks or in transit
Medium
and long
term
Increased operating costs
(e.g. purchasing required for
climate mitigation)
Increased repair costs
(e.g. damage to infrastructure)
Increase in insurance premiums
Increased costs to mitigate impact
of extreme weather patterns and
mitigate impact on land changes
Increased capital or repair costs
(e.g. damage to infrastructure)
Business disruption leading to loss
of revenue
MEDIUM >4.3°C
Medium
and long
term
Physical
climate risks
Water usage
• Increased precipitation may disrupt
own operations water content of
clay requiring more energy during
the production process
• Impact of droughts on water
usage in brick manufacturing
process and drier clay requiring
more energy for extraction
• Increased risks of flooding
may prevent site operations
for several weeks
Ibstock Plc | Annual Report and Accounts 2023 Other risks considered to not be material risks include:
• Increased reporting obligations, data integrity and data assurance requirements
• Poor data availability and comparability on environmental impact and lifecycle analysis of products
• Rising mean temperatures
• Rising sea levels
• New or changing legislation that will directly or indirectly impact our business
• Impact of changing attitudes of investors and financial stakeholders
We will continue to monitor the risks through our TCFD working group.
Climate-related opportunities
Climate-related financial
opportunity
TR1: Production of more
sustainable products
Transition, market
TR2: Changes in customers’
preferences and building
practices resulting in new
and emerging products
and solutions
Transition, market
TR3: ESG transition
Reputation
Description
• We are developing lower carbon products. For
example, redesigning our concrete fencing range
with lower carbon cement and less material whilst
providing the same strength attributes
• Changes in the building approaches or
preferences of customers could lead to
new markets for building products
• The opportunity is managed through close
industry relationships, for example, membership
of the UK Green Building Council
Scenario
with greatest
impact
Impact
grading
HIGH Below 2
Medium
term
HIGH Below 2
Medium
and long
term
Expected financial impact
Increased sales driven from new product
development and Ibstock Futures
Increased sales driven from new product
development and Ibstock Futures
• By demonstrating ESG performance and meeting
LOW Below 2
Lower financing costs
commitments to transition to lower carbon
operations, Ibstock may experience a lower cost
of capital (e.g. through reduced interest costs)
Medium
term
Our approach to scenario analysis
Scenario analysis is a process for identifying and assessing the potential impact of a range of climate scenarios. This is not
designed to deliver precise outcomes or forecasts but has been used by our teams to assess strategic resilience and support
business planning decisions.
Our scenario analysis is integrated into our strategic planning cycle, including financial forecasts, and covers our operational footprint.
We have considered two contrasting climate scenarios to provide a contrasting perspective – one below 2 degrees scenario and
a failed transition. This is consistent with the scenario analysis approach within our sector.
We have a detailed strategic plan to 2030 that has been used within the scenario analysis. The full scenario analysis extends to 2050,
however, the data available for this timeframe is less sophisticated.
CASE STUDY
Lowering the embodied carbon of our roof tile range
To respond to market opportunities for lower carbon productions, during 2023, Ibstock launched a new improved SL8 roof tile
which is a large format tile with the visual aesthetics of a slate tile. Within this product, carbon reduction has been achieved
through a new tile mix design used in conjunction with lower carbon cement to provide a strong and durable, lower carbon
product. The large format design also provides roof coverage using less materials and is a lighter load for transportation.
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Approach to scenario analysis
Climate scenario
Below 2 degrees
Data sets considered
IPCC RCP 2.6
Above 4.3 degrees
RPCC RCP 8.5
Description
of scenario
Limits global warming to below 2 degrees
High emission scenario where warming may exceed 4 degrees
Increased transition risks depending on pathway
to meet emission reduction target
Lower transition risks as there is no further action
on climate change
Projected carbon price in 2035: USD450.9
Projected carbon price in 2035: USD25.2
Assumptions that
apply to all scenarios
• Current market share is consistent with performance today
• The location of factories and quarries is consistent with today’s footprint
• Acceleration of the removal of carbon credits within UK ETS for the Clay Division
• Capital and research and development investments increase in both climate scenarios
Data sets used
IPCC
2021 Climate Biennial Exploratory Scenario for transition risks
UK CP18 Met Office projection for physical risks
Scenario analysis results
The tables that follow show the results of our scenario analysis and the strategic response. The financial impact represents the
expected impact to Adjusted EBITDA* and cost impact. The output is aligned to the risk thresholds on page 61. Overall, the results
of the scenario analysis indicate the unmitigated physical and transition risks and opportunities will have an impact on the business
strategy, however, as our business strategy includes mitigating factors to these risks, Ibstock remains resilient to the assessed risks.
The highest-impact risks overall are the transition to new building technologies and approaches to redefining the type and nature
of materials required and maintaining the credibility and value of the Ibstock brand and its ESG credentials against a backdrop
of changing behaviours. This scenario analysis was refreshed and further developed during 2023.
Below 2 degrees scenario
Risks/opportunities with
greatest impact in scenario
• Increased prices of carbon
credits or reduction of free
allowances over time
• Availability of new, and
the ability to transfer to
new, energy technologies
due to the lack of, or
failed, investments
• Development of new
sustainable products
and services to satisfy
customer demand
• Willingness to pay for low
carbon solutions. Change in
customer preferences and
building practices resulting
in new and emerging
markets developing
How the risk is modelled
The carbon price is projected to increase yearly with the removal of free allowances, impacting the Clay Division
which operate within UK ETS. We have used data from the Bank of England projected shadow price, and an
accelerated removal of free allowances.
We have assumed research and development costs will increase, and there is also an increased risk of
impairment of assets.
We have assumed there will be an increase in sales volume for clay and concrete as a result of increased
demand for new and sustainable products, including Futures, to grow sales until 2050.
Impact from scenario analysis
In the short to medium term, unmitigated transition risks present the greatest risk to financial performance.
The highest impact risks are:
• Increased prices of carbon credits or reduction in free allowances: Our scenario assumes carbon-free allowances
decline to 50% by 2030 with additional increases of costs in line with climate pathways outlined by the Bank
of England.
• Availability of new, and the ability to transfer to new, energy technologies due to the lack of or failed investments.
Our scenario analysis assumes that we have not met our carbon reduction objectives and are required to
purchase additional carbon credits at a higher credit cost.
• Development of new sustainable products and services to satisfy customer demand. The scenario assumes
a 20% sales volume increase for Clay and Concrete Divisions from 2023 to 2050.
Strategic response
• The carbon reduction transition plan is a high-level, quantified action plan, including the financial cost
and expected carbon reduction from planned initiatives. Achieving the carbon reduction transition plan
will reduce the risk exposure to carbon prices.
• We are creating strategic partnerships with suppliers to develop alternative fuels, including synthetic gas,
as a lower carbon alternative to natural gas.
• Developing products to reduce virgin materials and increase recycled content contributes to circularity
and reduces carbon emissions.
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Ibstock Plc | Annual Report and Accounts 2023 Above 4.3 degrees scenario
Risks/opportunities with greatest impact in scenario How the risk is modelled
• Maintaining credibility and value of
the Ibstock brand and ESG credentials
We have assumed a decrease in sales volume and no increased move to low embodied carbon
bricks. There is also an increased cost of financing linked to Bank of England projections.
• Increased severity of precipitation patterns
and extreme variability in weather
• Transition to new building technologies
We have assumed a loss of production at seven of our factories that we have assessed as having
an increased risk identified through UK CP18 projections. We have modelled an increased loss of
production as we progress between the medium and long term. The loss of production increases
until 2050.
• Redefining the type and nature
of materials required
Impact from scenario analysis
In the medium to long term, physical risks also present a risk to financial performance.
The highest impact risks are:
• Transition to new building technologies and approaches to redefining the type and nature of
materials required. Our scenario assumes a 30% decrease in sales volume from 2024 to 2030
for the Clay and Concrete Division. Maintaining credibility and value of the Ibstock brand and
its ESG credentials against a backdrop of changing behaviours. Our scenario assumes there will
be a reduced demand for products and services and being unable to raise finance to fund the
transition to net zero. There is increased cost of financing modelled using the Bank of England
scenarios. Financing costs increase by 12% in 2030.
• Increased severity of precipitation patterns and extreme variability in weather. Our scenario
assumes a one to two month lost production for red and amber surface and river flood risk factories.
Strategic response
• We have piloted individual climate resilience plans. All other factories have an emergency
response plan. For factories with the highest risk, we have an individual climate resilience plan.
All other factories have a business continuity plan that considers processes in light of business
disruption that can be applied during a climate event.
• Trialling hot weather Personal Protective Equipment (PPE) at one site during the summer to
improve working conditions in periods of extreme heat.
• Implementing a feedback process for improvements and mitigation actions following climate impacts.
For example, after a factory flooded this year, we shared a case study across the business summarising
learning points and good practice, including drainage ditch and settlement pond maintenance.
• Investment in rainwater harvesting systems continues. For example, our Northwich factory saved
600m3 of mains water in 2023.
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Impact on business, strategy and financial planning
This year, Ibstock has made progress against the ESG 2030 Strategy, which includes:
• The creation of a high-level carbon reduction transition plan. This has been summarised on page 47
• The completion of an environmental data discovery project to understand, simplify and enhance the environment data framework
in the business to achieve a single source of truth for sustainability data
• Diversification of the product mix, led by research and development through Ibstock Futures. We have a 20% revenue target from
new and sustainable products by 2030
• Integrating Life Cycle Analysis into our new product development (NPD) decision making
• The inclusion of a high-level assessment of financial commitments to deliver our carbon reduction plan and mitigate our climate
related risks within our financial planning
Operations were impacted by two localised flooding events that stopped production for less than a week combined. Following the
event, additional processes and/or emergency response plans will be adopted to reduce the impact of floods and alert the business
to severe weather events by enhancing the climate resilience plans.
We have considered the potential impact of identified climate change risks and opportunities through our indicators of impairment
reviews and also assessment of useful economic lives of assets. There are seven sites deemed to be vulnerable to physical risk over
the medium term. Management expects any changes required due to climate change will be covered through maintenance and
refurbishment spend and phased over multiple years. Therefore, the related cash outflow would not be material in any given year.
With no mitigations in place, management expects the carbon costs will increase in the future but would impact the whole industry.
We would expect any carbon-related costs to increase the sales price and there would be no material impact in the forecast cash
flows. See the Metrics and Targets for the investment in the low carbon transition made in the year and the impairment and PPE
notes for further information.
Due to economic conditions, factories have been closed in the year to reflect reduced demand. A number of factors were considered
during the decision-making process, including carbon management.
An internal carbon price was developed this year and will be embedded into strategic decision-making in 2024, including major capex
projects and new produce development (NPD). The carbon price is a shadow carbon price based on the UK ETS carbon price, as our
Clay factories are covered by the regime. However, we will take an average for the year due to short-term variability in the market price.
The internal carbon price covers all the business over Scope 1 and 2 emissions.
The internal carbon price will be used for the following processes:
• Position management for the valuation of assets to inform replacement and maintenance schedules
• Investment decisions, including new capital expenditure to assess carbon savings
• Impact of new product development for reduced embodied carbon
Capital expenditure and new product development processes currently assess the impact of carbon emissions savings, but this is not
quantified using the internal carbon price. This is a planned action for 2024.
The UK ETS carbon price is expected to increase over time and this trend is reflected in our scenario analysis. In 2023, the average
carbon price under UK ETS was £83.03.
CASE STUDY
Developing our carbon reduction transition plan
The high level carbon reduction transition plan includes actions in the short, medium and long term to reduce carbon emissions
with financially quantified impacts. During 2024, this plan will be further developed through establishing a detailed and fully
costed 5-year decarbonisation plan at every Clay site.
The transition plan supports <2 degrees pathway and is aligned to industry transition pathways.
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Ibstock Plc | Annual Report and Accounts 2023 Identifying and assessing climate risks and opportunities
Climate change is a principal risk to Ibstock and has been integrated into the enterprise risk management processes. Climate change
is therefore assessed and managed in line with Ibstock’s risk management framework, as detailed under the governance pillar and
on page 59.
However, we recognise that climate change risks and opportunities are complex and can crystallise over a longer time period than
typically considered in our enterprise risk management processes. Therefore, we have a specialist climate related risk assessment
process which provides the framework for identifying material climate-related risks and opportunities, ensuring that climate-risk
considerations are reviewed appropriately, and the outputs and considerations are fed into the broader risk management processes
of the Group. This involves a working group of subject matter experts, advisers, and representatives from around the business.
The process to identify and assess climate-related risks includes:
1. A long list of climate-related risks and opportunities and consideration of horizon-scanning reports for legislation and policy risk
across all revenue streams.
2. Climate-resilience assessments at each factory to support physical climate risk assessment.
3. Impact on stakeholders, including investors and employees, is considered.
4. Expected financial impact and areas of value chain impacted by the risk is documented.
5. Impact from scenario analysis, or qualitative review of potential impact where data is not available (e.g. reputational risks).
The climate-related risks and opportunities are assessed for impact and likelihood, and shown on heat maps after considering
mitigations. The principal risks are shown on page 22.
Following the completion of the risk management review, each risk is considered relative to its residual rating having taken into
account all existing controls.
Managing climate-related risks
The climate change risks are graded as low, medium and high risk. Principal risks have at least one ELT member assigned as the risk
owner. The working groups on page 61 also have responsibilities to manage climate risk.
With recognition of the nature of our industry, Ibstock has set a low to medium risk tolerance and has a robust process to identify any
changes to the risk landscape, agreeing proportionate further mitigating actions where appropriate. As documented on page 22,
Ibstock has a three lines of defence structure to the internal controls. This extends to climate change risk. The first line of defence is
operated by management and covers the day-to-day risk management activities of implementing and executing internal controls.
This extends to a risk register for factories, including carbon reduction and resilience to climate change risk.
The second line (health and safety, quality control and other central functions) works alongside the risk owners to support the
design and implementation of the controls framework, whilst the independent third line is operated by our outsourced Internal
Audit provider, RSM UK Risk Assurance Services LLP (RSM).
Integration into risk management processes
As noted above, the climate change risks are integrated into the enterprise risk management processes, with climate change being
a principal risk. In addition, a climate risk assessment takes place to ensure all climate risks and opportunities are captured through
the process. Climate change is considered as part of the operational risk registers at the half and full year. The results are reviewed
and mapped to the principal risk register. The ELT reviews the risk register ahead of review by the Audit Committee and Plc Board.
Ibstock applies the same risk thresholds and risk appetite for climate change-related risks.
67
Ibstock Plc | Annual Report and Accounts 2023Additional informationGovernanceFinancial StatementsStrategic Report Task Force on Climate-Related Financial Disclosures (TCFD)
continued
Metrics and targets
The table below shows the metrics used to monitor climate risks and opportunities. The metrics cover both transition and physical
risks, as illustrated through the aligned risks. We recognise that our carbon reduction journey may not always be linear and that
investments may take some time and effort to fully embed within our manufacturing processes. We consider ourselves to be on
track to deliver our 2030 ESG targets.
In determining the metrics, Ibstock has considered the all sector- and industry-specific guidance. As a business that uses a large
amount of energy, carbon reduction is a key metric and KPI of the business.
Category
GHG emissions
GHG emissions
Metric and target
40% reduction in Scope 1
and 2 carbon by 2030
based on 2019 benchmark.
Net zero carbon emissions
by 2040 (Scope 1 and 2).
Net zero carbon includes Scope 1 and
2 emissions, and less than 10% of the
reduction is delivered through carbon
credits or carbon capture and storage.
Carbon intensity – Intensity (tCO2e)
per tonne of production
GHG emissions
Scope 3 carbon emissions
net zero before 2050.
Physical
climate risks1
Climate-related
opportunities
Capital
deployment
Number of sites vulnerable
to physical risks
We have assigned each factory a
climate risk grading for flood risk,
extreme temperature and precipitation.
Proportion of revenue, assets or
other business activities aligned
with climate-related opportunities.
20% of revenue from new and
sustainable products by 2030.
Amount of capital expenditure
and investment deployed towards
climate-related risks and opportunities.
Internal
carbon price
Price of each tonne of GHG
emission used internally
Water usage
25% reduction in mains
water usage by 2030
based on 2019 benchmark.
Waste
management
Remuneration
Zero waste to landfill by 2025.
20% of Long Term Incentive Plan
is assessed on ESG factors:
• Carbon emission reduction
• % female leadership
• % sales from new and
sustainable products
Linked climate risk or opportunity
Increased prices of carbon
credits or reductions in the
number of ‘free’ allowances.
Explanation of movement
Scope 1 and 2 carbon emissions reduced by
37% during 2023 versus the 2019 baseline.
This was driven by the reduction of carbon
used during our production processes as well
as decreased production volumes during 2023.
Increased prices of carbon
credits or reductions in the
number of ‘free’ allowances.
Increased prices of carbon
credits or reductions in the
number of ‘free’ allowances.
Changes in precipitation
patterns and extreme variability
in weather patterns.
Production of more
sustainable products.
The carbon intensity metric for 2023 was
0.151 tonnes of carbon per tonne of production,
an increase since 2022 due to the estate running at
a lower efficiency as the market slowed. We expect
continued incremental improvements in carbon
reduction during 2024 and for energy and carbon
operational efficiencies to benefit factories when
the market returns and they return to full capacity.
Scope 3 has been calculated using spend-based
emission factors.
Seven our sites are vulnerable to physical risks
by 2050.
As this is a new metric for FY23. We are working
to decide an appropriate target and timescale.
During 2023, 11% of revenue came from new
and sustainable products. More information
on this is given on page 50.
Production of more
sustainable products.
Investment in climate resilience.
This is a new metric for FY23.
Expenditure is in investment in R&D for low
carbon products and services.
The internal carbon price is aligned to UK ETS price
as brick sites are part of the UK ETS scheme. During
2023, we used the internal carbon price of £83.03.
Water consumption increased during 2023
due to improved data accuracy and one factory
unable to use quarry water in 2023 (this issue
has been resolved).
Waste to landfill decreased in 2023 due to
lower production and closer working with waste
management providers to prioritise segregation
and materials recycling.
The outcomes of the 2021 LTIP scheme is
described on page 110.
Changes in precipitation
patterns and extreme variability
in weather patterns.
Increased prices of carbon
credits or reductions in the
number of ‘free’ allowances.
Supports the success of
the Carbon Transition Plan
and reduces water stress
in periods of drought.
Supports the Carbon Transition
Plan and circularity principles to
develop lower carbon products
to meet customer demand.
Drives the leadership
behaviours to support the
success of the Carbon Transition
Plan including development
of lower carbon products to
meet customer demand.
1 Following a review of Ibstock’s transitional risks, we have concluded that a metric and target around site level transitional risk is inappropriate as these risks will be managed, mitigated
and governed at a Group level.
68
Ibstock Plc | Annual Report and Accounts 2023 We have verification of over 90% of our Scope 1 and 2 emissions by Lucideon CICS. Lucideon CICS are accredited to ISO 14065
by the United Kingdom Accreditation Service (UKAS) to provide independent third-party verification and verify of our emissions
as part of compliance with UK ETS to ISO 14064-3. The Scope 1 and 2 emissions are included in the SECR disclosure on page 54.
Scope 3 emissions are on page 54.
The related risks around achieving carbon reduction for the scope of emission:
Scope 1
Scope 2
Scope 3
Failure to transition away from natural
gas in manufacturing processes.
Ibstock are investing in trialling
syngas and hydrogen.
Please see page 47 for transition plan.
Failure to reduce energy consumption
leading to increased energy costs.
Please see page 47 for transition plan.
Aligns to longer-term climate
reduction targets.
The ESG team prepares an ESG data dashboard including the following metrics:
• Carbon emissions
• Water usage
• New product development
This is reviewed by the ELT and the ESG Committee four times a year. The ESG team provides an overview of progress towards the
targets, including any challenges or risks.
The carbon reduction target is also considered by the Net Zero Working Group. The carbon targets were recommended by the ELT
and approved by the ESG Committee as part of the ESG 2030 Strategy that was set in 2022. The targets were aspirational and
leading within our sector. Our Carbon Transition Plan provides an analysis to demonstrate the 2030 target remains achievable.
Please see page 47 for the transition plan summary.
Performance against our 2023 priorities
The Board and ESG Committee will continue focusing on
delivery of the ESG 2030 Strategy, and closely monitor
the effectiveness of the ESG governance framework
Continue upskilling the Board and the ESG Committee
with respect to the ongoing development of the climate
change landscape
Continued focus to embed climate change initiatives
within the business so that management of climate-
related risks becomes part of the Group’s culture
Further climate change risk analysis and
mitigation training
Continued horizon scanning and enhanced risk planning
• The Board and ESG Committee considered performance against the ESG 2030 Strategy
during the year
• The governance framework has been reviewed, including the management working groups
• The ESG Committee receives a bespoke horizon scanning report four times a year that
includes developments in the climate change landscape
• In addition, the Board received training on biodiversity, nature loss and climate change
• Short training sessions have been made available for employees, including procurement
and the sales team. For example, training through the Supply Chain Sustainability School
• Factory managers have informed the climate change risk assessments, and subsequent
mitigations including business continuity plans
• The ESG Committee receives a bespoke horizon scanning report four times a year that
includes developments of the climate change landscape
Supply chain visibility and resilience
• A supply chain climate risk assessment has been undertaken. Further work is required to
strengthen the resilience in 2024
Continue to develop our approach to impact assessment
and scenario analysis
• The scenario analysis approach includes EBITDA impact and cost impact
• The approach to scenario analysis has used additional third party data to strengthen
quality of assessment
Deliver our augmented suite of reporting metrics
• We have reported against all metrics this year, including improved granularity in Scope 3
emission numbers
Priorities for 2024
We believe that we have complied with the requirements of TCFD and are starting to adopt climate change into business decision-
making. We recognise that there are always improvements to make. Therefore, the 2024 priorities include:
• Complete a gap analysis in preparation for adopting IFRS ISSB S1 and S2
• Consider the integration of nature-related risks and opportunities within climate risk assessments
• Apply the internal carbon price in financial and business processes, starting with new product development and capital expenditure
• Develop our approach to supply chain resilience further
• Develop our approach to understand the impact of climate change on the quarries
• Develop a circular economy approach integrated into new product development
• Develop and prioritise carbon transition plans at site level
69
Ibstock Plc | Annual Report and Accounts 2023Additional informationGovernanceFinancial StatementsStrategic Report Viability and Going Concern Statements
Background
The Board’s assessment of the longer-term
viability of the Group is an integral part
of our business planning processes.
These processes include financial
forecasting and risk and opportunity
management, as well as longer-term
scenario planning incorporating potential
future economic conditions, market trends,
emerging opportunities or threats and
the potential impact of climate change.
The output of the Group’s business
planning processes reflects the best
estimate of the future prospects of the
business based on a range of possible
future scenarios. To make an assessment
of viability, these forecasts are rigorously
stress tested based upon potential adverse
impacts arising from the Group’s principal
risks and uncertainties, which are outlined
on pages 22 to 26, in severe but plausible
scenarios which test the Group’s resilience.
Assessment
Management’s viability exercise, reviewed
by the Audit Committee on behalf of the
Board, has robustly assessed the market
conditions, risks and the liquidity and
solvency of the Group, including
consideration of the wider economy and
future uncertainty. The Group has leading
positions within the markets in which it
operates, as noted on pages 12 to 13, and
its business strategy (see page 16)
is aimed at continuing to strengthen its
position in those markets, create value for
its shareholders and ensure its operations
and finances are sustainable.
Lookout period
The Group may use longer-term time
horizons for the purposes of investment
decisions and capital allocation given
its markets and construction timeframes.
However, the Directors believe that a
three-year period provides the most
appropriate horizon over which to
assess viability. The performance of
the building products industry is sensitive
to the broader level of macroeconomic
activity, which is influenced by factors
outside of the Group’s control, including
demographic trends, the status of the
housing market, mortgage availability,
interest rates, changes in household
income, inflation and also Government
policy. These macroeconomic drivers
are currently producing a period of
prolonged uncertainty.
70
The Group’s financing consists of £100 million
of private placement notes from Pricoa
Private Capital, with maturities between
2028 and 2033, and a £125 million
Revolving Credit Facility (RCF) with a
syndicate of five banks which matures
in Q4 2026, and £25 million was drawn
at 31 December 2023.
Stress testing
Although each of the Group’s principal
risks has a potential effect and has
been considered as part of the overall
assessment, only those that result in a
severe but plausible scenario have been
modelled. The Group’s viability modelling
has stress tested the annual budget and
strategic plan in the following scenarios,
both individually and in combination.
The Group’s viability assessment also
considered two compound scenarios
whereby firstly the Group experienced
reputational damage during an
economic downturn and secondly the
Group experienced business disruption
during an economic downturn.
The Group’s viability assessment also
included a sensitivity involving a reverse
stress test to understand the Group’s
resilience through establishing the
financial headroom that exists before
viability is threatened. This was conducted
by reducing profitability due to reducing
industry demand for the Group’s products
and therefore sales.
Assumptions
In determining the viability of the Group,
the Board made the following assumptions:
• The economic climate in which the
Group operates remains in line with a
broad consensus of external forecasts;
• There is no material change in the legal
and regulatory frameworks with which
the Group complies;
• There are no material changes in
construction methods used in the
markets in which the Group operates;
• The Group’s risk mitigation strategies
continue to be effective; and
• The Group’s past record of successfully
mitigating significant construction
industry declines can be replicated.
Scenario 1
Economic downturn
Link to risk
• Risk 6 – Economic conditions
• Risk 10 – Anticipating product
demand and innovation
The impact of a severe and prolonged
reduction in demand for its products
on the basis of reduced house building
activity arising from either a macroeconomic
downturn or negative impacts of geopolitical
events; unexpected changes to Government
policy resulting in reduced volume of
product sold; or future impacts on customer
activities as a result of COVID-19 or other
pandemic, as well as a benign environment
of prolonged price stagnation on sales.
This considered a demand reduction of
40% for the Clay and Concrete products
in 2024 versus 2022, recovering to a 28%
reduction in 2024 and 23% reduction
versus 2022 in both Divisions thereafter,
representing a gradual recovery after the
first year.
Given the current systemic under supply
of housing stock, the Directors believe any
reduction in underlying demand above
these levels would lead to Government
stimulus to underpin levels of new-build
housing. The Group has proven mitigating
strategies including the mothballing or
closure of production facilities, together
with the reduction of shift patterns at
other factories, thereby providing flexibility
if the market returns more quickly.
Scenario 2
Production cost increases
Link to risk
• Risk 2 – Regulatory and compliance
• Risk 6 – Economic conditions
• Risk 7 – Financial risk management
• Risk 9 – Climate change
A situation whereby the cost of production
for all products increases by 10% and 20%
for energy and 25% for carbon (recognising
the material increase included in the budget
and strategic plan) as a result of inflationary
input cost rises across the Group arising from
economic uncertainty, geopolitical events,
or additional regulatory costs imposing
additional cost within the production process
arising from climate change related increases
or tariffs, in the remote scenario whereby
the Group is unable to pass on these costs
to customers. This is based on historical cost
inflation and price volatility seen in wholesale
energy markets.
Ibstock Plc | Annual Report and Accounts 2023 Viability Statement
Based on their assessment of prospects
and viability above, the Directors confirm
that they have a reasonable expectation
that the Group will be able to continue
in operation and meet its liabilities as
they fall due over the three-year period
ending March 2027.
Going Concern
The Directors also considered it appropriate
to prepare the financial statements on the
going concern basis, as explained in the
basis of preparation paragraph in Note 1
to the financial statements.
The Group seeks to mitigate and improve
resilience to this scenario, through operating
a policy of forward purchasing its energy
requirements to lock in the costs of production
to inform price negotiations with its customers
and adopting a dynamic pricing strategy
in relation to inflationary cost increases.
Further, production plans could be flexed
to reduce the available product range,
either to focus upon more energy efficient
products or to reduce changeovers at
factories, which would provide mitigating
production efficiencies.
Scenario 3
Disruption in business activities
Link to risk
• Risk 1 – Business continuity
• Risk 4 – Cyber and information systems
• Risk 9 – Climate change
The impact of an event, such as prolonged
weather events as a result of climate
change (for example mean temperature
changes, water stress, storms or flooding),
a cyber attack, local/national restrictions
on the ability to work or other unanticipated
event, which prevents production at one or
more of the Group’s facilities and therefore
prevents customer demand being met.
This specifically models the consequences
of a significant production facility (Eclipse)
being unable to produce for a prolonged
period and also an outage at factories
vulnerable to the climate-related physical
risk of increased precipitation for a period
of 1 month as identified in the TCFD risk
assessment. The impact of which would
represent around 30% of production.
The Group aims to mitigate the risk
associated with disruption through its
business continuity and climate change
resilience plans, which operate at a factory
level, and its ability to transfer some of its
production across its network of facilities.
Scenario 4
Reputational damage
Link to risk
• Risk 3 – People and talent management
• Risk 8 – Maintaining customer
relationships and market reputation
A scenario whereby the Group’s reputation
is damaged, as a result of customer
relationship breakdown, significant
employee disengagement or product
quality issues, resulting in a sudden
reduction in sales activity. The scenario
modelled includes a reduction in revenue
of 10% for a period of three years,
representing potential impact or price
reduction to maintain customers.
The Group seeks to mitigate the risks of
reputational damage on an ongoing basis
with its internal control framework and
series of independent reviews and audits.
The Group’s viability assessment also
considered two compound scenarios
whereby the Group experienced
reputational damage during an
economic downturn and business
disruption during an economic downturn.
The scenarios also consider the covenants
with respect to the Group’s borrowings,
ensuring these thresholds are met.
The scenarios are hypothetical and
severe for the purpose of creating
situations that have the ability to
threaten the Group’s viability.
The results of the stress testing
demonstrate that, due to the Group’s
cash-generative nature and access to
its RCF, it would be able to withstand
the impacts of these scenarios and
remain cash generative.
Strategic Report
The Strategic Report on pages 2 to 71
has been approved and signed by order
of Board by:
Becky Parker
Group Company Secretary
5 March 2024
71
Ibstock Plc | Annual Report and Accounts 2023Additional informationGovernanceFinancial StatementsStrategic Report Governance
Governance
at a glance
Documents available at: www.ibstock.co.uk
• Ibstock Plc Articles of Association
• Matters Reserved to the Board
• Terms of Reference for Board Committees
• Board Diversity and Inclusion Policy
• Modern Slavery Statement 2023
• Tax Strategy 2023
• Gender Pay Gap Report 2023
• Notice of Annual General Meeting 2024
• Whistleblowing Policy
1
2
5
2
3
3
5
3
3
5
Composition of the Board
Chair
Executive Directors
Non-Executive Directors
Length of tenure
0-3 Years(cid:22)
3-6 Years
6-9 Years(cid:22)
Age
Under 50(cid:23)
50-60
60-70
70+(cid:23)
Gender
Female
Male
72
Compliance to the UK Corporate
Governance Code
The Corporate Governance Report, including the Committee Reports
and Directors’ Report, explains how the Board has applied the
principles and complied with the provisions of the UK Corporate
Governance Code 2018 (the Code).
The Code is available to view on the website of the Financial
Reporting Council at www.frc.org.uk.
The Board believes that, throughout 2023, the Company has
applied the principles and complied with all the provisions
of the Code.
The table below sets out where the key content can be
found in this report.
1. Board Leadership and Company Purpose
IFC Purpose statement
14 Our business model
38 Stakeholder engagement
42 Section 172(1) Statement
78 Culture, purpose and values
80 Activities of the Board
2. Division of Responsibilities
74 Board of Directors
82 Our governance framework
83 Roles and responsibilities
3. Composition, Succession and Evaluation
87 Nomination Committee Report
91 Gender balance of senior management
89 Appointments to the Board
88 Board skills and attributes
84 Board evaluation
91 Diversity and inclusion
4. Audit, Risk and Internal Control
94 Audit Committee Report
22 Managing our risks
120 Directors’ Responsibility Statement
70 Viability Statement and going concern
5. Remuneration
104 Aligning remuneration and culture
99 Remuneration Committee Report
The Corporate Governance Statement (Pages 72 to 98 has been
approved and is signed by order of the Board by:
Becky Parker
Group Company Secretary
5 March 2024
Ibstock Plc | Annual Report and Accounts 2023
Chair’s introduction to Governance
Introduction
to Governance
“On behalf of the Board, I am pleased to
introduce Ibstock’s Corporate Governance
Report for 2023.”
Jonathan Nicholls
Chair
Compliance with the UK
Corporate Governance Code
The Board operates in accordance with
the UK Corporate Governance Code 2018
(the Code) and is committed to delivering
long-term sustainable value to our stakeholders.
This Corporate Governance Report, together
with the Committee Reports and other
sections of the Strategic Report, sets out in
detail how the principles and provisions of
the Code have been fulfilled and how the
Board and its Committees have discharged
their responsibilities for ensuring robust
governance practices throughout the Group.
2023 highlights
Throughout 2023, the Board and its
Committees have played a key role in guiding
the Group through a challenging year, by
both supporting management and, where
appropriate, providing necessary challenge.
All of the Directors take pride in the discharge
of our Board duties and responsibilities in a
transparent, open and honest manner, and
we are heartened that this continues to be
reflected by senior management and across
the Group.
Our aim is to ensure that good governance
extends beyond the Boardroom and is
continually borne in mind as part of the
successful delivery of the Group’s strategic
pillars over both the short and long term.
Culture
Ibstock has always had a strong, collegiate
culture and this is promoted by the Board. In a
challenging economic climate where decisive
and wide-reaching cost reduction action
was required, the Board was pleased by the
approach taken from all involved, with the
focus on supporting our colleagues during
this difficult period in line with our culture.
External Board Effectiveness Review
This year, the Board commissioned an
External Board Effectiveness Review, which
provided reassurance that the Board and
Committees were effective in discharging
their duties as well as offered some useful
recommendations that we will action during
2024. Page 84 details the findings from
this review.
Non-Executive recruitment
and Board succession
The Board recognises the need to maintain
an effective succession plan for both Board
and senior management positions. Throughout
the year, following a carefully managed
recruitment process, we appointed Nicola
Bruce as Non-Executive Director and Chair
of the Remuneration Committee to replace
Tracey Graham who stepped down at our
2023 Annual General Meeting (AGM).
Louis Eperjesi replaced Tracey Graham
as the Senior Independent Director from
the conclusion of the 2023 AGM.
As this is now my eighth year as Ibstock’s
Chair, the Nomination Committee recognises
the need to ensure an effective succession
plan for the role of Board Chair. As such, it
was agreed to commence a Chair recruitment
exercise during 2024 with the aim of
allowing a handover period for the new
Chair ahead of commencing the role
following the 2025 AGM.
Diversity
We are committed to promoting equal
opportunities in employment and improving
the diversity of our workforce. The Board
recognises that gender diversity is a wider
issue within our industry, with many of our
roles, especially those which are factory based,
traditionally being less popular with females.
Motivated by this historical challenge, we
remain committed to further improvement
of our diversity statistics. We also note the
diversity data collection activity during the
year to better understand other elements of
diversity within our workforce to enable future
targets to be established.
The Board supports the aims and objectives
of the Listing Rules (LR 9.8.6R(9)) and the
FTSE Women Leaders Review, striving to
achieve an appropriate balance of women
on our Board and in senior positions
throughout the Group. Whilst we recognise
that the appointment of Louis Eperjesi as
Senior Independent Director has resulted
in us not having at least one woman in the
Chair, Senior Independent Director, Chief
Executive Officer or Chief Financial Officer
role, we remain committed to ensuring
that diversity is a key consideration in
our appointment process.
Jonathan Nicholls
Chair
5 March 2024
73
Ibstock Plc | Annual Report and Accounts 2023Additional informationFinancial StatementsGovernanceStrategic Report Board of Directors and Company Secretary
Our highly experienced
Board of Directors
Key to Committee
membership:
Nomination Committee
Remuneration Committee
Audit Committee
ESG Committee
Chair
Board members left to right
Nicola Bruce
Peju Adebajo
Justin Read
Christopher McLeish
Joe Hudson
Jonathan Nicholls
Becky Parker (Company Secretary)
Claire Hawkings
Louis Eperjesi
Jonathan Nicholls BA (Hons), ACA, FCT
Chair
Date appointed to the Board:
22 September 2015
(Chair since 24 May 2018)
Joe Hudson BA (Hons), FCIPD
Chief Executive Officer
Date appointed to the Board:
2 January 2018
(CEO since 4 April 2018)
Christopher McLeish BSc, ACA
Chief Financial Officer
Date appointed to the Board:
1 August 2019
Louis Eperjesi
Senior Independent Director
Date appointed to the Board:
1 June 2018
Tenure on Board:
8 years 5 months
Tenure on Board:
6 years 2 months
Tenure on Board:
4 years 7 months
Tenure on Board:
5 years 9 months
Committee memberships:
Committee memberships:
Committee memberships:
Committee memberships:
Independent: On appointment
Relevant skills and experience:
Degree in Economics and Accounting
awarded by Manchester University.
Member of the Institute of Chartered
Accountants in England and Wales,
having qualified with KPMG in 1982.
Fellowship member of the Association
of Corporate Treasurers. Over 20 years’
experience at the senior management
or director level of businesses, including
those in brick manufacturing, roofing
and construction, and property
development. Significant experience
as CFO and other senior finance roles
in public companies.
Current external appointments:
• Shaftesbury Capital PLC –
Chairman (appointed
September 2016).
Past board roles include:
• SIG plc – NED
• DS Smith plc – SID
• Great Portland Estates plc – SID
• Hanson plc – CFO
• Old Mutual plc – CFO
Independent: No
Relevant skills and experience:
BA (Hons) Degree in Education
awarded by the University of Exeter.
General Management programmes at
INSEAD and London Business School.
Fellow of the Chartered Institute of
Personnel and Development.
Varied international career in general
management, operations and
strategic human resources in Europe,
North America and Africa. Operational
line management experience in
cement, plasterboard, concrete products
and construction materials. Experience
of large scale business combinations.
Current external appointments:
• Director (Officer) of Construction
Products Association.
Past board roles include:
• Aggregate Industries UK –
Managing Director,
Cement & Concrete Products
• Lafarge Africa plc – CEO
None
Independent: No
Relevant skills and experience:
Member of the Institute of
Chartered Accountants in England
and Wales. Wealth of experience in key
finance leadership roles with a broad
background in manufacturing, media
and technology sectors. Extensive
experience of Group finance and
controls, as well as global shared
services operations. Demonstrable
success in a range of senior
operational, corporate and
financial communication roles.
Experience in digital
transformation within complex,
global operating environments.
Current external appointments:
• None
Past board roles include:
• Tate & Lyle North American
Sugars – Finance Director
Independent: Yes
Relevant skills and experience:
Experience of manufacture and
supply of building products in
international markets. 12 years’
experience in UK roofing and brick
markets. Experience of strategy
development, change management
programmes and M&A activity.
Strong commercial, marketing and
product background. 14 years’
experience in UK capital markets.
Current external appointments:
• Howden Joinery Group Plc –
NED and member of the Audit,
Remuneration, Nominations
and Sustainability Committees
(appointed June 2023).
• Trifast plc – NED and member
of the Audit, Remuneration
and Nomination Committees
(appointed January 2023).
• Accsys Technologies PLC –
NED and member of the
Audit, Remuneration and
Nomination Committees
(appointed June 2022).
Past board roles include:
• Kingspan Group plc –
Executive Director
• Tyman plc – Chief
Executive Officer
74
Ibstock Plc | Annual Report and Accounts 2023
Peju Adebajo BSc, MEng, MBA
Non-Executive Director
Date appointed to the Board:
26 November 2021
Nicola Bruce MA, MBA, FCMA
Non-Executive Director
Date appointed to the Board:
29 March 2023
Claire Hawkings BSc (Hons), MBA
Non-Executive Director
Date appointed to the Board:
1 September 2018
Justin Read MA, MBA
Non-Executive Director
Date appointed to the Board:
1 January 2017
Tenure on Board:
2 years 3 months
Tenure on Board:
0 years 11 months
Tenure on Board:
5 years 6 months
Tenure on Board:
7 years 2 months
Committee memberships:
Committee memberships:
Committee memberships:
Committee memberships:
Independent: Yes
Relevant skills and experience:
CEO with experience across a number
of industrial sectors including building
materials, renewables, consulting and
banking. Over 14 years’ experience in
commercial expansion and development
of products and services. Experience in
sustainability leadership, turnarounds
and value creation. Educated at
Imperial College London and holds
a Bachelors and Masters Degree in
Engineering (Chemical Engineering).
MBA from Harvard University and
alumna of INSEAD.
Current external appointments:
• Wolseley Jersey Limited – NED
(appointed July 2022).
Past board roles include:
• Major State Agricultural
Department, Nigeria – CEO/MD
• Lafarge Africa PLC – MD
• Mouka Ltd (Nigeria) – CEO
Independent: Yes
Relevant skills and experience:
Extensive experience as a
Remuneration Committee Chair.
Breadth of strategy, business
development and non-executive
director experience including within
residential property and building
materials sectors. Degree in PPE
from Oxford University, an MBA
from INSEAD and a Chartered
Management Accountant.
Current external appointments:
• MJ Gleeson Plc – NED,
Remuneration Committee Chair
and Audit and Nomination
Committee member (appointed
March 2023).
• Stelrad plc – NED, Remuneration
Committee Chair and Audit and
Nomination Committee member
(appointed October 2021).
• OFWAT – NED and Casework
Committee Chair (appointed
December 2020).
• Anchor Hanover Group – SID and
Remuneration Committee Chair
(appointed November 2018).
Past board roles include:
• Hanover Housing Association –
NED
• Civil Service Healthcare Society
– NED
• The Money Advice Service – NED
• De La Rue plc – Group Director of
Strategy & Business Development
Independent: Yes
Relevant skills and experience:
BA (Hons) Degree in Environmental
Studies awarded by Northumbria
University. MBA from Imperial College
Management School. Fellow of the
Energy Institute. Sustainability
leadership and management
expertise. Experience in developing
and delivery of organisational
strategies including business process
transformation, leadership succession,
and diversity and inclusion. Significant
experience (30 years) in the energy
sector in a variety of international
leadership positions.
Current external appointments:
• Defence Equipment and Support
(MOD) – NED, Programme Review
and Audit Committee member
(appointed April 2021).
• James Fisher and Sons Plc – SID,
NED, and Audit, Remuneration and
Nomination Committee member
(appointed January 2022).
• FirstGroup plc – NED, Responsible
Business Committee Chair, and
Audit and Nominations
Committee member
(appointed January 2022).
Past board roles include:
• Tullow Oil Netherlands – Director
• Tullow Oil Bangladesh – Director
• Gujarat Gas Co. Ltd. – Director
• British Gas India Pvt. Ltd –
Director
Independent: Yes
Relevant skills and experience:
Educated at Oxford University
and holds an MBA from INSEAD.
Nine years as a CFO of FTSE-listed
companies. Financial and
management experience working
across a number of different
industry sectors, including real
estate, support services, building
materials and banking. Experience of
managing businesses across multiple
jurisdictions. Experience of strategy,
M&A, business development, investor
relations and capital raising.
Current external appointments:
• Grainger PLC – NED, SID,
Audit Committee Chair, and
Remuneration and Nomination
Committee member (appointed
February 2017).
• Affinity Water Limited – NED,
Audit Committee Chair and
Remuneration & Nomination
Committee member (appointed
July 2020).
• Marshall of Cambridge (Holdings)
Ltd – NED, Audit & Risk Committee
Chair, and Remuneration and
Nomination Committee member
(appointed October 2021).
Past board roles include:
• Carillion plc – NED (for a six-week
period from 1 December 2017)
• Segro plc –
Group Finance Director
• Speedy Hire plc –
Group Finance Director
75
Ibstock Plc | Annual Report and Accounts 2023Additional informationFinancial StatementsGovernanceStrategic Report
Executive Leadership Team
Becky Parker
BSc (Hons), MSc, ACMA/CGMA, GradCG
Chris Murray
BSc, MSc, MBA
Joanne Hodge
BA (Hons), MCIPD
Group Company
Secretary & ESG Director
Joined the business in January 2023
Managing Director –
Clay & Concrete
Joined the business in November 2023
Relevant skills and experience:
Undergraduate degree in
Management Sciences and a Master’s
degree in Management Science and
Operational Research awarded by the
University of Warwick. Member of the
Chartered Institute of Management
Accountants and a graduate of the
Chartered Governance Institute UK
and Ireland. Over 10 years’ experience
in FTSE 100 listed governance,
compliance and senior finance roles.
Broad range of commercial experience
across a range of sectors from early
career as a Management Consultant
at The PA Consulting Group.
Relevant skills and experience:
BSc in Civil Engineering, MSc in
Materials Handling Technology
awarded by Glasgow Caledonian
University and an MBA from
Newcastle Business School.
27 years of experience in FTSE
100 Manufacturing Companies.
20 years in Rio Tinto, starting as a
Graduate Engineer and moving onto
multiple Factory General Manager
roles and ultimately the Chief
Operating Officer for the Middle East.
Following Rio Tinto spent almost 7
years with DS Smith Managing
Director UK & Ireland.
Group People Director
Joined the business in January 2022
Relevant skills and experience:
BA Degree in Business and Finance
awarded by University of Coventry.
Member of Chartered Institute of
Personnel and Development.
Career which started as an Apprentice
and progressed through a number of
operational management roles before
moving to HR within a Global FMCG
organisation. Since worked across
Finance and Logistics sectors and led
sizeable organisational and cultural
transformation programmes.
Jeremie Rombaut
BA, BTech (Hons.)
Christopher McLeish
BSc, ACA
Joe Hudson
BA (Hons), FCIPD
Chief Financial Officer
See page 74 for skills and experience.
Chief Executive Officer
See page 74 for skills and experience.
Managing Director – Ibstock
Futures & Group Strategy
Joined the business in January 2022
Relevant skills and experience:
MBA (Distinction) Degree in General
Management awarded from
IMD, Lausanne and a Bachelor
of Technology degree from Roorkee
(India) and HES, Switzerland.
Diversified and international
experience in innovation, business
development (new market entry
with industrial investment, as well
as start up ventures) and general
management roles in Europe and
fast-growing emerging markets.
Experience in construction industry
including Cement, Aggregates,
Concrete and Plasterboard.
76
Ibstock Plc | Annual Report and Accounts 2023 Compliance and other statements
Application and compliance with the UK Corporate Governance Code 2018 (Code)
The principles set out in the Code emphasise the value of good corporate governance to
the long-term sustainable success of listed companies. These principles, and the supporting
provisions, cover five broad themes and the Board is responsible for ensuring that the
Company has appropriate frameworks in place to comply with the requirements of the
Code. The Board believes that throughout 2023, the Company has applied the principles
and complied with the relevant provisions of the Code.
Read more The Code is available on the Financial Reporting Council website at
www.frc.org.uk.
Application of the Code Principles
References to those parts of the Annual Report and Accounts (Annual Report) that
demonstrate how we have applied the main principles of the Code can be found below:
Board Leadership and Company Purpose
The Board is collectively responsible for the effective and entrepreneurial leadership of the
Group in order to ensure its long-term sustainable success, including the generation of value
for Ibstock’s shareholders and society as a whole. It achieves this by doing business that is
consistent with its purpose, vision and values whilst remaining clear on the interests of its
key stakeholders as well as its impacts on the environment.
Information on how the Board led the Company, establishing and overseeing the purpose,
values, strategy and integration of culture, ensuring that necessary resources are in place
and that stakeholder engagement was effective can be found on page 38.
Division of Responsibilities
The roles and responsibilities of key aspects of the Group’s governance framework can be
found on page 82.
Composition, Succession and Evaluation
The Nomination Committee Report on page 87 contain information on Board composition, the
process for appointments to the Board and wider succession planning, the Board evaluation
and effectiveness review procedures and the approach to induction, training and development.
Audit, Risk and Internal Control
Page 85 and the Audit Committee Report on page 96 contain information on financial
and business reporting, risk management, internal control and the internal and external
audit functions. The Audit Committee Report summarises the activities of the Committee
for the year, including areas of significant judgement.
Remuneration
The Directors’ Remuneration Report on page 103 contains information on the Company’s
Remuneration Policy as well as its application in 2023 and for the coming financial year.
Our purpose
and values
The construction industry plays a vital
part in the UK economy. Ibstock has
a clear and simple purpose: to build
a better world by being at the heart
of building through our vision of
enabling the construction of homes
and spaces that inspire people to work
and live better.
Our purpose is on page 14.
Our strategy
We have a clear strategy that is
informed by our purpose and aligned
with our responsible business
ambitions, underpinned by a culture
that is defined by our core values of
Teamwork, Trust, Care and Courage.
Our Strategy is on page 16.
Our culture
The Board is very proud of the culture
within Ibstock and each Director acts
with integrity to lead and promote the
desired culture.
More detail is on page 78.
Robust assessment of
emerging and principal risks
The Board confirms that it has carried out
a robust assessment of the emerging and
principal risks facing the Group (including
those which would threaten the business
model, future performance, solvency,
liquidity or reputation), its appetite with
respect to those risks and the systems
required to mitigate and manage them.
Details on the review process are set out
on page 85. Further details on the
emerging and principal risks and
uncertainties can be found on page 22.
Annual review of systems of risk
management and internal control
The Board monitored the Group’s systems
of risk management and internal control
and carried out a review of their
effectiveness. The Board concluded that,
whilst there remained opportunities to
improve in certain areas, overall these
systems were effective. Details regarding
this review process are set out on page 96.
Section 172(1)
The s172(1) Statement is presented
on page 42.
Fair, balanced and understandable
The Directors consider that, taken as a
whole, this Annual Report is fair, balanced
and understandable and provides the
information necessary for shareholders to
assess the Group’s position, performance,
business model and strategy. Details on
the process for arriving at this conclusion
are set out on page 95.
Viability and going concern
Statements in respect of viability and going
concern are set out on pages 70 to 71.
77
Ibstock Plc | Annual Report and Accounts 2023Additional informationFinancial StatementsGovernanceStrategic Report Board Leadership
and Company Purpose
Culture
The Board aims to ensure that our values are integrated
into decision-making and that the policies and procedures
we put in place are consistent with and support our culture.
Where behaviour is not aligned with these values, the
Board and management seek to ensure that appropriate
action is taken. The Board remains satisfied with the
values of the Group during 2023.
The table below sets out how policies and practices support Ibstock’s culture and explain how the Board monitors our culture.
Driving sustainable performance
Health, safety and wellbeing
We remain focused on creating a positive, proactive safety culture underpinned by a belief that all incidents across our operations are preventable.
We remain committed to driving our business to zero harm for everyone through continued focus on our six safety rules; successful employee
engagement events such as Safe Start days; and continuing investment in wellbeing with the introduction of a network of Mental Health Allies.
Every employee has the objective to raise two safety concerns through the internal Health and Safety monitoring system each year. Action is
taken to investigate, prioritise and close concerns with employees able to track progress through the monitoring system.
How the Board monitors our Health, Safety and Wellbeing culture
Result
The Board receives and discusses a detailed update on health and safety at the start of every Board
meeting. This allows the Board to monitor the development and implementation of initiatives to
improve safety as well as Ibstock’s prioritisation of completing safety actions.
60% reduction in lost time injury
frequency rates (LTIFR) from the
2016 baseline
The CEO and senior leaders continuously monitor the Group’s safety performance, starting all internal
communications with a focus on driving health and safety prioritisation throughout the Group.
The Group recognises factories that meet key milestone dates without Lost Time Incidents.
Operational Excellence
As a manufacturer, operational excellence is critical to our success. Throughout the year, the reduction in market demand has required a keen
focus on cost and capacity management, where we have taken decisive steps to mitigate the impact on our business performance in the short
term and position the business for longer-term sustainable growth. Please review our Operations Reviews on Page 27 for more information.
How the Board monitors our Operational Excellence culture
Result
The Board received regular updates on performance and discussed and approved actions required
to manage our cost and capacity. When discussing such proposals, a keen focus was given on the
approach Ibstock will take to this work to ensure that the strong collegiate culture is not damaged
by the necessary actions taken.
Additional support was provided
to colleagues impacted by cost
and capacity decisions
Environmental performance
We continue to take action at all levels in our business to deliver our ambitious target of a 40% reduction in carbon by 2030,
and are pleased to receive further external recognition for the leadership role we are playing in ESG as detailed on Page 49.
How the Board monitors our Environmental Performance culture
Result
Through the ESG Committee, the Board receives regular updates on the Group’s performance against
our ESG targets.
The development of a high level
Carbon Transition Plan ensures carbon
reduction is embedded into our culture
See Page 47 for more information
78
Ibstock Plc | Annual Report and Accounts 2023 Market-led innovation
Product Innovation
As market leader in clay and concrete products, Ibstock has the broadest range of building products and solutions available
in the UK, and has a culture of investment to enhance our offer.
How the Board monitors our Product Innovation culture
Result
The Board and its Committees receives updates on new product innovation within
their meetings. During 2023, the ESG Committee received training on Environmental
Product Declarations (EPDs) and monitors the EPD publication programme.
11% sales revenue from new and sustainable products
Customer experience
Providing the highest standard of products and service to our customers is critical to our success. Developing our
culture and processes to offer integrated solutions, rather than single products, has been a large focus of this year.
How the Board monitors our Customer Experience culture
Result
The Board monitors our customer experience culture through updates of customer
feedback, sales figures and our Net Promoter Score.
The launch of the “One Ibstock” brand
Digital transformation
Developing our digital culture and processes to offer more efficient and secure solutions.
How the Board monitors our Digital Transformation culture
Result
The Board received an update during the 2023 year on the progress made
on our digital strategy.
Continued support and commitment
for our digital transformation
The Audit Committee received updates on cyber and information security during 2023.
Selective growth
Investment in our Core
We continue to invest in our brick manufacturing network and concrete automation in line with our
objective of maintaining the lowest cost, most efficient and most sustainable capacity in the industry.
How the Board monitors our Core Investment culture
Result
The Board received regular updates in their Board meetings on growth opportunities.
Completion of two bolt-on acquisitions and
the establishment of a more robust pipeline
of further opportunities
Diversified Growth
We continue to seek diversification opportunities into adjacent market segments.
How the Board monitors our Diversified Growth culture
Result
Key opportunities were discussed as part of the Board Strategy meeting.
The Board received updates on new opportunities as plans develop through the year.
Oversight of the progress of our slips
investment projects in Nostell
A visit to Power Park to oversee the
organic growth in our Façades business
People
The Listening Post, our chosen method of workforce engagement.
How the Board monitors our People culture
Result
The Board received updates on new initiatives and the development of plans
through the year.
Each Non-Executive Director is required to attend a Listening Post, with Peju
Adebajo attending all sessions in her role as the Non-Executive Director
responsible for workforce engagement.
The Board considered the minutes from each Listening Post as well as updates
from the Board attendees at subsequent Board meeting.
The results of our bi-annual employee engagement
survey demonstrated very solid progress, with
participation rates increasing to 76% (2021: 62%)
and all engagement measures showing improvement
79
Ibstock Plc | Annual Report and Accounts 2023Additional informationFinancial StatementsGovernanceStrategic Report Activities of the Board in 2023
The key activities considered by the Board during the year are set out below.
STRATEGY
AND GROWTH
HEALTH
AND SAFETY
• Reports – The Board considers
the Health and Safety report from
the Group’s Head of Health and
Safety, covering progress relative
to targets, updates on new projects
and initiatives, and analysis of
any incidents. A more detailed
summary round up of incidents
is presented once a year.
• Health and safety culture – The
Board uses The Listening Post and
factory visits as opportunities to
receive feedback on the health
and safety culture within Ibstock.
• Review and approve the
Strategic Plan – Annually, the
Board reviews, challenges and
approves the Strategic Plan
presented by the CEO and CFO.
• Strategy meeting – A dedicated
session is assigned to the
consideration and review of the
Group’s strategy on an annual
basis. During this session, the Board
receive inputs from its key advisers,
the Executive Directors and members
of the senior management teams.
This year, the Board also visited a
Social Housing Site (Bromley by Bow)
to provide further insight into the
Social Housing sector.
• Acquisitions – The Board reviewed
and approved the acquisitions of
Coltman and the G-Tech assets.
OPERATIONAL
• Operational performance
reporting –The CEO provides
regular reports to the Board.
• Cost and capacity management
– This year, the Board carefully
reviewed management’s cost
and capacity reduction plans
ahead of approving the activities
within them.
• Site visits – Formal Board and
Committee visits were held at
our Longley and Power Park
sites during the year. The Board
members also visited several
sites outside of formal meetings.
During these visits, operational
performance is discussed with
the Factory Managers.
FINANCIAL
• Financial performance reporting
– The Board receives a pack of
financial data on a regular basis
that provides sufficient information
on Ibstock’s trading and financial
position for historic periods as well
as forward-looking forecast and
budgets. Longer-term plans and
information on the Group’s banking
relationships is also provided.
• 2025 Budget – The Board discussed,
challenged and approved the 2025
Budget presented by Management.
RISK MANAGEMENT
AND INTERNAL CONTROL
• Risk management – Following
a detailed review by the Audit
Committee, the Board review
Ibstock’s approach to risk
management, risk appetite
and the Group’s risk register
twice a year.
• Internal controls – Upon guidance
from the Audit Committee, the
Board review the internal risk
management framework and
internal controls.
GOVERNANCE
• Formal governance updates
– Formal updates on governance are
provided by the Group’s advisers.
• Governance updates – The Board
receives regular updates on other
major legal, governance or
compliance developments from
the Group Company Secretary.
• Board evaluation – This year,
the Board discussed the findings
and agreed the action plan
from the External Board
Effectiveness Review.
80
Ibstock Plc | Annual Report and Accounts 2023 Shareholder engagement
The Board recognises
the value of maintaining
close relationships with
all of its stakeholders,
understanding their views
and the importance of
these relationships in
delivering our strategy
and the Group’s purpose.
The Board has a good understanding
of its key stakeholders and recognises
the interests, importance and value
of each relative to the Group’s business
and strategy. This is based on regular
engagement with these groups over
a number of years.
The Group’s key stakeholders and their
differing perspectives are taken into
account as part of the Board’s discussions.
You can read more in our Section 172(1)
Statement on page 42.
Throughout the year, the Board engaged
with Ibstock shareholders through multiple
formal channels including the below.
Investor meetings
As part of the Group’s annual financial
calendar, the CEO and CFO conduct a
round of meetings with analysts and
investors following the announcement
of the full-year and half-year results.
Other meetings are arranged as and when
required. During the 2023 financial year,
we held over 95 meetings with groups of
existing and potential investors.
The Chair seeks regular engagement
with the Company’s major shareholders
in order to understand their views on
governance and performance against
the strategy whilst the Committee Chairs
also engage on significant matters
related to their area of responsibility.
Louis Eperjesi, our Senior Independent
Director (SID), was available to
shareholders throughout the year if they
have concerns that contact through the
normal channels has failed to resolve or
for which such contact is inappropriate.
Investor visits
Interested institutional investors are
provided with opportunities to visit
the Group’s operational sites and
are encouraged to do so in order
to increase their understanding
of Ibstock’s business.
Shareholder feedback
The Chair ensures that the whole of
the Board has a clear understanding
of the views of shareholders. There is
an effective flow of communication
between the Board and all shareholders,
particularly with regard to business
developments and financial results.
The Board aims to communicate on
a regular basis and at present the
Company utilises news releases, investor
presentations and Company publications,
and will expand communication
channels as appropriate.
The Company’s brokers prepare
a report that provides anonymised
objective feedback received from
investors following those meetings.
The report is shared with all members
of the Board, who act upon the
feedback as necessary. The Executive
Directors also provide feedback on
their conversations with investors,
which provides an opportunity for
all Non-Executive Directors to develop
a better understanding of the views
of Ibstock’s major shareholders.
Further information on engagement
with shareholders can be found in
the Stakeholder engagement section
on page 38.
Annual General Meeting (AGM)
Ibstock’s AGM will be held on
16 May 2024. Any shareholder who
wishes to ask a question can do so in
advance of the meeting. Please email
company.secretariat@ibstock.co.uk with
any questions prior to the start of the
AGM. We endeavour to answer as many
questions as possible and will respond
by email if we are unable to answer
your question during the meeting.
Details of the arrangements together
with the resolutions to be proposed at
the AGM can be found in the Notice of
Meeting (Notice). The Notice, together
with explanatory notes on the resolutions
to be proposed and full details of the
deadlines for appointing proxies, will
be circulated to all shareholders at least
20 working days before the AGM, together
with this Annual Report. This document
will also be available on our website
www.ibstock.co.uk. Results of voting at the
AGM are announced to the London Stock
Exchange following the meeting and are
then published on the Company’s website.
81
Brick Slips at our Midlands factoryIbstock Plc | Annual Report and Accounts 2023Additional informationFinancial StatementsGovernanceStrategic Report Division of responsibilities
Governance framework
Board
Chair of the Board
Board of Directors
Senior Independent
Director
Audit
Committee
Nomination
Committee
Remuneration
Committee
ESG
Committee
Disclosure
Committee
Executive
Chief Executive Officer
Executive Leadership Team
Management
Senior
Leadership
Team
Clay
Leadership
Team
Concrete
Leadership
Team
Futures
Leadership
Team
Net Zero
Leadership
Team
Operational
Operational and Project Teams
Meeting attendance
Jonathan Nicholls
Joe Hudson
Chris McLeish
Tracey Graham
Justin Read
Louis Eperjesi
Claire Hawkings
Peju Adebajo
Nicola Bruce
Board
8/8
8/8
8/8
2/2
8/8
8/8
8/8
8/8
5/6*
Audit
Committee
Remuneration
Committee
Nomination
Committee
ESG
Committee
–
–
–
1/1
4/4
4/4
4/4
4/4
3/3
6/6
–
–
1/1
6/6
6/6
6/6
6/6
5/5
2/2
–
–
0/0
2/2
2/2
2/2
2/2
2/2
–
4/4
–
–
–
4/4
4/4
4/4
–
* Nicola Bruce was unable to attend one meeting date due to an unavoidable conflict with another Company’s Board meeting set prior to her appointment to Ibstock.
She received papers on all matters to be discussed at the meeting and provided the Board, Chair, CEO and other members with comments and questions prior to the meeting.
The Board has clearly defined the roles of the Chair, CEO and Senior Independent Director (SID) and, as required by the Code,
the roles of Chair and CEO are not being exercised by the same individual.
Full details of the roles and responsibilities of all parts of the Group’s governance arrangements including those concerning the
Chair, CEO and SID can be found on the Company’s website and on the next page.
82
Ibstock Plc | Annual Report and Accounts 2023 Roles and responsibilities
Chair
The Board
The Chair is responsible for the leadership and effectiveness of the Board. The Chair, with the assistance of the CEO
and the Group Company Secretary, sets the agenda for Board meetings, manages the meetings (in conjunction with
the Group Company Secretary) and facilitates open and constructive dialogue during those meetings. They also hold
meetings without the CEO and CFO being present.
There are a number of key areas that are specifically reserved for the decision of the Board. A list of these can be found
on our website www.ibstock.co.uk.
Other matters, including the day to day management of the Group, may be delegated to the Executive Directors.
Although a wide range of the Board’s powers and authorities are delegated to the CEO, the Board retains ultimate
responsibility and authority for their exercise.
The Board approves the Group’s governance framework, taking into account contributions from Board Committees
in their specialist areas such as remuneration policy, internal controls and risk management and succession planning.
Independent
Non-Executive
Directors
The Non-Executive Directors provide an external perspective, sound judgement and objectivity to the Board’s deliberations
and decision-making. With their diverse range of skills and expertise, they support and constructively challenge the Executive
Directors, and monitor and scrutinise the Group’s performance against agreed goals and objectives. The Non-Executive
Directors are also responsible for determining appropriate levels of executive remuneration, appointing and removing
Executive Directors, and succession planning through their membership of the Remuneration and Nomination Committees.
The Non-Executive Directors together with the Chair meet regularly without any Executive Directors being present.
Senior Independent
Director (SID)
The SID provides advice to the Chair and serves as an intermediary for the other Directors and shareholders. The Non-
Executive Directors meet without the Chair present at least annually to appraise the Chair’s performance, and on other
occasions as necessary.
Board Committees
The Board has five main committees: the Audit Committee, Nomination Committee, Remuneration Committee,
ESG Committee and the Disclosure Committee.
The Terms of Reference for each Committee are available on the Group’s website www.ibstock.co.uk.
Chief Executive
Officer (CEO)
Executive
Leadership Team
(ELT)
Chief Financial
Officer (CFO)
The CEO has specific responsibility for recommending the Group’s strategy to the Board and for delivering the strategy
once approved. In undertaking such responsibilities, he is supported by the ELT and other Board colleagues. The CEO
and CFO monitor the Group’s operating and financial results and direct the day to day business of the Group. The CEO
is also responsible for the recruitment, leadership and development of the ELT.
The ELT has been established to support the CEO’s management of the business on a day to day basis and exercise
of any authority delegated to him by the Board. Members of the ELT include the Chief Financial Officer, the Managing
Director – Clay & Concrete, the Managing Director – Ibstock Futures & Group Strategy, the Group People Director and
the Group Company Secretary & ESG Director. Meetings are held on a monthly basis.
The CFO is responsible for the financial matters in the Group. He supports the CEO in the achievement of the Group’s
strategic objectives and manages the relationships with Ibstock’s investors and analysts. Further information can be
found in the Financial Review on page 33.
Board support and
the Group Company
Secretary
Directors’
Availability
Independence
The Group Company Secretary supports and works closely with the Chair, the CEO and the Chairs of the Board
Committees in setting agendas for meetings of the Board and its Committees. She ensures accurate, timely and
clear information flows to and from the Board and the Board Committees, and between Directors and senior
management. In addition, she supports the Chair in designing and delivering Directors’ induction programmes
and the Board and Committee performance evaluations, advises the Board on corporate governance matters
and Board procedures, and is responsible for administering the Share Dealing Code and the AGM.
The Directors of all Group companies, as well as the Board, have access to the advice and services of the Group Company
Secretary, although independent external legal and professional advice can also be taken when necessary to do so. Furthermore,
each Committee of the Board has access to sufficient and tailored resources to carry out its duties. The appointment and the
removal of the Group Company Secretary is a matter for the Board as a whole.
The Board is content with the level of external directorships held by the Chair and the Independent Non-Executive
Directors, as these do not impact on the time that any Director devotes to the Company. The Board is satisfied that
Directors have sufficient time to perform their duties and, furthermore, the Board believes that this external experience
serves to enhance the capability of the Board.
The independence of the Non-Executive Directors is considered on an annual basis by the Nomination Committee on
behalf of the Board and, following this year’s review, it was concluded that all of the Non-Executive Directors continue
to remain independent in character and judgement and are free from any business or other relationships that could
materially affect the exercise of their judgement. The balance of skills and experience ensures that no one individual or
small group of individuals dominates the Board’s decision-making processes. The Board and Nomination Committee
also review Committee membership annually to ensure that undue reliance is not placed on individuals.
83
Ibstock Plc | Annual Report and Accounts 2023Additional informationFinancial StatementsGovernanceStrategic Report Board Evaluation
Board evaluation process
Process planning
One-to-one
meetings
Evaluation and
reporting
Review
of report
Agree actions and
monitor progress
To provide insight on
the progress made
since the last external
Board review, the
Board appointed
Boardroom Dialogue
to complete the
review again. Scope
of exercise agreed.
Meetings held with
all Non-Executive
Directors and the
Group Company
Secretary during
Autumn 2023.
Preparation and
production of a
formal report for
the Board, setting
out the conclusions
of the review with
outcomes and
recommendations.
Consideration and
discussion of the
report at a Board
meeting arranged
for the purpose.
Production of a
schedule of actions
coming out of the
recommendations,
with assigned
responsibility that
will be reviewed
at each meeting.
A number of recommendations were made
to further improve the Board’s operation.
These included:
• The need for consideration of how
to provide the Board with even more
insight into customers and employees
• Holding more Board meetings at sites
• Increase Non-Executive Director
visibility across the Group
• Develop a skills matrix for the Board
A number of other recommendations and
ideas were discussed by the Board and it
was agreed that a formal action plan
would be developed with support from
the Company Secretary to address the
recommendations. This plan would form
a standing part of the activities of the
Board over the course of the coming year.
Progress against actions
During 2023, the Board made progress on
the actions from the 2022 and 2023 Board
evaluations including the development of
a skills matrix for the Board which is shown
on page 88.
Process and methodology
During 2023, Boardroom Dialogue
conducted an externally facilitated
evaluation of the Board’s performance,
and that of its Committees. Boardroom
Dialogue was selected as the Board
believed that this would allow the most
appropriate insight on improvements and
progress made as it also completed the
2020 externally facilitated evaluation.
Boardroom Dialogue has no other
connection to the Company or any
individual Director.
The review was undertaken in accordance
with the principles and provisions of the
FRC UK Corporate Governance Code, 2018
edition (the Code) and the FRC Guidance
on Board Effectiveness, July 2018 (Guidance).
This was the second externally facilitated
review process for Ibstock that involved
the use of individual interviews with all
members of the Board, although an
external, questionnaire-based review
was completed in the 2018 financial
year. The next fully externally facilitated
review will be undertaken in 2026.
The review was delivered by way of
interviews in order to capture non-
attributable views, with additional
commentary based on best practice and
emerging trends. The focus was on the
identification of things the Board and
Committees were doing well in addition
those to areas that would benefit from
further improvement.
The process included an initial briefing
meeting with the Chair to finalise the
scope of work, a desktop review of all
Board and Committee papers for a certain
period, together with related governance
documentation, interviews with all Board
members plus the Company Secretary, and
the observation of Board and Committee
meetings. These actions were presented in
a draft report that was initially discussed
with the Chair and the CEO before its
circulation and discussion at a meeting
of the Board.
Outcomes
The key findings from this process was
that the Board was operating effectively,
with no significant issues or concerns that
were not already under consideration.
The Board currently operates with a high
level of trust, effective leadership and a
culture of constructive challenge, and
contains appropriate skills.
• The Chair provides strong leadership,
clarity of direction and creates a safe
environment, which encourages
constructive debate
• The Chair and CEO work well together
• The Board and Committee meetings
are well chaired
• The Board is open and collegiate
where Directors have a high level of
trust and confidence in each other
• The skills around the Board table are
felt to be appropriate for the current
challenges facing the business
• The CEO and CFO are open and
transparent with the Board
84
Ibstock Plc | Annual Report and Accounts 2023 Audit, Risk and Internal Control
Board assessment of risk
management and internal control
The Board has overall responsibility for
the Group’s system of risk management
and internal control, including the setting
of risk appetite.
The Audit Committee has a key role to
play in overseeing risk management and
internal controls and advising the Board.
More information on page 96.
The Board is responsible for reviewing
the effectiveness of risk management
and internal control systems and
specifically that:
• There is an ongoing, systemised
process for identifying, evaluating
and managing the principal risks
faced by the Group.
• This system has been in place for the
year under review and up to the date
of approval of this Annual Report.
• The system is regularly reviewed by
the Board.
• The system accords with the Financial
Reporting Council (FRC) guidance on
risk management, internal control and
related financial and business reporting.
During the year, the Board has directly,
or through the Audit Committee, overseen
and reviewed the development and
performance of risk management activities
and practices and the systems of internal
control in place across the Group. As a
result, the Board is satisfied that the risk
management and internal control systems
that are in place remain robust and effective.
The Board delegated the responsibility for
conducting the work required for it to provide
the ‘fair, balanced and understandable’,
‘going concern’ and ‘viability’ statements
to the Audit Committee. In conducting this
work, the Audit Committee acts on behalf
of the Board and its activities remain the
responsibility of the Board.
The relevant Board statements on these
matters are set out on page 70 and page
71. The principal risks and uncertainties
are set out on pages 22 to 26.
System of risk management and control
The system of internal control is designed to
manage and mitigate rather than eliminate
the risk of failure to achieve business
objectives and can only provide reasonable
and not absolute assurance against
material misstatement or loss. The Board
has delegated the day to day management
of the Group to the Chief Executive Officer
and Executive Leadership Team (ELT).
The risk governance model is based on
‘three lines of defence’ as follows:
1st line of defence
A risk management framework is in place
which includes the agreed risk appetite,
policies and procedures. The Group’s
management operates a formal process
for identifying, managing and reporting
on the strategic, operational and financial
risks faced by each of the Group’s businesses.
Risks are reviewed in detail at Divisional
risk meetings and, on an overall basis,
by the ELT and the Audit Committee.
Support is provided by the 2nd line of
defence oversight functions.
2nd line of defence
Oversight is provided by the various control
functions, including risk, compliance and
specialist functions such as health and
safety and information security. The 2nd
line provides advice to the Board and the
Audit Committee on risk appetites, review
of risk ratings and action plans and reports
on risk management.
3rd line of defence
The Group has a dedicated Internal Audit
function and a formal audit plan is in place
to address the key risks across the Group
and the operation and effectiveness of
internal controls. The function reports to
the Board through the Audit Committee.
Risk management cycle
Risk appetite
Risk appetite is defined as the amount
and type of risk we are willing to pursue
or retain in order to meet our strategic
objectives. Our assessment of risk appetite
is guided by our vision and mission and
informed by our strategic objectives. It is
used as a measure against which all of our
current and proposed activities are tested.
Risk appetite is reviewed bi-annually to
ensure that it is aligned with strategy.
Risk framework
A risk framework is in place across the
Group which includes risk appetite.
Each business is expected to adhere to
the Group risk framework and to report
regularly on its risk registers and key risk
indicators, but, if appropriate, the Group
framework may be customised to local
requirements as long as minimum
standards are met. A mechanism exists
to extend the Group’s risk framework
to any significant new business that is
acquired or established immediately
upon acquisition or start-up.
Risk assessment and risk registers
Our assessment of risk is approached from
a top-down and a bottom-up perspective.
Through the ELT, we identify Group Enterprise
Risks, which are those risks that directly link
to our business model and strategy. At a
Divisional level, each business identifies
strategic and operational risks, which are
captured on detailed risk registers. Divisions
are also required to ensure that risks
designated by the Group to be ‘critical’
risks are actively managed. These are risks
where compliance with a minimum level of
control is considered to be non-negotiable
(an example of a ‘critical’ risk is health
and safety). Best practice in respect of
identifying and mitigating ‘critical’ risks
is shared across the Group.
All risks are assessed in respect of likelihood
and impact based on the materiality matrix
included in the Group risk framework.
Risks are then scored on a mitigated
and unmitigated basis and rated as high,
medium or low. Consideration is given to
whether risks are within or outside appetite
and particular attention is given to the
controls that are in place and the actions
being taken to mitigate the risks. Incidents
are recorded and reported on at the
relevant risk meetings.
Risk registers are reviewed at Divisional
risk meetings, with the ELT and the Audit
Committee having regular oversight of
both the Group Enterprise Risks and the
principal risks identified by each Division.
Risk oversight
Oversight of the risk management process
is provided by the Group Financial Controller,
Divisional risk teams, the Audit Committee
and, ultimately, the Board.
Internal control
Internal Audit acts as the 3rd line
of defence. In order to ensure the
independence of the Internal Audit
function, RSM’s primary reporting line
is to the Chair of the Audit Committee.
The Internal Audit function fulfils its role
and responsibilities by delivery of the
annual, risk-based audit plan. There are
no restrictions on the scope of Internal
Audit’s work.
A report is issued after each audit
which provides an opinion on the
control environment and details any
issues found. Internal Audit then works
with the businesses to agree remedial
actions, which are tracked to completion.
RSM attends and reports to every
Audit Committee meeting.
85
Ibstock Plc | Annual Report and Accounts 2023Additional informationFinancial StatementsGovernanceStrategic Report Audit, Risk and Internal Control continued
Financial reporting
The long-term business plan, annual budget
and material investment proposals are
formally prepared, reviewed and approved
by the Board.
A clearly defined organisation structure is
in place, with clear lines of accountability
and appropriate division of duties. The
Group’s financial regulations specify
authorisation limits for individual managers
with all material transactions being
approved by the Board.
Consolidated financial results, including
a comparison with budgets and forecasts,
are reported to the Board at each meeting,
with variances being identified and
understood so that mitigating actions
can be implemented, where appropriate.
Monthly Divisional meetings are held,
attended by Executives, representatives
from the Group Finance function and
local senior management. These meetings
provide an opportunity for a detailed
review of performance and to identify
any issues or trends.
Half-year and annual consolidated
accounts are prepared and verified by
the finance team, and reviewed by the
Executive Directors and the External
Auditor. The accounts are then considered
by the Audit Committee, which makes
a recommendation in respect of their
approval to the Board. The Board then
reviews and approves the accounts prior
to the announcement of the half-year
and annual results.
The Board considers that the processes
undertaken by the Audit Committee are
appropriately robust, effective and in
compliance with the guidelines issued by
the FRC. During the year, the Board has
not been advised by the Audit Committee
on, or identified itself, any failings, fraud or
weaknesses in internal control which have
been determined to be material in the
context of the financial statements.
Viability Statement
The approach to the Viability Statement
and the statement itself are set out on
pages 70 to 71.
Compliance with law and regulation
As the laws governing business dealings
become ever more complex we need
to ensure the judgements and decisions
we make are taken with both the
knowledge and application of the
highest ethical principles.
Ibstock operates appropriate policies
and procedures to ensure that risks from
unethical conduct and illegal business
practice are reduced and eliminated as
far as possible. These underpin our Code
of Business Conduct, which together
with our Supplier Sustainability Code
of Business Conduct, sets out the
behaviours expected of our staff and
the third parties we do business with.
Oversight of the operation of the
Group’s key policies in this area has
been delegated to the Audit Committee
who, in turn, make recommendations to
the Board. There have been no reported
breaches of the Group’s Code of Business
Conduct in 2023.
The Code of Business Conduct is
underpinned by a number of additional
standalone policies including those
covering bribery and corruption,
competition law and data protection.
Taken together these policies ensure that
we operate in an open, fair and honest
manner in all of our business dealings.
Additional standalone policies
Modern Slavery
We support the Modern Slavery Act 2015.
Our Modern Slavery Policy confirms our
zero tolerance approach to any potential
or actual breaches of the policy and sets
out the steps taken by Ibstock to prevent
modern slavery and human trafficking
in its business and supply chains.
The Company’s full Modern Slavery
Statement can be accessed on the
corporate website, www.ibstock.co.uk.
Whistleblowing
To help us encourage the highest standards
of ethical behaviours, corporate governance
and accountability in our business activities,
the Group operates an anonymous
whistleblowing hotline, which is available
24 hours a day, seven days a week.
A summary of whistleblowing activity,
together with details of related investigations,
is provided to the Board on a twice-yearly
basis. There were 4 incidents reported
through the external whistleblowing line
during the year (2022: 3). Each case was
thoroughly investigated and appropriate
actions were taken.
Anti-Bribery and Corruption Policy
We prohibit any inducement which
results in a personal gain and is intended
to influence action which may not be
solely in the interests of the Code.
Sustainable Procurement Policy
We have policy and framework guidelines
for all procurement activity in order to
maintain the highest standards of integrity.
Sustainability (ESG) Policy
As part of our vision for sustainable growth,
we continuously work to minimise our
impact on the environment. More
information is found on page 44.
Diversity and Inclusion Policy
We are committed to ensuring our culture
is inclusive. Any type of discrimination
including harassment, victimisation,
favouritism and bullying is not accepted.
Read more There is also a Diversity
Policy specifically for the Board –
more information found on page 90
Trade Association Policy
Our Trade Association Policy helps to
support employees in their dealings
with fellow employees, customers,
suppliers, regulators and colleagues
in competing businesses.
Health and Safety Policy Statement
We are committed to ensuring the health
and safety of all our employees.
Read more For more information
relating to all our policies, please see our
corporate website, www.ibstock.co.uk
Compliance training
Ibstock’s web-based compliance training
is completed by appropriate employees
and covers a wide range of the Group’s
policies and codes of practice, including
anti-bribery, conflicts of interest, business
ethics and diversity.
Human rights
Ibstock is supported by the principles
set out in the UK Declaration of Human
Rights and the requirements of the Human
Rights Act and seeks to act accordingly in
all aspects of its operations.
Tax strategy
Our tax strategy is published on the
Group’s website, www.ibstock.co.uk.
This formalises the Group’s approach to
conducting its tax affairs and managing
our tax risks. Our view on tax is to be a
responsible corporate citizen, contributing
the right amount of tax to society on
time and in the right tax jurisdiction.
Ibstock resides only in the UK and not in
countries considered as partially compliant
or non-compliant according to the OECD
tax transparency report or blacklisted or
grey listed by the EU in February 2023.
86
Ibstock Plc | Annual Report and Accounts 2023 Nomination Committee Report
Jonathan Nicholls
Chair of the Nomination Committee
Committee purpose
The Nomination Committee (the Committee) leads the
process for appointments, ensures plans are in place for
orderly succession to both the Board and senior management
positions, and oversees the development of a diverse pipeline
for succession
Committee meetings and membership
At Year End, the Committee comprises the Chair of the
Board and five Independent Non-Executive Directors.
Member
Membership dates
Meeting
attendance
%
attendance
Jonathan Nicholls
(Chair)
Justin Read
Peju Adebajo
Nicola Bruce
Louis Eperjesi
Claire Hawkings
Tracey Graham
22 September 2015
1 January 2017
26 November 2021
29 March 2023
1 June 2018
1 September 2018
3 February 2016
to 27 April 2023
2/2
2/2
2/2
2/2
2/2
2/2
100%
100%
100%
100%
100%
100%
0/0
100%
Read more – Biographies of the Committee members
are on page 74
Priorities for 2024
• To conduct an orderly process for the recruitment
of a new Chair to Ibstock.
• To support the induction and handover to the new
Chair once appointed.
• To address compliance to the targets in the Listing Rules
(LR 9.8.6R(9)) and the recommendations of the FTSE
Women Leaders Review.
“The Nomination Committee appointed Nicola
Bruce to the Board and deepened our progress
on our Board’s succession planning.”
Role and responsibilities
The key responsibilities of the Committee are to:
• Develop and maintain a formal, rigorous and transparent
procedure for making recommendations to the Board on
appointments and on the structure, size and composition
of the Board
• Ensure that planning is in place for orderly succession
of both the Board and senior management positions
• Oversee the development of a diverse pipeline of talent
for succession
• Evaluate the balance of skills, diversity, knowledge and
experience of the Board
• Prepare a description of the role and capabilities required for
a particular appointment and lead the recruitment process
• Identify and nominate, for the approval of the Board,
candidates to fill Board and senior management vacancies,
ensuring that candidates have the necessary skills, knowledge
and experience to effectively discharge their responsibilities
• Review the time commitment required from Non-Executive
Directors and evaluate the membership and performance
of the Board and its Committees
• Ensure that evaluations of the effectiveness of the Board and
its Committees, and performance assessments of the Chair,
the Chief Executive Officer, and the Chief Financial Officer
are undertaken annually
• Recommend, where appropriate, the re-election of Directors
Read more – The Committee’s Terms of Reference
are available in full at www.ibstock.co.uk
Main activities of the Nomination Committee during 2023
• The appointment of Nicola Bruce as Chair of the Remuneration
Committee, following Tracey Graham’s planned departure at
the close of the 2023 Annual General Meeting.
More information on Nicola’s appointment process
and her induction is found on page 89
• Supporting the recruitment process of Chris Murray
as Managing Director – Clay & Concrete.
• Reviewed and supported initiatives to support improved
diversity, economic and social benefit throughout the Group,
as we are conscious that this needs to be an area of focus
for Ibstock as a leader within the building sector.
• Reviewed succession plans for key members of the Board,
including the Chair. Following deliberation, the Committee
concluded that to ensure an orderly and well organised
transition to a new Chair at the end of Jonathan Nicholls’
tenure, the search for a new Chair will start during 2024.
As Senior Independent Director (SID), Louis Eperjesi will
lead this appointment process and a specialist third party
recruitment specialist will be appointed in early 2024 to
support this process.
87
Ibstock Plc | Annual Report and Accounts 2023Additional informationFinancial StatementsGovernanceStrategic Report
Nomination Committee Report continued
Succession Planning
The composition of the Board is constantly
under review with the aim of ensuring that
it has the depth and breadth of skills to
discharge its responsibilities effectively.
The Committee, through its oversight
of succession planning, applies a similar
approach to the layer of management
that sits immediately below the Board.
By way of an example, in the year under
review, the Committee managed the
process to appoint Nicola Bruce as a
Non-Executive Director and Chair of the
Remuneration Committee. The Committee
also oversaw the process undertaken to
recruit Chris Murray as Managing Director
– Clay & Concrete, with his appointment
starting on 1 November 2023.
The Committee aims to ensure that the
Board and senior management are well
balanced in the skills and experience
appropriate for the needs of the business
and the achievement of the Company’s
strategy. Furthermore, the Committee
ensures that the Board includes Non-
Executive Directors who are appropriately
experienced and are independent in
character and judgement.
In line with good practice, given the
tenure of Justin Read as Audit Committee
Chair, the Committee considered and
concluded that he remains independent,
when reviewing the independence of
all our Non-Executive Directors.
To support this, the Committee has
developed a skill matrix of the Board
Directors which will be used to better
understand the training requirements
of the Board, as well as to understand
the skills and experience requirements
within the Board’s succession plans.
As Jonathan Nicholls has been the Chair
of Ibstock for eight years, the Nomination
Committee recognises the need to ensure
an effective succession plan for the role
of Board Chair. As such, it was agreed to
commence a Chair recruitment exercise
during 2024 with the aim of allowing
a handover period for the new Chair
ahead of commencing the role following
the 2025 AGM.
Skills matrix of Board Directors
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Jonathan Nicholls
Joe Hudson
Chris McLeish
Peju Adebajo
Nicola Bruce
Louis Eperjesi
Claire Hawkings
Justin Read
88
Ibstock Plc | Annual Report and Accounts 2023
Board appointment process
Appointment
process
Evaluate
the Board
Identify suitable
candidates
Recommend
to the Board
The process for appointing
new Board members is set
out in the Committee Terms
of Reference, which can be
found on our website
www.ibstock.co.uk.
The Committee is responsible
for identifying and nominating,
for the approval of the Board,
candidates to fill Board vacancies
as and when they arise.
Before any appointment is made
to the Board, the Committee takes
into account of the balance of
skills, knowledge, independence,
experience and diversity on the
Board, including the balance of
Non-Executive Directors to
Executive Directors. In the light
of this evaluation process, the
Committee prepares a description
of the role and capabilities
required of the particular
appointment, and assesses the
time commitment expected.
In identifying suitable candidates,
the Committee:
• Uses open advertising or the
services of external advisers
to facilitate the search
• Considers candidates from
different genders and a wide
range of backgrounds
• Considers candidates on merit
and against objective criteria,
taking into account the benefits
of diversity on the Board
• Ensures that appointees
have enough time to devote
to the position
The Nomination Committee
considers the selection and
reappointment of Directors carefully
before making a recommendation
to the Board. Non-Executive
Directors and the Chair of the Board
are generally appointed for an initial
period of three years, which may be
renewed for a further two terms.
Reappointment is not automatic
at the end of each three-year term.
Recruitment agency
To assist with the search for suitable
candidates to appoint a new Remuneration
Committee Chair, the Committee appointed
Russell Reynolds, a specialist third party
recruitment agency which has no other
connection to the Company or to
individual Directors.
New Non-Executive Director
induction programme
A comprehensive induction programme
is arranged for all newly appointed
Non-Executive Directors.
This year, following her appointment as
a Non-Executive Director on 29 March
2023, a detailed induction programme
was arranged for Nicola Bruce.
Details of some of the activities undertaken by Nicola Bruce are set out below:
Area
Board and Committees
External and Internal Audit
Provided by
Non-Executive Directors
Group Company Secretary
External Audit partner
RSM (Internal Auditor)
Brokers and Legal Advisers
Managing Director, UBS
Partner, Slaughter and May
Head Office functions
and Clay operations
Group Finance
CEO
Senior managers
CFO
Remuneration
Manufacturing
Health, Safety and Environment
Concrete operations, site visit
Clay Operations, site visit
Environmental, Social
and Governance
Tracey Graham
Remuneration Committee Adviser
Group People Director
Manufacturing Development Director
Technical and Strategic Projects Director
Head of Group SHEQ
Operations Director, Concrete
Factory Manager, Cebastone
Operations Director, Clay
Factory Manager, Eclipse
Factory Manager, Chesterton
ESG Director
Subjects discussed/matters covered
Board and Committee operation
Skills and backgrounds of Board members
Board responsibilities
Audit cycle, audit plans
Interaction with Audit Committee
Audit development horizon
Overview of risks and controls
Market and industry development
Investor landscape
Key legal, regulatory and best practice environment
Group strategy
Operations overview
Insight into Head Office functions
Financial control framework and governance processes
Financial reporting
Remuneration landscape
Remuneration within Ibstock
Directors’ Remuneration Policy
Manufacturing and Production
Strategic projects
Ibstock’s focus on health and safety
Environmental performance
Concrete operations overview
Concrete factory operations and production
Clay operations overview
Clay factory operations and production
ESG Strategy
Roadmap to Net Zero
Challenges and opportunities
89
Ibstock Plc | Annual Report and Accounts 2023Additional informationFinancial StatementsGovernanceStrategic Report Nomination Committee Report continued
Board Diversity
Board diversity targets
In accordance with the Listing Rules
(LR 9.8.6R(9)), Ibstock confirms that
as at 31 December 2023, and as at
the date of this report at least one
individual on its board of directors is
from a minority ethnic background.
Ibstock notes that it has not met the
target that at least 40% of the board
of directors are women with 37.5% of
our board of directors being women.
Ibstock also notes that it has not met
the target that one of the following
senior positions on its board of directors
is held by a woman – the chair, the
chief executive, the senior independent
director; or the chief financial officer.
This target also aligns with the FTSE
Women Leaders recommendation.
Whilst Ibstock met this target at the
2023 AGM, the appointment of Louis
Eperjesi as SID during the year, has led
to this target not being met by year end.
Board Diversity Policy
The Committee retains the strong belief
that a diverse Board membership supports
the Group strategy by bringing the widest
range of viewpoints and experience
possible to the debate.
We will seek to meet this Board diversity
target and recommendation as part of
the next Board changes.
Ibstock collects diversity data from the
Board and wider workforce through
diversity data collection surveys.
Diversity Policy
Ibstock operates a Diversity and Inclusion
Policy which is applicable to the whole
organisation and which informs the
Board’s approach in this area. The policy is
accessible to everyone at Ibstock through
the People team and on MyIbstock.
In line with the recommendation in the
Parker Review, aimed at improving the
Ethnic Diversity of UK Business, we will be
reviewing our approach to Ethnic diversity
now we have completed our data collection
and will set appropriate targets as relevant.
We continue to work with our recruitment
partners to ensure that we are able to
attract high quality candidates from a
wide range of backgrounds, strengths and
abilities. We recognise that achievement
of our strategic objectives is reliant on the
recruitment and retention of a diverse and
engaged workforce, and efforts in this area
will continue.
In consideration of the need for diversity
on the Board, the Committee recommended
to the Board the adoption of a Board Diversity
Policy, which was subsequently approved.
The Board Diversity Policy formalises the
Board’s commitment to appropriately
diverse membership and compliance with
reporting regulations, and can be found
on the Group website www.ibstock.co.uk.
We retain our stated target to increase
female representation in the senior
management group to 40% by 2027.
This group includes those members of
the ELT and their direct reports.
Objectives
We are committed to promoting equal opportunities in employment and apply this policy to all Board Committees.
As an organisation we believe that by providing a harmonious working environment, all employees should be able to
maximise their potential and contribute to our success. Ibstock’s Diversity and Inclusion Policy, which applies to all
employees, supports our Diversity and Inclusion Strategy, and Working Group activities, which aim to increase diversity
and promote inclusion within our workforce.
Policy objectives
Implementation
Progress against objectives
The Board acknowledges and
supports the recommendations
of the FTSE Women Leaders’
(previously the Hampton-
Alexander) and Parker reviews
We will continue to make appointments which
reflect our strategic aims to sustain, innovate
and grow our business, with due regard for
the need for diversity on the Board.
We maintained our Board gender diversity of
38% through 2023 having appointed a new
Non-Executive Director who is also the Chair
of the Remuneration Committee.
On a comply or explain basis, we will continue to
report on the diversity of our Board composition
with reference to the voluntary targets outlined
within these reviews in our Annual Report and
Accounts, and in compliance with legal and
regulatory requirements as may be applicable
from time to time.
We have increased our diversity disclosures
within this Annual Report and Accounts.
90
Ibstock Plc | Annual Report and Accounts 2023 Diversity and inclusion
Our current employee population reflects
the traditional nature of our industry across
all diversity characteristics, including age,
race, gender, sexual orientation and
disability. We recognise the challenge
we face with 84% of roles being occupied
by men, including a higher percentage
of men in factory-based production roles.
We have also progressed our consideration
of other elements of Diversity, with the
collection of wider diversity data from
our workforce during 2023. We will be
reviewing this data and agreeing next
steps during 2024.
40%
We retain our stated target to increase
female representation in the senior
management group to 40% by 2027.
The Committee acknowledges and
supports the aims, objectives and
recommendations outlined in the FTSE
Women Leaders Review and is aware
of the need to achieve an appropriate
balance of women on our Board and in
senior positions throughout the Group.
The Committee also acknowledges
and supports the aims, objectives and
recommendations of the Parker Review
on ethnic diversity and the emphasis in
the Disclosure Guidance and Transparency
Rules on disclosure around diversity with
regard to aspects such as age, gender and
educational and professional background.
As at the end of the year under review,
we are satisfied that we are aligned with
the recommendations of both reviews.
Furthermore, the Committee is cognisant
of the FTSE Women Leaders Review
recommendation that FTSE 350 companies
should have at least one woman in the
chair or senior independent director role
on the board, and/or one woman in the
chief executive officer or finance director
role in the company by the end of 2025,
and the Listing Rule obligation to report
against these in the Annual Report and
Accounts, effective for the Company
from its 2023 year end.
Whilst the Board met this recommendation
as at the 2023 AGM, with the appointment
of Louis Eperjesi as Senior Independent
Director during 2023, we no longer comply
but will seek to ensure compliance as
part of the next Board changes.
Jonathan Nicholls
Chair of the Nomination Committee
5 March 2024
Diversity disclosure
Gender identity of members of the Board and Executive Committee as at 31 December 2023
Men
Women
Not specified / prefer not to say
Number of
Board
members
Percentage of
the Board
Number of
Executive
Leadership
Team (ELT)
Percentage of
the ELT
Percentage of
Senior
Management
5
3
0
62%
38%
0%
4
2
0
67%
33%
0%
65%
35%
0%
Ethnicity of members of the Board and Executive Committee as at 31 December 2023
White – English/Welsh/Scottish/N Irish
White – Any other
Asian/Asian British – Chinese
Asian/Asian British – Pakistani
Black/African/Caribbean/British – African
Not specified / prefer not to say
Number of
Board
members
Percentage of
the Board
Number of
Executive
Leadership
Team (ELT)
Percentage of
the ELT
Percentage of
Senior
Management
7
0
0
0
1
0
87%
0%
0%
0%
13%
0%
5
1
0
0
0
0
83%
17%
0%
0%
0%
0%
88%
3%
3%
3%
3%
0%
91
Ibstock Plc | Annual Report and Accounts 2023Additional informationFinancial StatementsGovernanceStrategic Report ESG Committee Report
Claire Hawkings
Chair of the ESG Committee
Committee purpose
To oversee Ibstock’s strategies, policies and performance
in relation to environmental, social and governance (ESG)
matters and suggest ways to drive improvement in these
areas as appropriate.
Role and responsibilities
The Committee is appointed to assist the Board in the
discharge of its duties through overseeing Ibstock’s
strategies, policies and performance in relation to
environmental, social and governance matters and suggest
ways to drive improvement in these areas as appropriate.
The key responsibilities of the Committee are to:
• Develop a corporate ESG Strategy and ensure it is in
alignment with the corporate strategy, purpose and values
• Develop and recommend to the Board, ESG targets and
key performance indicators
• Understand the impact of the Company’s operations on
the environment and the impacts, risks and opportunities
of climate change
• Oversee the promotion of socially responsible values and
standards that relate to employees as well as the social
and economic community in which the Company operates
• Recommend to the Remuneration Committee performance
measures used in the Company’s incentive plans
• Work with the Remuneration Committee in assessing
actual performance relative to ESG
• Work with the Audit Committee on understanding the
risk and opportunities of climate change, and ensuring
mitigation plans are developed and implemented
• Oversee Company disclosures of ESG matters in the
Annual Report and Accounts
Read more – The Committee’s Terms of Reference
are available in full at www.ibstock.co.uk
92
“The ESG Committee has made significant
progress supporting the organisation
on a broad, varied and increasing remit,
and on delivery of the ESG Strategy”
Priorities for 2024
• Continue to drive the implementation of the ESG 2030
Strategy and integration of ESG performance across
the Group.
• Maintain focus on climate change, not least on ensuring
detailed transition plans are owned at a site level.
• Progress understanding of the impact of the business
on nature and further progress plans for biodiversity
enhancement and protection.
ESG 2030 Strategy
Read more – page 44
Main activities of the ESG Committee during 2023
• Monitoring the Group’s performance against the
ambitious interim targets set out in the ESG 2030 Strategy.
• Ensuring the ESG Strategy remains aligned with the
Company’s purpose, values and culture.
• Recommending the ESG targets to be included into the
LTIP performance conditions.
• Visiting an Ibstock site as well as a potential alternative
fuel site to further understand the progress, challenges
and opportunities of delivering our ESG 2023 Strategy.
• Improved the granularity of our TCFD Disclosure.
• Training and developing an approach to Task Force for
Nature-related Financial Disclosures (TNFD) and biodiversity.
Committee meetings and membership
The ESG Committee (the Committee) comprises three
Independent Non-Executive Directors and the CEO.
Member
Membership dates
Meeting
attendance
%
attendance
Claire Hawkings
(Chair)
Peju Adebajo
Louis Eperjesi
Joe Hudson
1 September 2018
26 November 2021
1 June 2018
2 January 2018
4/4
4/4
4/4
4/4
100%
100%
100%
100%
Read more – Biographies of the Committee members are
on page 74
The Committee receives assistance from the Group Company
Secretary & ESG Director, who attends in her capacity as the
member of the ELT responsible for ESG and Sustainability
issues at Ibstock.
Our specialist adviser from RSM, members of the ESG team,
and members of other group functions attend meetings at
the invitation of the Committee Chair.
As part of our governance process, the CEO was absent from
any discussions or final decision-making on any remuneration
target proposals.
Ibstock Plc | Annual Report and Accounts 2023
Positive progress has been made on TCFD
through more granular assessments of the
risks and opportunities of climate change
for Ibstock and the development of our
Carbon Transition Plan.
Read more: page 56
Biodiversity
The Committee continues to drive progress
in this area including the development
and roll-out of the Ibstock Biodiversity
Management System.
Social Impacts
We continue to make positive progress on
the Social Value Framework, the diversity
and inclusion agenda, and employee
development in line with the commitments
in our ESG 2030 Strategy.
We also continue to ensure rigour and
focus on our safety performance which
was evidenced by achieving a loss time
injury frequency rate (LTIFR) reduction of
60% against our target of 50% by 2023.
Committee effectiveness
During 2023, the Committee was deemed
to be operating effectively with strong
Committee leadership. The Committee
continues to focus on ensuring the right
proportion of Committee time is given
to training, progress updates, horizon
scanning and discussion to really consider
and debate issues. This will continue to
be a focus throughout 2024.
Claire Hawkings
Chair of the ESG Committee
5 March 2024
Introduction
Following the ESG Committee’s third year
in operation, I am pleased to introduce
the 2023 ESG Committee Report. Due
to the broad, varied and increasing remit
of this Committee, our workload over the
past year has continued to increase in
volume and complexity. As a Committee,
we continue to adapt and evolve our
annual programme of work to reflect the
increasing demands on the Committee
and the Group.
We are particularly encouraged by the
number of awards that Ibstock has won
this year and would like to congratulate all
involved in these testaments to the hard
work, ambition and achievements towards
a more sustainable Company.
ESG governance
The Board holds ultimate responsibility for
all ESG matters, but the Committee takes
the lead in managing the Company’s
approach and implementation of the
ESG framework, to enable us to meet
our commitments to all stakeholders.
The Committee is supported by an internal
ESG team and RSM, specialist advisers in
the ESG field who provide expert technical
advice to the Committee. Implementation
of the strategy is the responsibility of
the CEO, who, through the Executive
Leadership Team, oversees a number
of ESG working groups that each have
ownership of an area of the strategy.
These working groups are co-ordinated
by the ESG team. A full description of
how our ESG governance operates can
be found in the Responsible Business
section on page 44, and in the TCFD
statement on page 56.
The Committee continues to focus on
ensuring that the Committee and Board
are fully briefed and appropriately trained
on ESG matters. The Committee continues
to mature rapidly in both its knowledge
and understanding of the critical ESG
issues facing the Company. In this
endeavour, we have been supported
by our team of internal subject matter
experts as well as an independent
Committee adviser, who has provided
practical advice on a range of issues.
Net zero
A key part of our ESG strategy is
the commitment to become a
net zero carbon operation by 2040
Net zero commitment
A key part of our ESG Strategy is the
commitment to become a net zero
carbon operation by 2040 and achieving
a 40% reduction in Scope 1 and 2
emissions by 2030. The Committee
remains cognisant that the carbon
reduction journey will not always
show linear progression.
In 2023 we had a 37% reduction in our
absolute Scope 1 and 2 carbon emissions
against our 2019 baseline, and whilst a
large proportion of this reduction links to
lower production volumes during the year,
a number of operational efficiency and
dematerialisation projects have contributed
to this reduction.
The carbon intensity metric for 2023
was 0.151 tonnes of carbon per tonne
of production, an increase on 2022 due
to the estate running at a lower efficiency
as the market slowed.
The implementation and performance
of our Carbon Transition Plan will require
Group-wide focus and prioritisation, and
we are heartened by the progress that
Ibstock has made to align the Divisional
Strategies to the Carbon Transition Plan,
as this will create further momentum
and pace in the implementation of
carbon reduction activities.
The Committee remains confident that
the Group remains on course to achieve
the ambitious carbon commitments
made in our ESG 2030 Strategy.
Read more: page 44
Task Force on Climate-related
Financial Disclosures (TCFD)
and Transition Planning
The Committee has continued to oversee
the work of the internal TCFD working group,
reviewing progress at each meeting. Led by
the Group Financial Controller, the TCFD
working group comprises representatives
from the Company Secretariat, ESG and
Finance functions. It meets on a regular
basis to analyse and apply the various
developments and recommendations
published throughout the course of the
year and to ensure alignment with
Ibstock’s Business Plan.
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Ibstock Plc | Annual Report and Accounts 2023Additional informationFinancial StatementsGovernanceStrategic Report Audit Committee Report
Justin Read
Chair of the Audit Committee
Introduction
As Chair of the Audit Committee (the Committee), I am pleased
to present my report for the year ended 31 December 2023.
Committee purpose
To critically assess and make recommendations on the reporting,
control, risk management and compliance aspects of the Directors’
and the Group’s responsibilities.
Over the year, the Committee continued to deliver on its commitments,
retaining a focus on monitoring the integrity of the Group’s financial
statements. We have continued to oversee the work of the Group’s
External Auditor and the Internal Audit function, and to ensure that
the Company’s risk processes, and financial and compliance control
environments remain robust.
In addition to the programme of work that forms the basis
of our annual calendar, the Committee has spent significant time
reviewing the Group’s TCFD reporting processes, our principal risks
and uncertainties risk matrix, and enterprise control systems.
A continued feature of the Committee’s annual work programme is to
target specific risk areas with ‘deep dive’ sessions held with appropriate
members of the management team. Cyber risk continues to be
a significant risk area for the Group, in common with businesses
worldwide, and was the focus of our ‘deep dive’ session held in
November. During this review, the Committee was briefed on the
progress made over the last 12 months, and gained comfort that
appropriate protections were in place to secure the Group’s technology
estate. Due to the material cost and associated price risk, energy and
carbon risk management activities were also the focus of a ‘deep
dive’ session during the year and resulted in the Committee’s increased
comfort that appropriate processes and controls were in place.
Committee meetings and membership
At the year end, the Committee comprises five Independent
Non-Executive Directors.
Member
Membership dates
Meeting
attendance
%
attendance
Justin Read (Chair)
Peju Adebajo
Nicola Bruce
Louis Eperjesi
Claire Hawkings
Tracey Graham
1 January 2017
26 November 2021
29 March 2023
1 June 2018
1 September 2018
3 February 2016
to 27 April 2023
4/4
4/4
3/3
4/4
4/4
1/1
100%
100%
100%
100%
100%
100%
Read more – Biographies of the Committee members
are on page 74
94
“The Committee continues to work effectively to
oversee the reporting, control, risk management
and compliance within Ibstock.”
Priorities for 2024
The Committee will continue to focus on the delivery of its
core responsibilities, ensuring robust monitoring of the integrity
of the financial statements of the Company and any formal
announcements relating to the Group’s financial performance,
and reviewing significant financial reporting judgements
contained within them.
Specific focus areas for the Committee will be:
• Continuing to assess the effectiveness of the Group’s risk
management and internal control systems, and to make
recommendations to the Board in this regard
• Planning implementation of changes to UK Corporate
Governance Code
• Performing deep dives into key risk areas
• Reviewing management’s plans and recommendations
for identified areas of improvement in the Group’s
internal controls
• Progression on climate-related disclosures
Role and responsibilities
• To make recommendations on the reporting, control, risk
management and compliance aspects of the Directors’
and the Group’s responsibilities.
• To provide independent monitoring, guidance and challenge
to management in these areas.
• To provide a forum for reporting and discussion with the
Group’s External Auditor in respect of the Group’s half-year
and full-year results.
• To review and make recommendations to the Board on
the Group’s financial reporting, internal control and risk
management systems.
• To assess the effectiveness of the External Audit process.
• To assess the effectiveness of the External and Internal Auditor.
• To ensure high standards of corporate and regulatory reporting,
risk management and compliance, and the maintenance of an
appropriate control environment.
Read more – The Committee’s Terms of Reference are
available in full at www.ibstock.co.uk
Main activities of the Audit Committee during 2023
• Reviewed the full- and half-year results and 2022 Annual Report
• Considered the effectiveness of the risk management and
internal control processes.
• Review of Internal Audit activities.
• External Audit planning and reporting.
• Considered the effectiveness of the internal and external
audit functions.
• Reviewed significant accounting matters and judgements.
• Reviewed the Group’s TCFD reporting.
• Received updates on cyber and information security.
• Considered the FRC’s consultation on reforms to the UK
Corporate Governance Code.
• FRC’s Corporate Reporting Review Response.
Ibstock Plc | Annual Report and Accounts 2023
• Risk deep dives into Cyber Security, Energy
and Carbon procurement.
The Chair has regular meetings with the
CFO, External Audit partner and Internal
Audit partner to discuss key audit related
topics ahead of each Committee meeting.
In addition, the Committee also holds
private sessions with the CEO, CFO, External
Audit partner and RSM LLP (RSM), the
Internal Auditor, on a rotational basis
after each meeting.
Financial and narrative reporting
During the year, the Committee:
• Reviewed the full- and half-year results
and associated announcements and
recommended them to the Board
for approval.
• Reviewed the Group’s Annual Report to
consider whether, taken as a whole, it
was fair, balanced and understandable,
and whether it provided the necessary
information required for shareholders
to assess the Company’s position,
performance, business model and
strategy, and recommended it to the
Board for approval.
Further information on the format of
this review can be found on page 120
• Considered the appropriateness of
the Group’s accounting policies
and practices, focusing on areas of
significant management judgement or
estimation, and questioned the rationale
for decisions taken in application of the
policies. Policies and practices were
found to be appropriate and correctly
applied (see significant accounting and
key areas of judgement considered by
the Committee during the year below).
• Received updates on corporate reporting
and corporate governance from the
External Auditor.
• Considered the process for preparing
the 2023 Annual Report.
• Received updates on training for
Committee members, including changes
in financial reporting requirements and
company law.
• Considered the appropriateness of the
Group’s Viability Statement at the Full
Year, and Going Concern Statement
assumptions at the Half Year and Full
Year, including a review of the sensitivity
analysis and scenarios prepared by
management. The Viability Statement
and the Going Concern Statement are
set out on pages 70 and 71.
Significant accounting and
key areas of judgement
A key factor in the integrity of financial
statements is ensuring that suitable
accounting policies are adopted and
applied consistently on a year-on-year basis.
The Committee specifically uses the Audit
Planning meetings in June and November/
December each year to consider the
adoption of any relevant new standards,
proposed accounting treatments for
major transactions, significant reporting
judgements and key assumptions related
to those judgements. In addition, these
matters are reviewed at each Committee
meeting throughout the year.
Alternative Performance Measures
(APMs) and Exceptional items
Matter considered
The Group presents as exceptional items*
on the face of the income statement those
items of income and expense which, because
of the materiality, nature and/or expected
infrequency of the events giving rise to
them, merit separate presentation to allow
shareholders to further understand elements
of financial performance in the period,
so as to facilitate comparison with future
years and to assess trends in financial
performance, and in determination of
Directors’ variable remuneration.
The Committee conducted a review of the
items categories as exceptionally in the year,
including the items resulting from factory
closures and restructuring. Additionally, the
Committee sought views from the External
Auditor as to the appropriateness of items
categorised by management as exceptional.
Upon conclusion of this review, the Committee
concurred with management’s analysis of
proposed exceptional items.
Details of exceptional items* are set out
in Note 5 to the financial statements
Additionally, the Group financial statements
present a number of APMs within its
published financial information, including
the 2023 Annual Report, with the objective
of providing readers with further understanding
of financial performance in the period, in
order to facilitate comparison between
periods and to assess trends in financial
performance. Definitions of APMs used are
set out in Note 3 to the financial statements.
Committee’s response
In light of the guidance issued by the
European Securities and Markets Authority
and more recently the UK’s Financial
Reporting Council, the Committee continues
to assess management’s rationale for
including an item as an exceptional item*
and the wider use of APMs.
The Committee challenged management’s
rationale for the use of specific APMs; and
the link between APMs reported within the
financial statements and incentive measures
within the Directors’ Remuneration Report. The
Committee concluded that the presentation of
APMs gave additional clarity on performance
and were reconciled appropriately to reported
amounts, with sufficient prominence, and is
satisfied that the resulting presentation and
disclosure is appropriate.
Pension liability accounting
and disclosure
Matter considered
The Group has a defined benefit pension
scheme, which is closed to future accrual.
Management exercise their judgement
around the assumptions used by its actuary,
including the sensitivities to these assumptions,
to calculate the pension scheme liabilities
under IAS 19 (R) Employee Benefits.
As at 31 December 2023, the scheme
had an actuarial accounting surplus
of £9.8 million (2022: £15.2 million),
including liabilities of £363.9 million
(2022: £358.4 million), as detailed in
Note 20 to the financial statements.
Committee’s response
The Committee concurred with
management’s assessment that the
estimates used within the valuation of
the Group’s pension liability (including
future changes in discount rates, inflation,
increases in pension payments and life
expectancy) represented significant
sources of estimation uncertainty, as set
out within IAS 1 Presentation of Financial
Statements. A review of management’s
proposed disclosure in relation to this
estimation uncertainty was completed.
Additionally, the Committee reviewed
the assumptions with management and
sought views from the External Auditor
before it concluded on the appropriateness
of the actuarial balances disclosed.
This review considered the financial
assumptions used by management as
part of the actuarial valuation and the
range of possible assumptions using
available market data to assess the
reasonableness of the assumptions.
In conclusion, the Committee determined
that the actuarial assumptions used in
the valuation of the period end pension
liabilities were in an acceptable range,
disclosed appropriately, and was satisfied
that the resulting presentation and
disclosure was appropriate.
Impairment of non-current assets
Matter considered
The Group holds significant asset values in
the form of brands, customer relationships,
mineral reserves, land and buildings and
property, plant and equipment. At the
interim and year end balance sheet date,
these assets were considered for indications
of impairment. At the interim reporting
date, an impairment charge of £9.2 million
was recognised following the announcement
of the proposed cessation of production
at the Ravenhead site in the Clay Division.
There were no other general indicators
of impairment. At 31 December 2023
following the subsequent announcement
of the proposed cessation of production at
95
Ibstock Plc | Annual Report and Accounts 2023Additional informationFinancial StatementsGovernanceStrategic Report Audit Committee Report continued
the South Holmwood, Gloucester and
Hampshire in the Clay division and
Masoncrete and Castle Dawson in
Concrete division, a total impairment
charge of £20.6 million was recognised
within cost of sales within the Group’s
consolidated income statement.
At 31 December 2023, detailed
impairment tests assessing the value-in-
use (VIU) concluded that there was no
impairment at a Cash Generating Unit
(CGU) level across the Group for any
of those sites expected to continue in
operation. As at 31 December 2023,
the value of these non-current assets
was £572 million (2022: £546 million).
Committee’s response
In approving the interim and full year
financial statements of the Group, the
Committee considered and appropriately
challenged the analysis of impairment
proposed by management, in light of
the Group’s restructuring plans recently
approved by the Board. In addition,
the Committee carefully considered
management’s VIU assessments, the
related sensitivity analyses and the
disclosure included within the Group’s
financial statements. The Committee
sought views from the External Auditor
regarding management’s process for
completion of VIU impairment tests
and the conclusions reached.
In conclusion, the Committee assessed
the impairment charge as appropriate
and concurred with management’s view
that no further impairment was required.
The Committee carefully considered
management’s VIU tests and the associated
sensitivity analysis and assessed the
impact on the analysis of changes to the
underlying assumptions. This compared
the assumed performance of the CGUs to
the recently Board-approved budget and
strategic plan. Additionally, the Committee
sought the External Auditor’s views as to
the process adopted by management at
the year end date to assess VIU. Following
its review, the Committee concurred with
management’s judgement that no indicators
of impairment existed at the balance sheet
date for the sites that will continue in operation.
In conclusion, after reviewing the reports
from management, the Committee was
satisfied that the financial statements
appropriately reported the value of the
assets and that they were fairly stated.
The Committee reflected upon management’s
proposal to include the critical accounting
estimate disclosure relating to the
impairment of non-current assets and
concluded this was appropriate.
96
Going Concern and Viability Statements
On behalf of the Board, the Committee
reviewed the Going Concern and Viability
Statements prepared by management,
together with the supporting documentation
and sensitivity analysis including the
consideration of climate change. Details
of the review process and the conclusion
reached are set out on pages 70 and 71.
Following its review, the Committee
recommended the approval of both
statements to the Board.
Assessment of principal risks
The Committee considered the principal
risks and uncertainties and their associated
mitigation prepared by management in
advance of their submission to the Board.
This formed a key component of the
Board’s robust assessment of the emerging
and principal risks facing the Group, including
those that would threaten its business
model, future performance, solvency or
liquidity. The Group’s principal risks are
set out on pages 22 to 26.
Fair, balanced and understandable
It is the Board’s responsibility to determine
whether the 2023 Annual Report and
Accounts are fair, balanced and
understandable. The Committee reviewed
the process for preparing the 2023 Annual
Report, reviewed management’s analysis of
the 2023 Annual Report and how this met
the objectives of providing fair, balanced and
understandable disclosures that provided the
information necessary for shareholders to
assess the Company’s position, performance,
business model and strategy.
The Committee took into account the
following when completing this process:
• Input from the CEO and CFO on the
overall messages and tone of the
Annual Report
• That individual sections of the
Annual Report were drafted by
appropriate senior management with
regular review to ensure consistency
across the entire document
• That detailed reviews of appropriate
draft sections of the Annual Report were
undertaken by the Executive Directors
• That an advanced draft of the Annual
Report was reviewed by the Committee
and the auditors on a timely basis to
allow sufficient consideration and
was discussed with the CFO and senior
management prior to consideration
by the Board
• The results of an independent review
by an external corporate reporting
consultant
After consideration, the Committee arrived
at the decision to recommend that the
2023 Annual Report be approved by the
Board as fair, balanced and understandable.
The Board statement on a fair, balanced
and understandable Annual Report is set
out on page 120.
Risk management and internal control
The Committee supports the Board in
monitoring Ibstock’s exposure to risk and is
responsible for reviewing the effectiveness
of its risk management and internal control
systems and assisting in the assessment of
the Group’s principal risks and uncertainties.
Committee review of risk and controls
Twice a year the Committee considers in
detail the risk management and internal
control environment within Ibstock.
During this meeting, the Committee
considers the current and proposed
regulatory and best practice requirements.
It also reviews the internal control framework,
including Group’s culture and values, risk
management evaluation and procedures,
financial controls, Internal Audit focus and
processes, and ethics and compliance.
It also considers the improvement and
development areas within these areas.
Compliance with internal controls is
monitored throughout the year and
reported to the Audit Committee for their
consideration. The Committee receives
Internal Audit Reports throughout the
year from RSM. There is also six-monthly
independent testing of our internal
controls completed by RSM that is
shared with the Audit Committee.
During this process, input is received from
Group Finance, the Company Secretary
and Internal Audit (RSM).
Internal controls
The Group’s systems of internal control
are based on an assessment of risk, a
framework of control procedures to manage
risks and processes to monitor compliance
with procedures. The internal control systems
are designed to meet the particular needs
of the Group and the risks to which it is
exposed. Such systems can only provide
reasonable and not absolute assurance
against material misstatement or loss.
Management structure and authority
There is a clearly defined management
responsibility and reporting structure.
The Executive Leadership Team (ELT),
comprising the Executive Directors and
key functional heads, meets on a frequent
basis in order to consider the assessment
and control of risk, including review and
challenge of Divisional and head office risk
registers, and the consideration of strategic
and emerging risks. They also consider the
prioritisation and allocation of resources.
Ibstock Plc | Annual Report and Accounts 2023 The Group has an established
and well-understood management
structure with documented levels
for the authorisation of business
transactions and clear bank mandates
to control the approval of payments.
Outcomes of the review
No material weaknesses were identified
and good progress has been made on
the recommendations from last year.
A number of improvement areas were
identified as part of this review which
are being actioned and tracked on a
monthly basis by both management
and Internal Audit with progress reporting
to the Audit Committee.
These areas included improved evidential
support for controls operation and
compliance, and continuing to develop
and increase the compliance of monthly
control reporting.
External Auditor
Following a competitive tender
process conducted in 2016, Deloitte LLP
(Deloitte) was appointed as auditor for
the financial year commencing 1 January
2017. The Committee received formal
confirmation from Deloitte itself that
the audit engagement team, and others
in the firm as appropriate, and, where
applicable, all Deloitte network firms were
and remained independent of the Group.
The Committee’s policy is that the role of
External Auditor will be put out to tender
at least every 10 years in line with the
applicable rules, or at other times should
it be required by specific circumstances.
Lee Highton is the current audit partner,
having completed his second year in role
for the year ended 31 December 2023.
The Company has complied throughout
the year under review with the Statutory
Audit Services for Large Companies
Market Investigation (Mandatory Use of
Competitive Tender Processes and Audit
Committee Responsibilities) Order 2014.
Financial Reporting Council (FRC) Review
The FRC elected to review the Company’s
2022 Annual Report and Accounts in
accordance with Part 2 of the FRC Corporate
Reporting Review Operating Procedures.
Following this review, no questions or
queries were raised. The FRC noted some
recommendations to disclosure and analysis
within the Annual Report which have
considered and adopted where appropriate.
External Audit relationship
• Reviewed and concurred with Deloitte’s
plans for their review of the 2023
half-year statement and audit of
the 2023 full-year financial results
• Reviewed and considered the
reports presented by Deloitte to the
Committee following the half-year
review and full-year audit
• Reviewed the performance of the
External Auditor and the effectiveness
of the External Audit process
• Discussed and approved the fees
for audit and non-audit services
and obtained assurance on the
objectivity and independence of
the External Auditor, taking into
consideration relevant professional
and regulatory standards
• Discussed and approved the Directors’
Letter of Representation provided
to Deloitte
• Reviewed and approved the policy
for the employment of former
employees of the External Auditor,
without amendment, confirming with
management that no such employees
had been appointed during 2023
• Held planned meetings with Deloitte,
following Committee meetings, without
management present, on two occasions.
No material issues were brought to the
Committee’s attention at those meetings.
• Recommended to the Board that a
shareholder resolution should be proposed
for the reappointment of Deloitte
• Considered the adequacy of the
Group’s procedures with regard to
the objectivity and independence
of the External Auditor
The Committee formed the opinion
that Deloitte had demonstrated their
independence and objectivity.
Effectiveness of the External Auditor
The Committee has the responsibility
for overseeing the Group’s relationship
with the External Auditor and advises
the Board on their appointment/
reappointment, their effectiveness,
independence and objectivity, and
discusses the nature and results of
the audit with the External Auditor.
The review of this year’s External
Audit process included consideration
of the following:
• The effectiveness of the External
Audit firm
• Quality controls
• The audit team
• Audit fee
• Audit communications and effectiveness
• Governance and independence
• Ethical standards
• Potential impairment of independence
by non-audit fee income
• Deloitte’s ability to make valid
improvement suggestions
As part of the review of the effectiveness of
the External Audit process, the Committee
received a report on the External Auditor’s
quality control procedures and conducted
a formal evaluation procedure.
In addition to reviewing the formal report
received from the External Auditor, which
outlines how points raised by them have
been addressed by management, feedback
is also sought on the conduct of members
of the finance team during the audit
process. The Committee Chair also met
with the lead audit partner outside the
formal Committee process.
The Committee also considers the
effectiveness of management in the
External Audit process in respect of the
timely identification and resolution of
areas of accounting judgement with input
from the External Auditor as appropriate.
They also consider management’s timely
provision of the draft half-year results
announcement, Annual Report and
supporting documentation for review
by the auditor and the Committee.
Group auditor independence
and non-audit services
The non-audit services policy (Policy) sets
out clearly the non-audit services that may
be provided by the External Auditor.
Under the Policy, prior approval is required
by the Committee for any non-statutory
assignments where the fee would exceed
£10,000, or where such an assignment
would take the cumulative total of
non-audit fees paid to the External Auditor
over 70% of that year’s statutory audit
fees. However, when appropriate, a detailed
calculation will be performed to ensure that
the Group is compliant with the European
Union’s Statutory Audit Framework.
This Policy is reviewed on an annual basis
and was adopted without amendment
in December 2023. The External Auditor
is responsible for the annual audit of the
main Group subsidiary companies and
other services which the Committee
believe it is best placed to provide.
Details of the amounts paid to the External
Auditor are set out in Note 6 to the Group
consolidated financial statements. The ratio
of audit fees to non-audit fees was 11:1.
97
Ibstock Plc | Annual Report and Accounts 2023Additional informationFinancial StatementsGovernanceStrategic Report Audit Committee Report continued
any control weaknesses identified as well
as management’s actions to address
control recommendations.
RSM have provided Ibstock’s Internal
Audit services since February 2017.
Review of Internal Audit activities
• Reviewed reports presented by RSM on
Internal Audit assignments that had
been completed during the year and
discussed the results and agreed actions
arising from RSM’s recommendations
• Reviewed reports presented by
RSM on the testing of the design
and operating effectiveness of
control areas in anticipation of
potential new requirements arising
from the ‘Restoring Trust in Audit and
Corporate Governance’ consultation
• The Committee reviewed, and were
satisfied with, management’s
responsiveness to RSM’s findings
and recommendations
• Agreed a plan of work for the 2024
Internal Audit programme with RSM
• The Committee met with RSM, without
management present, on two occasions
• No material issues were brought to the
Committee’s attention at those meetings
• Oversight of risk and internal control
• Reviewed principal business risks, risk
management processes and internal
controls. Further information can be
found in the principal risks and
uncertainties section on pages 22 to 26
• Received a report from the CFO on
the internal controls operating in
the business and any associated
action plans
• Reviewed fraud risks (including the results
of a fraud risk assessment), the Code of
Business Conduct and Whistleblowing
Policy. The review did not identify any
material matters of interest
• Concluded that, whilst there remained
opportunities to improve in certain areas,
overall the systems of internal control
and risk management were effective
Effectiveness of Internal Audit
The Committee is responsible for overseeing
the effectiveness of the Internal Auditors.
The Committee received and considered
the feedback provided about the Internal
Audit effectiveness that was collated using
a questionnaire sent to the Committee
members and Management.
The Committee considers that RSM
continue to be independent and that
the Internal Audit function is effective.
Compliance and whistleblowing
On behalf of the Board, the Committee
reviews the operation of the Group’s
procedures that are in place for the
detection of fraud and the systems
and controls in place to prevent a
breach of anti-bribery legislation.
The Committee receives regular updates
at each meeting and discusses any
incidents brought to its attention. It also
receives updates on the operation of the
Company’s confidential whistleblowing
arrangements including those material
incidents raised through the whistleblowing
line. A summary of all incidents raised
through the whistleblowing line is presented
to the Board twice a year, further details
of which can be found on page 98.
A non-material fraud incident was identified
via our whistleblowing processes. Following
an independent investigation by our Internal
Auditors at one site, four factory employees
were found to have colluded to circumvent
business process and controls. Ibstock
have taken immediate steps to put in
place additional safeguards to prevent
this from occurring again and are pursuing
enforcement action against the individuals
involved (who no longer work in the business).
The Group is committed to a zero
tolerance position with regard to bribery.
Anti-bribery guidance and training is provided
to employees, as appropriate, applying what
the Group has determined to be a risk based
and proportionate approach. The Group
maintains a record of all employees who
have received this guidance and training.
Committee effectiveness
The Committee effectiveness was
considered as part of the External Board
Effectiveness Review. The output from this
process was reviewed by both the Board
and the Committee itself, in compliance
with the Code. Further information
regarding the evaluation process can be
found in the Corporate Governance Report
on page 84. The Committee scored highly
overall and was considered to be chaired
effectively. The Committee performed their
role and undertook their responsibilities in
an effective manner. No specific developmental
areas were identified in the evaluation.
Justin Read
Chair of the Audit Committee
5 March 2024
The Committee considers that the External
Auditor continues to be independent.
Deloitte has indicated its willingness to
continue in office and the Committee has
recommended Deloitte’s reappointment
to the Board. A resolution to reappoint
Deloitte as the External Auditor will therefore
be proposed at the AGM to be held on
16 May 2024.
Auditor appointment
The Audit Committee reviews annually
the appointment of the auditor (taking
into account the auditor’s effectiveness
and independence and all appropriate
guidelines) and makes a recommendation to
the Board accordingly. Any decision to open
the external audit to tender is taken on the
recommendation of the Audit Committee.
There are no contractual obligations that
restrict the Company’s current choice of
external auditor. Following the last tender
process, Deloitte was appointed as auditor of
the Company in 2017. Lee Highton became
the lead audit partner for the year ended
31 December 2022, following the rotation of
the previous partner, and will remain as audit
partner for the year ending 31 December
2024 onwards. The Company is required
to have a mandatory audit tender after 10
years and, as the Audit Committee considers
the relationship with the auditors to be
working well and remains satisfied with
their effectiveness and the quality of audit
work and professional capabilities, the Audit
Committee does not currently anticipate
that it will conduct an audit tender before
it is required to do so in 2026. The Audit
Committee considers this to be in the best
interests of the Company’s shareholders for
the reasons outlined above and will continue
to monitor this annually to ensure the timing
for the audit tender remains appropriate,
taking into account the effectiveness and
independence of the auditor.
The Company has complied with the
provisions of The Statutory Audit Services
for Large Companies Market Investigation
(Mandatory Use of Competitive Tender
Processes and Audit Committee
Responsibilities) Order 2014 (CMA Order)
for the year ended 31 December 2023.
Internal Audit
The provision of Internal Audit services is
outsourced to RSM and the Internal Audit
programme for the subsequent year is
approved by the Committee in December
each year. This contains a schedule of
reviews to audit a range of processes and
controls throughout the year covering each
component of the Group. Updates on the
status of audits against the annual Internal
Audit plan are provided to the Committee
by RSM on a regular basis. These set out
98
Ibstock Plc | Annual Report and Accounts 2023 Directors’ Remuneration Report
“The focus of the Committee this year has been
on ensuring rewards are commensurate with
performance in a challenging trading environment”
Business performance in FY23
Against the backdrop of a very challenging market, Ibstock has delivered
a resilient and robust performance this year. Despite the reduced activity
levels in our core residential market, through continued focus on customer
service and disciplined capacity and cost management, the business
delivered adjusted EBITDA* of £107 million (2022: £140 million),
in line with expectations.
This has been achieved through:
• A strong commitment to customer service and execution, supporting
stable pricing in a tougher market environment, and retaining our
position of UK market leadership as the number 1 manufacturer
of clay bricks by production capacity.
• An intense focus on cost and capacity management, with the business
benefiting from a major restructuring programme undertaken towards
the later part of the year.
• Continued development of our compelling growth strategy, including
investment in acquisitions and the development of Ibstock Futures to
capture growth from faster-growing segments of construction markets.
The Group remains focused on its medium term financial targets.
Our margin performance in 2023 remained broadly in line with these
targets, and we continue to manage the business with a commitment
to delivering in line with these targets over the cycle.
We have also continued to deliver progress against our ESG 2030 Strategy.
Some notable achievements include: a reduction in the carbon per tonne of
product; our in-year Lost Time Incident Frequency Rate (LTIFR) performance
remains ahead of our medium-term target; and we have increased the
representation of females in our senior management team.
Remuneration outcomes for FY23
At all times, the Committee has carefully balanced the interests of all
stakeholders as well as the wider business and societal context in making
these decisions.
In line with our remuneration philosophy, incentive outcomes are largely
driven by corporate performance and shareholder value creation. Consistent
with previous years, the 2023 annual bonus for our Executive Directors
was based 70% on the Group’s financial performance and 30% on
non-financial objectives.
Annual Bonus
Full details of the targets and performance against them is set out on page 108.
• Adjusted EBITDA* for FY 2023 accounted for 50% of total bonus.
Despite resilient performance, as a consequence of challenging
trading conditions, the adjusted EBITDA* threshold was not met.
• Adjusted Operating Cashflow for FY 2023 accounted for 20% of total
bonus. Reflecting the reduction in adjusted EBITDA* from lower activity
levels in our core residential markets, alongside continued investment
in projects to support our medium-term growth objectives, the Adjusted
Operating Cashflow threshold was also not met.
• Directors each had a set of non-financial objectives that were specific
to their roles and the Company’s strategic ambitions. The Committee
noted the very strong performance in relation to these non-financial
targets, and after detailed consideration, determined that a bonus
of 29.4% (out of a total potential award of 30%) was appropriate.
99
Nicola Bruce
Chair of the Remuneration Committee
Annual Statement
I am pleased to share the Remuneration Committee’s report, and my
first as Chair of the Committee. I would like to thank my predecessor,
Tracey Graham, for her service to the Committee and for her valuable
support in ensuring a smooth handover. I would also like to thank my
fellow Committee members for their support and contribution to the
work of the Committee throughout the year.
Our directors’ remuneration policy received strong support at the
2022 AGM (with 99% of votes cast in favour). I can confirm that we
have operated in line with the approved policy in 2023, a summary
of which is included in this report.
This report consists of three sections:
• Annual Statement: A summary of the work of the Committee
during the year and our approach to remuneration
Read more on pages 99 to 102
• Summary of the 2022 Directors’ Remuneration Policy: Details
the framework and parameters within which Directors are paid
Read more on pages 103 to 106
• Annual Report on Remuneration: Sets out the pay and incentive
outcomes for the year under review and how the Remuneration
Committee intends to implement the Policy in 2024
Read more on pages 107 to 116
The Committee considers that the Policy has worked well in 2023 and
continues to support our strategy effectively. We will therefore not
be asking shareholders to vote on a revised Policy at the 2024 AGM,
in line with the usual three-year timetable.
Find out more
CEO Review p10
Key performance indicators p20
Responsible Business p37
Financial Review p3
Our stakeholders p38
Ibstock Plc | Annual Report and Accounts 2023Additional informationFinancial StatementsGovernanceStrategic Report Directors’ Remuneration Report continued
Supporting colleagues with financial
wellbeing has also been a key focus this
year and this formed an important part of
our overall wellbeing agenda. This support
was importantly leveraged during the period
of organisational change, during which all
impacted employees were supported with
outplacement support. The Committee
supported the ELT’s recommendation to allow
early vesting of the Fire Up share options for
employees impacted by the restructuring efforts.
Shareholder support at the 2023 AGM
The Board regularly engages with our
shareholders in order to maintain their support
and to ensure we have a transparent executive
reward structure aligned to the shareholder
experience. Last year, we sought approval for our
Directors’ Remuneration Report and updated
Long-Term Incentive Plan scheme rules. I would
like to thank shareholders once again for your
support for both remuneration votes, which
achieved support of 97% and 98% respectively.
This Remuneration Report will be subject to
the usual advisory shareholder vote and I look
forward to receiving your support at our 2024
AGM, where I will be available to respond to any
questions shareholders may have on this report
or in relation to any of the Committee activities.
As we have entered into the final year of our
three-year policy, during 2024, we will also
be undertaking a detailed review of our Policy
and consulting with shareholders on potential
changes ahead of the 2025 AGM.
In the meantime, if you would like to discuss any
aspect of our Remuneration Policy, please feel
free to contact me via the Company Secretary
(Company.Secretariat@ibstock.co.uk).
Nicola Bruce
Chair of the Remuneration Committee
5 March 2024
The Committee is conscious of the sensitivity
involved with paying bonus when financial
targets have not been achieved and has
considered this very carefully. In particular,
the Committee considered the importance of
the Executive Directors’ personal performance
objectives and noted their relevance to external
stakeholders. Objectives relating to employee
wellbeing, the customer experience, the securing
of future growth, and the operational and
financial resilience of the company are crucial
to the company’s medium and long term
performance. The delivery of these challenging
objectives is considered key to future financial
success and ensuring that Ibstock is well positioned
to take full opportunity of a market recovery.
On balance, and after detailed consideration, the
Committee concluded that the formulaic annual
bonus outcome of 29.4% is an appropriate
reflection of the commitment and performance
of our Executive Directors in extremely tough
market conditions.
LTIP Vesting
LTIP awards granted in 2021 were based on
three-year EPS, ROCE, TSR and ESG targets.
• The EPS measure for FY23 accounted for
30% of the award. As a consequence of
challenging trading conditions, the EPS
threshold target was not met and this
component of the award vested at 0%.
• Relative TSR performance for the three year
period from the date of grant (25 March
2021) accounted for 40% of the award.
Whilst the performance period ends in March
2024, indicative indications of performance
suggest that this measure will vest at 0%.
• ROCE for the three year performance from
FY21 to FY23 accounted for 20% of the
award. The three year average adjusted
ROCE bonus-outturn was 19.45% and
this part of the award vested in full.
• The ESG measure of carbon intensity (tonnes
of carbon per tonnes of finished product)
accounted for 10% of the award. Based on
the commendable actions of the business
to reduce the carbon intensity of production,
this measure will vest at 5.5%.
Based on the performance across these four
measures, the overall estimated vesting of
the 2021 LTIP is 25.5%. Full details of these
performance targets and vesting are detailed
on page 108.
The Committee carefully considered the formulaic
outcomes under the annual bonus and the LTIP
and is satisfied that, taken together, there is no
basis for operating discretion (either upwards or
downwards) in respect of these outcomes.
The year ahead
Our two Executive Directors will receive base
salary increases of 3% each, which is aligned
to the increase provided to other ELT members
as well as the wider workforce. The Committee
believes the CEO and CFO salary increases
are merited and reflect their considerable
contributions during the year. Their fixed
remuneration remains in line with their relative
experience and relevant market benchmarks.
Pension contribution rate will continue to
be 10% of salary which is line with the rate
offered to the wider workforce.
The annual bonus opportunity remains at
125% of salary and, as in FY23, 70% of total
award will be based on financial metrics and
30% on personal objectives.
• Adjusted EBIT* will account for 50% of
total award. The Committee considers
that Adjusted EBIT* is a more appropriate
measure of profitability for Remuneration
purposes than Adjusted EBITDA* given its
closer alignment with shareholder returns;
• An adjusted cash flow measure will account
for 20% of total award; and
• Non-financial personal objectives will
account for 30% of total award.
The LTIP grant level in FY24 will be 150%
of salary and will be subject to adjusted EPS*,
ROCE, relative TSR, and ESG objectives.
Looking after our employees
Building on the success of the Ibstock Story
last year, this continued to be at the heart of
our employee engagement agenda throughout
the year. It was particularly pleasing to note the
strong progress in our employee engagement
survey results. These results demonstrated a
notable increase in levels of inclusion and
belonging amongst our employee base and
provide a strong foundation for future years.
Our commitment to employee engagement
is underpinned by regular working groups,
communication forums, and open consultation
throughout the year. Members of this Committee
attend a regular engagement forum called the
Listening Post: it has been a pleasure to meet
with staff from across the Group and listen to
their feedback and suggestions.
The report has been prepared in accordance with the Companies Act 2006, Schedule 8 of the Large and Medium-sized Companies and Groups
(Accounts and Reports) Regulations 2008 as amended in 2013, the provisions of the UK Corporate Governance Code and the UKLA’s Listing Rules.
100
Ibstock Plc | Annual Report and Accounts 2023 Remuneration
at a glance
How our Executives were paid in FY23
Executive Director total remuneration in FY22 and FY23
Joe Hudson (CEO)
Total Remuneration
Chris McLeish (CFO)
Total Remuneration
£895
000s
£611
000s
63
514
191
127
51
346
129
85
FY23
514
12
51
191
127
895
FY22
486
20
97
610
220
1,433
£000s
Base Salary
Benefits
Pension
Bonus
LTIP
Total
FY23
346
16
35
129
85
611
FY22
327
16
33
411
148
934
£000s
Base Salary
Benefits
Pension
Bonus
LTIP
Total
Share ownership
Joe Hudson (CEO)
Chris McLeish (CFO)
72%
280%
104%
312%
Current
Shareholding
72%
Value of unvested
LTIP awards 208%
Current
Shareholding
104%
Shareholding
Requirement
200%
Value of unvested
LTIP awards 208%
Shareholding
Requirement
200%
Unvested LTIP awards are net of tax and inclusive of dividend equivalents
2023 Bonus Performance
2023 indicative LTIP Performance
Adjusted EBITDA*
Adjusted
Operating Cash
Non-Financial
Objectives
0%
0%
Adjusted EPS*
ROCE
Relative TSR
(Estimate – performance period
ends March 2024)
ESG Measure
0%
0%
5.5%
29.4%
20%
Threshold
Maximum
Threshold
Maximum
Total 2023 Bonus Performance = 29.4%
Total Estimated 2021 LTIP Performance = 25.5%
101
Ibstock Plc | Annual Report and Accounts 2023Additional informationFinancial StatementsGovernanceStrategic Report Directors’ Remuneration Report
Remuneration at a glance continued
How Executives will be paid in 2024
An overview of our Policy and how it is proposed to apply in FY24 is set out below.
Fixed pay: to recruit and reward Executives of a high calibre
Remuneration for the year ending 31 December 2024
Salary
Pension
Benefits
CEO: £536,143
CFO: £360,724
A 3% increase in line with the general increase received by senior employees and the average
Company-wide increase.
Salary increases are effective from 1 April 2024 to align with the approach for the wider workforce.
10% of salary
The increases are in the context of strong individual performances in their respective roles.
Aligned with the maximum pension opportunity for the wider workforce.
Includes private medical cover, a company car or a cash alternative, and death in service cover.
Annual and Deferred Bonus Plan (ADBP)
To incentivise and reward the achievement of annual
financial and operational objectives which are closely
linked to the corporate strategy.
Two-thirds
of bonus paid in cash
One-third
of bonus deferred
into shared for
three years
Maximum opportunity: 125%
Malus and clawback provisions apply
FY24 Bonus Metrics
50% Adjusted EBIT*
20% Adjusted Cashflow
Bonus Measure
30% Non-Financial Objectives
Long Term Incentive Plan (LTIP)
To incentivise and recognise successful execution of the
business strategy over the longer term. To align the long-term
interests of Executive Directors with those of shareholders.
FY24 LTIP Metrics
Our FY24 LTIP metrics are designed to incentivise and reward
the achievement of long-term financial and ESG objectives which
are aligned to our corporate strategy and our ESG ambitions.
3-year
performance period
2-year
holding period
Maximum opportunity: 150%
Malus and clawback provisions apply
Shareholding Guidelines
200% in employment
Executive Directors are expected to build a shareholding
equivalent to 200% of base salary over five years.
102
30%Adjusted Earnings per
Share (EPS)*
20% Total Shareholder Return
(TSR)
30% ROCE*
20% ESG
Performance period commences
on 1 January 2024
200% post-cessation
Executive Directors have a post-cessation minimum
shareholding requirement of 200% of their base salary
(or actual holding if lower) for two years from leaving.
Ibstock Plc | Annual Report and Accounts 2023
Directors’ Remuneration
Policy Summary
Introduction
The Directors’ Remuneration Policy was approved by shareholders at the AGM on 21 April 2022 and became effective from that date.
The Policy applies for the period of three years from the date of approval. This part of the Directors’ Remuneration Report summarises
the key components of Ibstock’s remuneration arrangements for the Directors which form part of the Policy. A full copy of the Policy
can be found in the 2021 Annual Report and Accounts on our website at www.ibstock.co.uk.
Summary of 2022 Policy for Executive Directors
Link to strategic objectives
Operation
Maximum opportunity
Performance metrics
Base salary
Provides a base level of
remuneration to support
recruitment and retention
of Executive Directors.
Benefits
Provides a benefits package in
line with practice relative to its
comparator group to enable the
Company to recruit and retain
Executive Directors.
Pensions
Provides retirement benefit to
enable the Company to recruit
and retain Executive Directors.
Annual and Deferred Bonus Plan
(ADBP)
The ADBP provides a significant
incentive to the Executive Directors
linked to achievement in delivering
goals that are closely aligned with
the Company’s strategy and the
creation of value for shareholders.
Long Term Incentive Plan (LTIP)
The purpose of the LTIP is to
incentivise and reward Executive
Directors in relation to long-term
performance and achievement of
Group strategy.
An Executive Director’s base salary
is set on appointment and reviewed
annually or when there is a change
in position or responsibility.
In general, salary increases for
Executive Directors will be in line
with the increase for employees
across the Group.
None
An alternative approach may
be taken in relation to the
individuals who are recruited
or promoted to the Board.
The maximum will depend on
the cost of providing the relevant
benefits. The Company has
monitoring practices in place to
ensure spend on benefits is efficient.
• 10% of salary for
Executive Directors
None
None
• Up to 125% of salary
Percentage of maximum bonus
earned for levels of performance:
• Threshold: 0%
• On-target: 50%
• Maximum: 100%
A minimum of 50% of the targets will
be financial. The Board will determine
the bonus to be delivered following
the end of the relevant financial year.
Actual targets, performance achieved
and awards made will be published
at the end of the performance period.
• Up to 150% of salary
• Up to 200% of salary in
exceptional circumstances
25% of the award will vest for
threshold performance. 100% of
the award will vest for maximum
performance. There is straight line
vesting between these points.
The performance conditions for the
2024 LTIP awards are Adjusted EPS*
growth, comparative TSR, ROCE and
ESG. The Committee may change
the balance of the measures, or use
different measures for subsequent
awards, as appropriate.
The Executive Directors receive
a company car or car allowance,
private health cover and death
in service cover.
The Company operates a defined
contribution pension or salary
supplement arrangement for
Executive Directors.
The annual bonus will be paid
in cash and deferred shares.
The Committee will determine
each year what part of the ADBP
is deferred for three years.
The minimum value of deferred
shares is one-third of the bonus
earned.
The ADBP contains clawback
and malus provisions.
Awards are granted annually
and vest at the end of a three-
year period.
A post-vesting holding period of
two years will apply for the LTIP.
The Committee may award
dividend equivalents in shares
on awards to the extent that
these vest.
The LTIP contains clawback
and malus provisions.
103
Ibstock Plc | Annual Report and Accounts 2023Additional informationFinancial StatementsGovernanceStrategic Report Directors’ Remuneration Report
Remuneration Policy Summary continued
Summary of 2022 Policy for Executive Directors continued
Element of
remuneration
Sharesave Plan
(SAYE)
Link to strategic objectives
Operation
Maximum opportunity
Performance metrics
The plan is designed to
encourage all employees
to become shareholders
in the Company.
All employees including
Executive Directors are eligible
to participate in the plans.
Maximum opportunity for
awards and purchases are
kept in line with HMRC limits.
The Company, in accordance
with the legislation, may
impose objective conditions
on participation in the plan
for employees.
Minimum
shareholding
requirement
Executive Directors are expected to build up over a five-year period and then subsequently hold a shareholding equivalent to 200%
of base salary. This will include deferred shares at their net-of-tax value and shares subject to a holding period at their full value.
Adherence to these guidelines is a condition of continued participation in the equity incentive arrangements.
In addition, a post-cessation minimum shareholding requirement will apply to Executive Directors who leave the Company.
Leavers will have a requirement to hold 200% of their pre-cessation shareholding requirement for two years from leaving.
Alignment of Policy with requirements under the UK Corporate Governance Code
Ibstock has applied the principles of the UK Corporate Governance Code (the Code) and complied with its relevant provisions.
The Committee has considered the principles set out in Provision 40 of the Code and explains below how these have been addressed:
Clarity
To ensure that the remuneration arrangements are transparent and promote effective engagement with shareholders and the
workforce, we:
• Proactively consult our shareholders on any changes to the Remuneration Policy and seek their views.
• Regularly engage with the workforce and seek to bring employee voice in the Boardroom.
• Always seek to improve the quality of disclosure in our DRR and conduct an annual review of disclosure provided to add relevant
information to increase transparency.
Simplicity
To ensure we avoid complexity and improve understandability within our remuneration structures:
• The structure of the ADBP and LTIP are in line with standard UK market practice and hence should be familiar to all stakeholders.
• Performance metrics are chosen to focus on the key operational and financial performance objectives of the business.
Risk
Ibstock’s remuneration arrangements reputational and other risks from excessive rewards, and behavioural risks that can arise
from target-based incentive plans, are identified and mitigated. The Policy helps mitigate risks as follows:
• The Committee has discretion to override formulaic outcomes in instances where payouts do not accurately reflect the overall
performance of the business.
• Malus and clawback in incentive plan rules provide flexibility to prevent excessive payouts in exceptional circumstances.
• Post-vesting holding periods and shareholding requirements encourage focus on sustainable performance over the long term.
• Incentive performance metrics are aligned with the Company’s strategy.
• Maximum award limits are set within the Policy.
Predictability
We identified and explained at the time of approving the Policy the limits or discretions on the range of possible values of rewards
to individual directors. This includes:
• The Policy sets out potential levels of vesting available for varying degrees of performance (threshold, on-target and maximum)
and calculation methodology.
• The DRR illustrates graphically the potential levels of remuneration received by Executive Directors under various performance scenarios.
Proportionality
The link between individual awards, the delivery of strategy and the long-term performance of the Company is clear and our outcomes
do not reward poor performance:
• The ADBP and LTIP reward Executive Directors for delivering the Company’s strategy.
• The use of deferral and multi-year performance periods ensure Executive Directors are focused on long-term sustainable performance.
• The Committee’s discretion to adjust outcomes prevents Executive Directors from being rewarded for poor underlying business performance.
Alignment to culture
Incentive schemes should drive behaviours consistent with Company purpose, values and strategy.
• Alignment of our incentives structure to strategy is illustrated on page 105. Strategic priorities are supported by the Company’s culture.
• In addition, the Board believes that our remuneration structure is structured to drive the right culture and performance and is
aligned with the Company’s values.
104
Ibstock Plc | Annual Report and Accounts 2023 Notes to the Remuneration Policy table
Recovery and withholding
Awards under the Annual and Deferred Bonus Plan (ADBP) and the Long-Term Incentive Plan (LTIP) are subject to recovery and
withholding provisions which permit the Remuneration Committee, at its discretion, to reduce the size of any future bonus or share
award granted to the colleague, to reduce the size of any granted but unvested share award held by the colleague, or to require the
colleague to make a cash payment to the Company.
The circumstances in which the Company may apply the recovery and withholding provisions are the discovery of a material misstatement
of financial results, a miscalculation or error in assessing any condition (including any performance condition) applying to the award,
in the event of fraud or gross misconduct committed by the colleague, or where there has been corporate failure or reputational damage.
In respect of cash bonus payments under the ADBP, the recovery and withholding provisions apply for three years from the date of
payment of the bonus.
In respect of share awards under the LTIP, the recovery and withholding provisions apply for two years for awards made under the
2015 LTIP scheme rules, and five years for awards made under the 2023 LTIP scheme rules.
Executive Director remuneration scenarios
The charts below show an estimate of the 2024 remuneration package for each Executive Director under four performance scenarios,
which are based on the Remuneration Policy set out above.
Joe Hudson (CEO)
£m
Chris McLeish (CFO)
£m
2.5
2.0
1.5
1.0
0.5
0
£2,478
£402
16%
£2,075
£804
39%
£804
32%
£670
32%
£670
27%
2.5
2.0
1.5
1.0
0.5
£413
£1,338
£402
30%
£335
25%
£601
£1,675
£270
16%
£1,405
£541
39%
£541
32%
£450
32%
£450
27%
£909
£270
30%
£225
25%
£536
89%
£536
45%
£536
29%
£536
24%
£360
87%
£360
45%
£360
29%
£360
25%
Minimum
On-Target
Maximum
Maximum
including
share price
appreciation
0
Minimum
On-Target
Maximum
Maximum
including
share price
appreciation
■ Fixed ■ Annual Bonus ■ LTIP ■ Share Price Appreciation
■ Fixed ■ Annual Bonus ■ LTIP ■ Share Price Appreciation
Assumptions:
Salary
Benefits
Pension
Annual Bonus
LTIP
Minimum
On-Target
Maximum
Maximum including Share Price Appreciation
0%
0%
As at 1 April 2024
Based on the 2023 value of benefits
10% of Salary
50%
50%
100% of maximum
(being 125% of salary)
100% of maximum
(being 150% of salary)
As per the maximum, plus a 50% share price
increase over three years is assumed
105
Ibstock Plc | Annual Report and Accounts 2023Additional informationFinancial StatementsGovernanceStrategic Report
Directors’ Remuneration Report
Remuneration Policy Summary continued
Executive Director service contracts
The Company does not have agreements with any Director that would provide compensation for loss of office or employment
resulting from a takeover except that provisions of the Company’s share schemes and plans may cause options and awards
granted to colleagues under such schemes and plans to vest on a takeover. Directors’ service agreements are kept for inspection
by shareholders at the Company’s registered office.
Name
Joe Hudson
Chris McLeish
Date of joining Ibstock
2 January 2018
1 August 2019
Date of service contract
12 October 2017
5 February 2019
Notice period
12 months either party
12 months either party
Non-Executive Directors’ terms of engagement
Each of the Non-Executive Directors are engaged under a market-standard Non-Executive Director appointment letter, which states
that the appointment will continue for a renewable three-year term provided that the appointment must not continue for more than
nine years in total. In any event, each appointment is terminable by either party on one month’s written notice with no other right to
compensation for loss of office.
All Non-Executive Directors are subject to annual re-election at each AGM. The dates of appointment of each of the Non-Executive
Directors serving at the date of this report are summarised in the table below.
Name
Jonathan Nicholls (Chair)
Peju Adebajo
Nicola Bruce
Louis Eperjesi
Claire Hawkings
Justin Read
Date of joining Ibstock
22 September 2015
26 November 2021
29 March 2023
1 June 2018
1 September 2018
1 January 2017
Date of service contract
11 September 2015
25 November 2021
14 March 2023
19 April 2018
19 April 2018
19 December 2016
The Chair, in consultation with the Executive Directors, is responsible for proposing changes to the Non-Executive Directors’ fees.
The Committee is responsible for proposing changes to the Chair’s fees.
In proposing such fees, account is also taken of the time commitments of the Group’s Non-Executive Directors. The decision on fee
changes is taken by the Board as a whole.
Individual Non-Executive Directors do not take part in discussions in relation to their own remuneration.
106
Ibstock Plc | Annual Report and Accounts 2023 Annual Report
on Remuneration
This section of the Report has been prepared in accordance
to with the UK disclosure requirements: the Large and
Medium-Sized Companies and Groups (Accounts and Reports)
(Amendment) Regulations 2013 (Schedule 8 to the Regulations).
The Annual Statement and Annual Report on Remuneration
will be put to a single advisory shareholder vote at the AGM
on 16 May 2024.
This part of the report comprises five sections:
1. Remuneration for 2023
a. Single total figure of Directors’ remuneration
b. 2023 Annual and Deferred Bonus Plan outcome
Page 108
(audited)
c. LTIP update (audited)
2. Directors’ share ownership and share interests
a. LTIP and ADBP awards granted in 2023 (audited)
b. Outstanding LTIP and ADBP awards
c. Statement of Directors’ shareholdings and share
interests (audited)
3. Pay comparison
a. Percentage change in Directors’
remuneration versus employee pay
b. Total Shareholder Return
c. Chief Executive Officer historic remuneration
d. Relative importance of spend on pay
Page 111
Page 113
4. Remuneration Committee membership,
Page 115
governance and voting
a. Remuneration Committee membership
b. Independent advisers
c. Statement of voting at the General Meeting
5. Implementation of Remuneration Policy in 2024
Page 115
107
Ibstock Plc | Annual Report and Accounts 2023Additional informationFinancial StatementsGovernanceStrategic Report Directors’ Remuneration Report
Annual Report on Remuneration continued
1. Remuneration for 2023
Single total figure of Directors’ remuneration (audited)
The total remuneration of the individual Directors who served during the financial year is shown below.
Base Salary/Fee
Benefits 1
Pension
Total Fixed
Remuneration
Annual Bonus
LTIP 2,3
Total Variable
Remuneration
Total
Remuneration
Executive Directors
Joe Hudson (CEO)
Chris McLeish (CFO)
Non-Executive Directors
Jonathan Nicholls
Peju Adebajo
Nicola Bruce4
Louis Eperjesi
Tracey Graham5
Claire Hawkings
Justin Read
2023
2022
2023
2022
2023
2022
2023
2022
2023
2022
2023
2022
2023
2022
2023
2022
2023
2022
£514,330
£485,503
£346,048
£326,655
£197,426
£188,458
£56,409
£53,846
£50,848
–
£63,809
£53,846
£24,716
£74,704
£67,469
£64,404
£67,469
£64,404
£11,835
£19,978
£16,286
£16,179
£51,433
£97,101
£34,605
£32,666
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
£577,599
£602,582
£396,938
£375,500
£197,426
£188,458
£56,409
£53,846
£50,848
–
£63,809
£53,846
£24,716
£74,704
£67,469
£64,404
£67,469
£64,404
£191,294
£610,380
£128,705
£410,671
£126,749
£220,451
£85,280
£148,326
£895,641
£318,043
£830,831 £1,433,413
£213,985
£558,997
£610,924
£934,497
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
£197,426
£188,458
£56,409
£53,846
£50,848
–
£63,809
£53,846
£24,716
£74,704
£67,469
£64,404
£67,469
£64,404
1 Taxable benefits in the 2023 financial year comprised a company car allowance, private health cover and death in service cover. Joe Hudson and Chris McLeish were entitled to receive car allowances
of £18,000 and £15,000 per annum, respectively. The actual amounts received during the 2021/22 and 2022/23 tax years are shown as part of the total taxable benefits figure above.
2 The LTIP vesting for 2023 is estimated at 25.5% and is based on the three-month average share price to 31 December 2023 of 135 pence. No discretion was applied to determine the
vesting outcome and none of the 2021 LTIP value shown is attributed to share price growth over the vesting period.
3 The 2022 LTIP figures in last year’s report were estimated. These figures have been updated to reflect the TSR vesting outcome (33.1%) and the actual share price on the vesting date
(174.1 pence). Last year’s values had been based on the TSR measure not being achieved and the average three-month share price to 31 December 2022.
4 Nicola Bruce joined the Board on 29 March 2023.
5 Tracey Graham stepped down from the Board on 27 April 2023.
2023 Annual and Deferred Bonus Plan (ADBP) outcome (audited)
In 2023, the Executive Directors were eligible for an annual bonus, subject to meeting performance objectives, established at the
beginning of the financial year by reference to suitably challenging corporate goals over the 12-month period.
In 2023, the Annual and Deferred Bonus Plan targets and performance-related outcomes were as follows:
Metrics
FY Adj EBITDA*
FY Adj Operating Cash1
Non-Financial Objectives
Weighting
50%
20%
30%
Threshold (0%) Maximum (100%)
Actual Performance
% Outcome
£110.6m
£19.3m
0%
0%
A summary of the personal objectives and performance is outlined below
£ 107.4m
£13.1m
£124.8m
£21.7m
1 The definition of Adjusted Operating Cash for the ADBP is Adjusted free cash flow excluding interest, tax, property, plant and equipment, share based payments, R&D taxation credits, lease
liabilities and unbudgeted spend as agreed by the Committee to exclude.
108
Ibstock Plc | Annual Report and Accounts 2023 Non-Financial Objectives
Joe Hudson
Objective area
Assessment
Assessment of completed objective
Health, Safety, and Wellbeing
• Complete strategy and group roadmap for the H&S 5-year journey
• Drive environmental management systems with the ESG roadmap
Operational excellence
• Enhance performance at key manufacturing sites, complete
enhancement investment projects in clay and concrete
automation thesis.
Customer and digital
• Deliver the One brand project for Ibstock with customer portal
Strategic capital projects
• Oversee delivery of Atlas, Aldridge, and Arion projects
15/15
15/15
9/10
19/20
H&S performance exceeded the 5-year target of 50% reduction (actual
60%+ with alignment of expectations for leadership teams / training).
Full rollout of environmental and management system integration.
Enhancement projects complete as described in the Strategic Report.
One brand project delivered with further enhancements to
One Ibstock sales organisation. Portal pilot developed.
Project delivery in line with re-phased project plan to align to
market demand and dynamics.
Futures / M&A
• Delivery of Futures Year One business plan
• In year delivery of Futures strategic projects
• M&A according to defined criteria
20/20
Revenue more than doubled
All Futures projects on track
Culture and team
• Adjust organisation and operational footprint for current conditions
• Continue cultural change programme
• Replace COO with new MD Clay & Concrete
20/20
M&A frameworks and pipeline in place with two bolt-on
acquisitions completed
Dynamic management of capacity and stock
Removal of c£20m fixed cost
MD Clay & Concrete appointed and inducted
Substantial improvement in engagement scores
Overall the assessment on the CEO’s personal objectives was 98% (i.e. 29.4% out of 30%). As such, Joe Hudson’s total ADBP
outcome was 29.4%.
Assessment
Assessment of completed objective
14/15
H&S performance exceeded the 5-year target of 50% reduction
Chris McLeish
Objective area
Health, safety and wellbeing
• Reinforce ambition for zero harm with focus on Concrete Division
• Support the delivery of the 2023 wellbeing agenda
Finance functional agenda
• Enhance controls compliance levels at both factory and
15/15
Divisional/Group level
• Integrate enterprise risk management processes into the
core performance management cycles of the business
• Deliver in-year improvement in Finance operating model
Technology agenda
• Develop digital underpin to enable commercial strategy
for the next 5 years
• Ensure delivery of in-year digital evolution programme
Concrete Divisional objectives
• Deliver year-on-year improvement in operational performance
• Ensure delivery of concrete commercial plan for 2023
• Ensure Anstone pitching machine capex commissioned in line
with committed timeframe
Capital markets
• Effective communication with capital markets
• Explore other sources of capital to unlock enterprise value
Culture and team
• #FireUp agendas defined and delivered in full
• Development progress of all direct reports
14/15
15/15
15/15
15/15
High visibility and impact including attendance at quarterly
meetings, promoting the agenda (demonstrated by promotion
through “The Week” and creation of Mental Health Allies)
Delivered a 20% improvement in controls testing outcomes
versus 2022 baseline
Created and completed a financial reporting RACM for Clay,
Concrete, Group and Futures and included within the Risk
Management System
In-year improvements delivered to the Finance operating
model, in particular through Accounts Payable improvements
Customer order portal launch live in 2023
Scheduling improvements delivered
Establishment of long term commercial strategy with digital roadmap
Operational KPIs delivered in line with budgeted levels (safety,
quality, environmental, volumes, cost).
Delivery of Anstone capital investment project overall, on time
and within budget
Resilient performance combined with effective delivery of market
expectations throughout 2023
Held over 20 meetings with prospective shareholders and new
holders constituting at least 3% ownership by year end
High impact on engagement levels as evidenced by Employee
Engagement Survey results.
Material progression in talent pipeline into the senior leadership
team and executive committee
Overall the assessment on the CFO’s personal objectives was 98% (i.e. 29.4% out of 30%). As such, Chris McLeish’s total ADBP
outcome was 29.4%.
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Ibstock Plc | Annual Report and Accounts 2023Additional informationFinancial StatementsGovernanceStrategic Report Directors’ Remuneration Report
Annual Report on Remuneration continued
The Committee is conscious of the sensitivity involved with paying bonus when financial targets have not been achieved and
has considered this very carefully. In particular, the Committee considered the importance of the Executive Directors’ personal
performance objectives and noted their relevance to external stakeholders. Objectives relating to employee wellbeing, the customer
experience, the securing of future growth, and the operational and financial resilience of the company are crucial to the company’s
medium and long term performance. The delivery of these objectives are considered key to future financial success and ensure that
Ibstock is well positioned to take full opportunity of a market recovery. On balance, and after detailed consideration, the Committee
concluded that the formulaic annual bonus outcome of 29.4% based on the delivery of personal performance objectives reflects
the commitment and performance of our Executive Directors in extremely tough market conditions. The Committee therefore
determined that there is no basis for operating discretion (either upwards or downwards) in respect of this outcome.
The Committee also noted the following factors when in making its decision on 2023 bonuses:
• The Group’s cost and capacity management performance within the year;
• The delivery of performance in line with market expectations set at the beginning of the year; and
• The balance sheet remains robust, with leverage of 1.1 times at 31 December 2023 in the middle of the target range
and £100 million of liquidity headroom.
Joe Hudson
Chris McLeish
Maximum bonus opportunity
(% of salary)
Bonus payout
(% of maximum)
125%
125%
29.4%
29.4%
Bonus earned
(£000s)
£191
£129
Two-thirds of the bonus earned will be paid in cash and the remaining one-third will be deferred in shares under the ADBP for three years.
There are no performance conditions attached to the vesting of deferred shares and these awards vest subject to continued employment.
2021 LTIP update (audited)
The three-year performance period for the awards granted on 25 March 2021 ended on 31 December 2023 in respect of the EPS,
ROCE and ESG measures and will end on 24 March 2024 for the relative TSR measure. As the performance period for the TSR element
has not concluded, vesting is based on an estimate undertaken to 16 February 2024 which suggests that this measure will vest at 0%.
The Committee reviewed the performance against the four performance conditions and determined an overall estimated vesting level
of 25.5%.
Measure
Weighting (%)
Adjusted EPS*
ROCE (annual average)
Relative TSR (estimated vesting)
ESG Measure (Carbon Intensity)
Total
30%
20%
40%
10%
100%
Threshold
16.0p
15.77%
Median
0.152
–
Maximum
19.6p
17.43%
Upper Quartile
0.142
–
Actual
15.2p
19.45%
Below Median
0.148
–
Vesting
(% of total award)
0%
20%
0%
5.5%
25.5%
The Adjusted EPS* outcome for FY23 was 13.9 pence. Consistent with prior year, this included an adjustment of 1.3 pence relating to
the impact of the Atlas and Nostell major growth projects, and the changes in UK corporation tax, which were not anticipated at the
time that the LTIP was granted. These impacts have been added back to ensure the outcome and targets are on a like-for-like basis.
EPS performance was below threshold and consequently this measure will vest at 0%.
ROCE (annual average) for the three year performance from FY21 to FY23 outcome was 19.45%. This measure also included the
adjustment for Atlas and Nostell major growth projects to ensure the outcome and targets are on a like-for-like basis, and vested at 20%.
The ESG Measure of Carbon Intensity (tonnes of Carbon per tonnes of finished production) accounted for 10% of the award.
With adjustment for three uncorrected gas meter readings, equal to 0.03 tonnes of carbon per tonne of finished production,
the Carbon Intensity outcome was 0.151 tonnes of carbon per tonne of finished production (see page 21 for unadjusted data).
The Committee determined it was appropriate to adjust for the overstatement of reported gas usage disclosed, noting the
dependence on a 3rd party for timely resolution of gas meter disputes. This measure will vest at 5.5%.
The value of vested awards as set out in the single figure table is consequently based on an estimated vesting of 25.5% and includes
an estimation of dividend equivalents which form part of this award. It uses the average three-month share price to 31 December 2023
of 135p. The actual vesting value will be reported in next year’s Directors’ Remuneration Report.
110
Ibstock Plc | Annual Report and Accounts 2023 Confirmation of 2020 LTIP vesting
The LTIP award granted on 14 April 2020 was based on relative TSR, EPS and ROCE. The three-year performance period for the
award ended on 31 December 2022 in respect of the EPS measure and on 14 April 2023 for the relative TSR measure.
Measure
Adjusted EPS*
ROCE (annual average)
Relative TSR
Total
Weighting
33.3%
33.3%
33.3%
100%
Threshold
3%
18.76%
Median
–
Maximum
10%
20.77%
Upper Quartile
–
Actual
7.60%
15.20%
Median
–
Vesting
(% of total award)
24.8%
0.0%
8.3%
33.1%
In last year’s report, the estimated TSR vesting was nil based on a calculation conducted prior to signing off the Report. The actual final
calculation was performed after the end of the performance period and Ibstock ranked at median, resulting in 25% of this award vesting.
Payments to former Directors and loss of office payments (audited)
There were no payments to former Directors or payments for loss of office during the year.
On 28 September 2022, the Company announced that Tracey Graham was stepping down from the Board of Ibstock Plc with effect
from 27 April 2023. Prior to her departure, Tracey received the balance of the fees that were due to her up to the end of April 2023.
The money received related solely to services provided to the Board. Tracey did not receive any other remuneration payment or any
payment for loss of office.
2. Directors’ share ownership and share interests
LTIP and ADBP awards granted in 2023 (audited)
2023 LTIP Award Grant
On 3 April 2023, the following awards, structured as nil cost options, were made under the LTIP to Executive Directors:
Name
Joe Hudson
Chris McLeish
Date of grant
3 April 2023
3 April 2023
Basis of award
(% of salary)
Face value of the awards
at grant1
Number of shares
under award
125%
125%
£787,580
£529,893
452,632
304,536
Date of Vesting
3 April 2026
3 April 2026
1
Share price by reference to which the awards were granted is £1.74 (closing share price on 3 April 2023).
The LTIP awards will normally vest after 3 years based on the satisfaction of performance conditions. These are Adjusted Earnings
per Share (EPS) (25%), relative Total Shareholder Return (TSR) (30%), Adjusted ROCE (25%) and ESG (20%), each assessed over
a three-year performance period commencing on 1 January 2023.
Measure
Adjusted EPS*
ROCE*
Relative TSR
Carbon reduction (carbon produced per tonne of finished product)
Senior leader female representation
New product development sales revenue coming from new and sustainable products
Weighting
25%
25%
30%
10%
5%
5%
Threshold
17.0p
17.4%
Median
0.131
32%
18%
Maximum
24.4p
19.23%
Upper Quartile
0.123
40%
22%
2022 ADBP grant
Under the terms of the Policy, part of the bonus earned for 2022 performance was delivered in the form of deferred bonus shares
under the ADBP. Details of the awards granted are set out in the table below.
Name
Joe Hudson
Chris McLeish
Date of grant
16 March 2023
16 March 2023
Basis of award
(% of 2022 bonus)
Face value of the awards
at grant1
Number of shares
under award
33.3%
33.3%
£203,691
£137,046
116,395
78,312
Date of vesting
16 March 2026
16 March 2026
1
The number of Ordinary Shares granted under each ADBP award was calculated in accordance with the rules of the ADBP using an Ordinary Share price of £1.75 per share (the closing
middle market quotation on 15 March 2023).
The ADBP awards will vest on 16 March 2026, subject to continued employment.
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Annual Report on Remuneration continued
Outstanding LTIP and ADBP awards
Details of all options held by the Directors under the Company’s share plans as at 31 December 2023:
Joe Hudson
Award
Grant date
Interest at 31
December 2022
Awards granted
in year
Awards vested
in year
Awards lapsed
in year
Awards exercised
in year
Interest at 31
December 2023
Market price
on award date
Exercise/
Option Price
Expiry date
02/01/2018
2018 LTIP
03/05/2019
2019 ADBP
14/04/2020
2020 ADBP
14/04/2020
2020 LTIP
25/03/2021
2021 LTIP
14/04/2022
2022 ADBP
14/04/2022
2022 LTIP
16/03/2023
2023 ADBP
2023 LTIP
03/04/2023
Sharesave 2021 14/04/2021
Chris McLeish
Award Type
Grant date
12/08/2019
2019 LTIP
12/08/2019
2019 LTIP
14/04/2020
2020 ADBP
14/04/2020
2020 LTIP
25/03/2021
2021 LTIP
14/04/2022
2022 ADBP
14/04/2022
2022 LTIP
16/03/2023
2023 ADBP
03/04/2023
2023 LTIP
Sharesave 2021 14/04/2021
21,570
32,576
21,571
357,167
317,888
91,325
578,122
10,227
1,5361
8,4181
23,107
126,623
238,962
21,570
32,576
23,107
116,395
452,632
£2.67
£2.04
£2.85
£1.91
£2.15
£1.98
£1.72
£1.75
£1.73
N/A
Nil Cost 02/01/2028
Nil Cost 03/05/2029
Nil Cost 14/04/2030
Nil Cost 14/04/2030
Nil Cost 25/03/2031
Nil Cost 14/04/2032
Nil Cost 14/04/2032
Nil Cost 16/03/2033
Nil Cost 03/04/2033
N/A
£1.76
126,623
317,888
91,325
578,122
116,395
452,632
10,227
Interest at 31
December 2022
Awards granted
in year
Awards
vested in year
Awards lapsed
in year
Awards exercised
in year
Interest at 31
December 2023
Market price
on award date
Exercise/
Option Price
Expiry date
64,790
41,794
5,829
240,314
213,886
61,447
388,967
10,227
4151
5,6641
6,244
85,196
0
160,782
64,790
41,794
6,244
85,196
78,312
304,536
£2.32
£2.32
£2.85
£1.91
£2.15
£1.98
£1.72
£1.75
£1.73
N/A
Nil Cost 12/08/2029
Nil Cost 12/08/2029
Nil Cost 14/04/2030
Nil Cost 14/04/2030
Nil Cost 25/03/2031
Nil Cost 14/04/2032
Nil Cost 14/04/2032
Nil Cost 16/03/2033
Nil Cost 03/04/2033
N/A
£1.76
213,886
61,447
388,967
10,227
1 In line with prior years, upon awards vesting the participant receives dividend equivalents in share options. These are shown in the table above as awards granted in the year for the 2020
ADBP and 2020 LTIP.
Statement of Directors’ shareholdings and share interests (audited)
The share interests of each Director as at 31 December 2023 (together with interests held by connected persons) and, where
applicable, achievement of shareholding requirements are set out below.
To align executives with the interests of shareholders, the Remuneration Committee has implemented shareholding guidelines for
Executive Directors. The guidelines require that Executive Directors build up and maintain an interest in the Ordinary Shares of the
Company that is 200% of their annual base salary. The CEO and CFO, having joined the Company in 2018 and 2019 respectively,
are expected to build up their shareholding over a five-year period. The Committee recognises that neither Joe Hudson nor Chris
McLeish have yet met their shareholding requirements, with Joe’s five-year deadline ending January 2023 and Chris’ deadline to
end August 2024. The Committee considered this, noting that both LTIP and ADBP payouts have been below the expectations of the
Committee when they joined and that neither Director has sold any of their shareholding during the year. As such, the Committee were
comfortable that the Executive Directors will continue to build up their shareholding requirements and no further action is required.
Shareholding
requirement
% salary
Current
shareholding
% salary1
Beneficially
owned
Unvested interests
subject to
performance
conditions2
Unvested interests
not subject to
performance
conditions2
Vested but
unexercised
interests2
Outstanding
Sharesave
awards
Shareholding
requirement met
200%
200%
N/A
N/A
N/A
N/A
N/A
N/A
N/A
72% 61,409
104% 155,261
10,000
10,000
5,939
20,000
10,000
10,000
17,500
–
–
–
–
–
–
–
1,348,642
907,389
–
–
–
–
–
–
–
207,720
139,759
–
–
–
–
–
–
–
126,623
0
–
–
–
–
–
–
–
10,227
10,227
–
–
–
–
–
–
–
No
No
–
–
–
–
–
–
–
Joe Hudson
Chris McLeish
Jonathan Nicholls
Peju Adebajo
Nicola Bruce
Louis Eperjesi
Claire Hawkings
Tracey Graham3
Justin Read
1 Current shareholdings includes all shares owned directly, owned by a beneficiary or held through nominees.
2 Unvested interests and vested interests are show post-tax in this table.
3 Tracey Graham stepped down from the Board on 27 April 2023. Her shareholding at the date she left the Board is shown in this table.
112
Ibstock Plc | Annual Report and Accounts 2023
3. Pay Comparison
Percentage change in Directors’ remuneration versus employee pay
The table below shows the percentage change in salary, benefits and annual bonus earned between the 2023 financial year and the
prior year for the Board compared to the average earnings of all of the Group’s other colleagues. The change in remuneration is also
shown for the previous two years.
The Committee monitors the changes year-on-year between our Director pay and the average employee increase.
2023
2022
2021
2020
Joe Hudson
Chris McLeish
Jonathan Nicholls
Peju Adebajo1
Nicola Bruce2
Louis Eperjesi3
Claire Hawkings4
Justin Read
All employees5
Salary/Fees
Benefits
5.9% (40.8)%
0.7%
5.9%
–
4.8%
–
4.8%
–
–
–
18.5%
–
4.8%
4.8%
–
2.3%6 (16.7)%
Annual
Bonus
Benefits Annual Bonus
Salary/
Fees
(68.7)% 6.8% 27.8%
(68.7)% 6.8% 2.3%
–
–
–
–
–
–
12.4%
12.4%
–
–
–
–
–
–
(78.2)% 10.3% (14.3)% (31.8)%
– 3.0%
– 100%
–
–
– 3.0%
– 8.4%
– 2.7%
Salary/Fees
Benefits
Annual Bonus Salary/Fees Benefits
Annual
Bonus
5.3%
5.3%
5.3%
–
–
6.5%
19.7%
5.3%
3.9%
(5.4)%
2.0%
–
–
–
–
–
–
3.8%
100% (3.1)% (5.5)% (100)%
–
–
100%
–
(3.1)%
–
–
–
–
–
–
–
–
(3.3)%
–
–
(3.1)%
–
–
(3.1)%
–
100% (8.7)% 0% (100)%
–
–
–
–
–
–
–
Louis Eperjesi was appointed as SID in 2023 and so received an additional fee to reflect this additional responsibility.
Peju Adebajo was appointed to the Board in November 2021 and received a pro-rated amount of her annual fee in 2021, hence the large % increase in 2022.
1
2 Nicola Bruce was appointed to the Board in March 2023.
3
4 Claire Hawkings was appointed Chair of the ESG Committee in 2021 and so received an additional fee to reflect this additional responsibility.
5
6
Ibstock Plc as the Parent Company has no employees, therefore employees of the Group employed as full time equivalent for the three years have been used.
The 2022 All Employee salary includes a one-off £1,000 or £2,000 cost of living payment to all employees earning less than £30,000 or £50,000 respectively.
Without this, the salary increase from 2022 to 2023 would be 6.3%
CEO pay ratio
In line with the reporting regulations, set out below is the ratio of CEO pay compared to the pay of UK full-time equivalent employee
of the Group for the financial year ended 31 December 2023. In line with previous years, we have calculated the ratios set out above
using Option A, as described in the Directors’ Remuneration Reporting Regulations, as we believe that this reflects the most
comprehensive approach.
We expect the pay ratio to vary from year to year, driven largely by variability in incentive outcomes for the CEO, which will
significantly outweigh any other general employee pay changes at Ibstock.
The CEO single total figure remuneration of £896k is used in the table below.
Year
2019
2020
2021
2022
2023
Method
Option A
Option A
Option A
Option A
Option A
25th Percentile
50th Percentile
75th Percentile
43:1
21:1
41:1
44:1
31:1
35:1
16:1
30:1
35:1
25:1
23:1
13:1
25:1
27:1
19:1
The ratios above were determined as at 31 December 2023. The Remuneration Committee is satisfied that the pay ratio is reasonable
and consistent with the Company’s wider policies on colleague pay, reward and progression.
Set out in the table below is the base salary and total pay and benefits for the CEO and each of the percentiles for the year ended
31 December 2023.
Total remuneration
Base salary
CEO
25th Percentile
50th Percentile
75th Percentile
895,641
514,330
29,195
24,423
36,811
32,827
49,693
44,584
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Ibstock Plc | Annual Report and Accounts 2023Additional informationFinancial StatementsGovernanceStrategic Report Directors’ Remuneration Report
Annual Report on Remuneration continued
Total Shareholder Return (TSR)
The chart below shows £100 invested in the Company’s shares since listing compared with the FTSE 250 index and the FTSE 250
Construction and Materials index.
250
200
150
100
50
0
21 Oct 15
31 Dec 16
31 Dec 17
31 Dec 18
31 Dec 19
31 Dec 20
31 Dec 21
31 Dec 22
31 Dec 23
Ibstock
FTSE 250
FTSE 250 Construction and Materials
Source: Thomson Reuters Datastream data as of 8 January 2024
The Committee considers that the FTSE 250 is an appropriate index because the Company has been a member of this index since
listing. It should be noted that the Company listed on 27 October 2015 and therefore only has a listed share price for the period of
27 October 2015 to 31 December 2023. Additionally, the FTSE 250 Construction and Building materials index is shown as it reflects
the sector in which the Company operates.
Chief Executive Officer historic remuneration
The table below sets out the single total figure of remuneration and incentive outcomes for the Director holding the post of CEO
in each year since Ibstock listed on the London Stock Exchange in 2015.
Year
2015
2016
2017
2018
2019
2020
2021
2022
2023
CEO
Wayne Sheppard1
Wayne Sheppard
Wayne Sheppard
Wayne Sheppard2
Joe Hudson3
Joe Hudson
Joe Hudson
Joe Hudson
Joe Hudson
Joe Hudson
Single figure
remuneration
% maximum annual
bonus earned
% maximum LTIP
award vesting
773
789
906
184
592
737
540
1,104
1,353
896
100%
33%
58%
32.5%
32.5%
33.1%
0%
95.5%
98.5%
29.4%
N/A
N/A
N/A
38.5%
N/A
N/A
0%
0%
33.1%
25.5%
1
2
3
Following the IPO in 2015, no award under the LTIP vested in the period 2016 to 2018.
Wayne Sheppard stepped down as CEO and Board Director on 4 April 2018 and his 2018 remuneration has been pro-rated to reflect this.
Joe Hudson became CEO on 4 April 2018. His 2018 single figure only includes compensation paid to him in 2018 in his capacity as the CEO from 4 April to 31 December 2018 and does not
include compensation paid to him as CEO designate before 4 April 2018.
Relative importance of spend on pay
The following table shows the Company’s actual spend on pay for all Group colleagues relative to dividends:
Staff costs 1
Dividends paid
2023
(£m)
117
34.9
2022
(£m)
125.4
33.7
% Change
(7)%
4%
1 This is the overall spend on employee pay including Executive Directors (continuing operations). For more information, please see Notes 7 and 31 of the Financial Statements.
In addition, the Company completed a share buyback during 2022 totalling £30 million.
114
Ibstock Plc | Annual Report and Accounts 2023 4. Remuneration Committee membership, governance and voting
Remuneration Committee membership
The Remuneration Committee in 2023 comprised Nicola Bruce, who was appointed as Chair of the Committee on 27 April 2023,
following the planned step down of Tracey Graham.
The Committee members were Jonathan Nicholls, Peju Adebajo, Louis Eperjesi, Claire Hawkings and Justin Read. The Committee met
six times during the year and all Committee members were present.
The Committee also receives assistance from Joanne Hodge, the Group People Director, who attends meetings by invitation, except
when issues relating to her own remuneration are being discussed.
The ESG Committee (comprising of Claire Hawkings, Peju Adebajo, Louis Eperjesi and Joe Hudson) advise the Committee on the
setting and outcome of ESG performance measures in the LTIP awards. The CEO is absent from any part of the ESG Committee
meeting pertaining to decisions on ESG targets or outcomes. The CEO and CFO attend by invitation on occasions but are absent
from discussions regarding setting of their own pay arrangements.
The independent adviser to the Committee attends by invitation.
Independent advisers
The Remuneration Committee takes account of information from both internal and independent sources, including FIT Remuneration
Consultants LLP (FIT) who act as the Remuneration Committee’s independent adviser. FIT was appointed by the Remuneration
Committee in September 2022 as a result of a tender process and advised the Remuneration Committee on all aspects of Senior
Executive and Board remuneration, including remuneration trends and corporate governance best practice.
FIT is a founder member of the Remuneration Consultants’ Group and complies with its Code of Conduct, which sets out guidelines
to ensure that its advice is independent and free of undue influence. The Remuneration Committee reviews the performance and
independence of its advisers on an annual basis. The Remuneration Committee was satisfied that FIT’s advice was independent
and objective and has no other connection with the Company or individual directors.
Ibstock incurred fees of £45,000 excluding VAT during 2023 relating to Remuneration Committee advice. FIT billed on a fixed fee
basis and in addition provided other ad hoc services to management including share plan advice and TSR performance calculations
which were billed on a time spent basis.
Statement of voting at the General Meeting
The Company is committed to ongoing shareholder dialogue and takes an active interest in voting outcomes. Where there are substantial
votes against resolutions in relation to Directors’ remuneration, the Company seeks to understand the reasons for any such vote and
will report any actions in response to it. The following table sets out actual voting at the AGM on 27 April 2023 in respect of the Directors’
remuneration report for the year ended 31 December 2022 and at the AGM on 21 April 2022 in respect of the current Directors’
Remuneration Policy.
AGM Resolution
Number of shares
% votes cast
Number of shares
% votes cast
Votes for
Votes against
Total votes cast
(excluding withheld)
Annual Report on Remuneration (2023)
Directors’ Remuneration Policy (2022)
189,619,722
317,532,159
97%
99%
5,546,821
1,851,842
3% 195,166,543
1% 319,384,001
Votes withheld
13,528
58,111
5. Implementation of Remuneration Policy in 2024
Base salaries
In the context of strong individual performances in their respective roles and a wider workforce increase of 3%, salaries for the
Executive Directors will increase by 3% from 1 April 2024 as follows:
Joe Hudson
Chris McLeish
2024
£536,143
£360,724
2023
£520,527
£350,217
Benefits and pension
Pension contribution remains aligned to the wider workforce at 10% of gross base salary.
Benefits are provided in line with the approved Remuneration Policy. Standard benefits will be provided, including a company car
and/or a cash alternative. Both Directors also receive private health cover and death in service cover.
Annual and Deferred Bonus Plan (ADBP)
For 2024, the maximum bonus opportunity will be 125% of salary for Joe Hudson and Chris McLeish and one-third of any bonus
earned will be deferred in shares which will vest after three years.
The performance conditions and their weightings for the 2024 annual bonus are as follows:
• Adjusted EBIT* based on full-year performance (50%).
• Adjusted operating cash flow bonus measure (20%).
• Non-financial objectives: defined operational/strategic objectives (30%).
115
Ibstock Plc | Annual Report and Accounts 2023Additional informationFinancial StatementsGovernanceStrategic Report Directors’ Remuneration Report
Annual Report on Remuneration continued
The Committee has set appropriately stretching financial targets and in doing so has considered the internal plan (budget), current
market consensus and the prevailing macroeconomic environment. Maximum payments under these measures will require significant
outperformance of internal and external expectations.
The Committee is of the opinion that, given the commercial sensitivity arising in relation to the detailed financial targets used for the
annual bonus, disclosing precise targets for the ADBP in advance would not be in shareholders’ interests. Actual targets, performance
achieved and awards made will be published at the end of the relevant performance period so shareholders can fully assess the basis
for any payouts under the annual bonus.
Long Term Incentive Plan (LTIP)
The Committee has considered the prevailing share price and believes no adjustment is required to the policy grant level. Accordingly,
the 2024 LTIP award will be 150% of salary for Joe Hudson and Chris McLeish.
The performance conditions for these awards will be Adjusted Earnings per Share (EPS)* (30%), relative Total Shareholder Return
(TSR) (20%), ROCE* (30%) and ESG (20%), each assessed over a three-year performance period commencing on 1 January 2024.
• TSR – Performance will be measured against the constituents of the FTSE 250 excluding investment trusts and financial services
companies – with threshold vesting for median performance and full vesting for upper quartile ranking or higher.
• Adjusted EPS* – The Adjusted EPS target is measured based on performance in FY26, with threshold vesting requiring EPS of
11.4p in FY26 and full vesting for 16.5p or higher. Setting appropriate three-year earnings targets in the current macroeconomic
and political environment has been challenging, particularly in a cyclical business such as ours. The Committee has set a range
which is challenging based on the current outlook which assumes a recovery to normal market conditions by the end of the three
year performance period. Strong performance from the management team alongside a market recovery will be required for any
vesting to occur. The maximum target of 16.5p represents considerable out-performance of the internal plan and assumes a level
of recovery consistent with performance prior to the market downturn in 2022.
• ROCE* – Performance will be taken to be the average of each of the three years of the performance period (2024 – 2026) with
threshold performance at 8.68% and maximum performance requiring 12.50% or higher. These targets have been set against
what are expected to be very challenging market conditions, particularly during the initial part of the measurement period.
Maximum vesting requires considerable out-performance of the business plan, alongside the delivery of earnings growth in
a manner that promotes and maintains capital efficiency.
• ESG – Consistent with the previous two years, 20% of the LTIP is directly related to the three sustainability pillars set out in the
2030 ESG strategy.
– Carbon reduction (10%): The carbon reduction performance measure will be based on FY26 with a threshold vesting (25%)
requiring a carbon per brick of 383g and full vesting for 347g or lower. Following the recommendation from the ESG Committee,
the Carbon Reduction target has been adapted to Scope 1 grams of CO2 per brick rather than tonnes of CO2 per tonne of finished
production. This is a more appropriate and accurate measure with which to incentivise carbon reduction, accounting for c97%
of our Scope 1 Absolute Carbon and removing the possible impact on carbon calculations caused by changes to Divisional
production mix.
– Earn and learn (5%): The Improving Lives performance condition is based on the % of employees in Earn and Learn positions,
as defined by the 5% Club. The Committee has set a threshold vesting of 8% of employees to be in Earn and Learn positions in
FY26, and 12% or higher for full vesting. Building on the success to date of increasing female representation in senior management,
the Committee considers that this new measure will support Ibstock’s continued commitment to diversity, encouraging the business
to broaden its apprenticeship programmes as well as supporting the recruitment and development of individuals from more
diverse backgrounds.
– New product development (5%): The manufacturing materials for life performance condition has threshold set at 20% of
FY26 sales revenue to derive from new and sustainable products, and 24% for full vesting. The Committee believe this remains
an important performance condition to drive product innovation within Ibstock.
A two-year holding period will apply to the 2024 LTIP awards following vesting.
Non Executive Directors’ fees
The 2024 fee levels will increase by 3% (2023: 5%) in line with those for Executive Directors (with effect from 1 April 2024):
Board Fees
Chair
Board fee (including Committee membership)
Committee Chair (per Committee)
Senior Independent Director
2024
£205,800
£58,810
£11,530
£11,250
2023
£199,805
£57,089
£11,193
£10,920
I hope that you find this report to be clear about our remuneration practices and that you will be supportive at the coming AGM.
Nicola Bruce
Chair of the Remuneration Committee
5 March 2024
116
Ibstock Plc | Annual Report and Accounts 2023
Directors’ Report
The Directors’ Report
for the year ended
31 December 2023
comprises pages 117 to
119 together with the
sections of the Annual
Report incorporated by
reference. The Corporate
Governance Statement
on pages 72 to 98 is
incorporated into the
Directors’ Report by
reference. As permitted
by legislation, some of
the matters required
to be included in the
Directors’ Report have
instead been included
in the Strategic Report
on pages 2 to 71.
The Strategic Report
includes an indication of
future likely developments
in the Company, details
of important events and
the Company’s business
model and strategy.
The Strategic Report and the Directors’
Report together form the Management
Report for the purposes of the Disclosure
Guidance and Transparency Rules (DTR)
4.1.8R.
Principal activity
The principal activity of the Group is
the manufacture and supply of clay and
concrete building products and solutions
primarily to customers in the UK residential
construction sector. Details of the Group’s
principal subsidiaries can be found in
Note 29 to the financial statements.
Results and dividend
The results for the year can be found in
the Financial Review on pages 33 to 37
and these are incorporated by reference
into this report.
Going Concern and Viability Statement
Information relating to the Going Concern
and Viability Statement is set out on pages
70 to 71 of the Strategic Report and is
incorporated by reference into this report.
Research and development
Information relating to research and
development is set out in the Our Strategy
section on page 16 of the Strategic Report
and is incorporated by reference into
this report.
Greenhouse gas emissions
Information relating to the greenhouse
gas emissions of the Company is set out
on page 54 of the Strategic Report and is
incorporated by reference into this report.
Board of Directors and their interests
The names and biographies of the
Directors as at the date of this report are
shown on pages 74 to 75. The interests
of the Directors holding office at the end
of the year in the issued Ordinary Share
capital of the Company and any interests
in Ibstock’s share incentive plans are given
in the Directors’ Remuneration Report on
page 112.
Powers of the Directors
The powers given to the Directors are
contained in the Company’s Articles of
Association and are subject to relevant
legislation and, in certain circumstances,
including in relation to the issuing or
buying back by the Company of its
shares, subject to authority being
given to the Directors by shareholders
in general meeting. The Articles of
Association also govern the appointment
and replacement of Directors.
Re-election of Directors
All Directors will retire and submit
themselves for election or re-election,
annually, by shareholders at the
AGM. Specific reasons why each
Director’s contribution is, and
continues to be, important to the
Company’s long-term sustainable
success are set out in the Notice.
Amendment of the Articles of Association
The Articles of Association may be
amended in accordance with the
provisions of the Companies Act 2006
by way of a special resolution of the
Company’s shareholders.
Share capital and control
Details of the Company’s share capital
are contained in Note 23 to the Group
consolidated financial statements.
The rights attaching to the shares are
set out in the Articles of Association.
The Company has established a trust
in connection with the Group’s Share
Incentive Plan (the SIP), which holds
Ordinary Shares on trust for the benefit of
employees of the Group. The Trustees of
the SIP trust may vote in respect of Ibstock
shares held in the SIP trust, but only as
instructed by participants in the SIP in
accordance with the SIP trust deed and
rules. The Trustees will not otherwise vote
in respect of shares held in the SIP trust.
The Trustee of the Employee Benefit Trust
(the Trust), which is used to purchase
shares on behalf of the Company as
described in Note 24, has the power to
vote or not vote, at its absolute discretion,
in respect of any shares in the Company
held unallocated in the Trust. However, in
accordance with good practice, the Trustee
adopts a policy of not voting in respect of
such shares. In accordance with Listing
Rule 9.8.4(c), the Company notes that the
Trustee has a dividend waiver in place in
respect of shares which are the beneficial
property of the Trust.
Purchase of own shares
At the AGM held on 27 April 2023,
shareholders passed a special resolution in
accordance with the Companies Act 2006
to authorise the Company to purchase in
the market a maximum of 40,963,159
Ordinary Shares, representing 10% of the
Company’s issued Ordinary Share capital
as at the latest practicable date prior to
publication of the AGM circular.
117
Ibstock Plc | Annual Report and Accounts 2023Additional informationFinancial StatementsGovernanceStrategic Report Directors’ Report continued
As announced on 10 May 2022, the
Company entered into a Share Buyback
Programme of an aggregated value of
£30 million in order to return value to
shareholders, in line with the Group’s
capital allocation policy. The Buyback
Programme concluded on 21 October
2022, with a total of 16,791,470 shares
purchased, representing a nominal value
of £167,914.70 equivalent to 4.1% of the
issued capital of the Company. All 16,791,470
shares purchased are held in treasury,
exclusive of voting and dividend rights.
The Directors are seeking renewal
of the authority at the forthcoming
AGM, in accordance with relevant
institutional guidelines.
Post balance sheet events
On 6 March 2024, a final dividend of
3.6 pence per Ibstock Plc Ordinary Share
was proposed to be paid on 31 May 2024
to shareholders of record as at 10 May
2024. There were no further post balance
sheet events. See Note 31 on page 177.
Reappointment of auditor
It will be proposed that Deloitte LLP be
reappointed as the Company’s auditor
at the Annual General Meeting to be
held on 16 May 2024.
Substantial shareholdings
As at 31 December 2023, the Company
had been notified, in accordance with the
Disclosure Guidance and Transparency
Rules, of the following interests in its
Ordinary Share capital.
In the period from 31 December 2023
to the date of this report, there have been
two notifications that have been made to
the Company pursuant to DTR 5. Information
provided to the Company under the Disclosure
Guidance and Transparency Rules is publicly
available via the regulatory information
service and on the Company’s website.
Significant agreements
(change of control)
The Company is required to disclose any
significant agreements that take effect,
alter or terminate on a change of control
of the Company following a takeover bid.
The Company has committed debt facilities
all of which are directly or indirectly subject
to change of control provisions, albeit the
facilities do not necessarily require mandatory
prepayment on a change of control.
During 2021 the Company completed
the refinancing of its £215 million
Revolving Credit Facility (RCF), diversifying
its credit sources at attractive rates,
whilst simultaneously achieving a
significant extension of the Group’s
debt maturity profile.
The existing facility was replaced with
the issuance of £100 million of private
placement notes from Pricoa Private
Capital, with maturities of between 7
and 12 years at an average total cost of
funds of 2.19%, and a £125 million RCF
provided by a syndicate of five banks.
The RCF is for an initial four-year tenure,
with a one-year extension option, at a
margin of between 1.60% and 2.60%,
and also includes an additional £50 million
uncommitted accordion.
The RCF extension option was exercised
in 2022 at the same margin range and
underlying terms.
In the event of a takeover or other change
of control (usually excluding an internal
reorganisation), outstanding awards under
the Group’s incentive plans vest and
become exercisable (including Annual
& Deferred Bonus Plan (ADBP) awards,
SMSP share awards and Long Term
Incentive Plan (LTIP) awards), to the
extent any performance conditions (if
applicable) have been met, and subject
to time pro-rating (if applicable) unless
determined otherwise by the Board in
Name of shareholder
Vulcan Value Partners, LLC
Lansdowne Partners
Aviva PLC
J O Hambro Capital Management Limited
Ameriprise Financial, Inc.
Janus Henderson Group PLC
Franklin Templeton Management
Odey Asset Management LLP
Norges Bank
Shares disclosed
40,331,355
39,263,142
24,459,943
20,367,209
20,408,608
17,763,918
17,674,986
12,085,210
12,218,525
%
10.26
9.99
6.22
4.98
4.96
4.52
4.32
2.99
2.98
Nature
Indirect
Indirect
Indirect and Direct
Indirect
Indirect and Direct
Indirect
Indirect
Direct
Direct
its discretion, in accordance with the rules
of the plans. In certain circumstances, the
Board may decide (with the agreement
of the acquiring company) that awards
will instead be cancelled in exchange
for equivalent awards over shares in
the acquiring company.
Directors’ and Officers’ liability
insurance and indemnities
The Company has purchased and maintains
appropriate insurance cover in respect of
Directors’ and Officers’ liabilities. The Company
has also entered into qualifying third party
indemnity arrangements for the benefit
of all its Directors, in a form and scope
which comply with the requirements of the
Companies Act 2006. These indemnities
came into force on 22 October 2015 and
remain in force as at the date of this
Annual Report.
Financial instruments
Details of the financial instruments used
by the Group are set out in Note 22 to the
Group consolidated financial statements,
which are incorporated into this Directors’
Report by reference. The Group’s financial
risk management objectives and policies
are included in the risk management section
on page 22 and in Note 22 of the Group
consolidated financial statements.
Political donations
No political donations were made during
the year ended 31 December 2023
(2022: £nil).
Annual General Meeting 2024
The AGM will be held on 16 May 2024
at 12:00 p.m. at the I-Studio in Hatton
Garden, London. The Notice convening
the meeting together with explanatory
notes on the resolutions to be proposed
and full details of the deadlines for
appointing proxies is contained in a
circular which will be circulated to all
shareholders at least 20 working days
before such meeting together with
this report.
Employees
The average number of employees
within the Group is shown in Note 7
to the Group financial statements.
The Group is an equal opportunities
employer and considers applications
for employment from disabled persons
(having regard to their particular aptitudes
and abilities) and encourages and assists,
wherever practicable, the recruitment,
training, career development and promotion
118
Ibstock Plc | Annual Report and Accounts 2023 of disabled people and the retention of and
appropriate training for those who become
disabled during their employment.
Employee engagement
Due to our commitment to transparent and
best practice reporting, we have included
our section on employee engagement on
page 40 of the Strategic Report as the
Board considers these disclosures to be
of strategic importance and is therefore
incorporated into the Directors’ Report
by cross-reference.
The Stakeholder engagement section on
page 38 demonstrates how the Directors
have engaged with employees and how
they have had regard to employee interests
and the effect of that regard including the
principal decisions by the Company during
the financial year.
The Company is also keen to encourage
greater employee involvement in the Group’s
performance through share ownership.
To help align employees’ interests with the
success of the Company’s performance, we
operate an HMRC approved all-employee
plan, the Ibstock Plc Sharesave Scheme
(Sharesave), which is offered to UK
employees. To further increase employee
ownership, in 2022 each employee of the
Company below ELT and SLT level received
an award of 500 shares under the Senior
Manager Share Plan, as the Fire Up Ibstock
Share Grant, further details of which can
be found in Note 25.
Business relationships
The Stakeholder engagement section
on pages 38 to 41 and Section 172(1)
Statement demonstrate how the Directors
have had regard to its engagement with
suppliers, customers and others and how
the effect of that regard had influenced
the principal decisions taken by the
Company during the financial year.
The Board considers this disclosure to
be of strategic importance. That section
is incorporated into the Directors’ Report
by cross-reference.
Directors’ responsibilities
The Directors are responsible for preparing
the Annual Report in accordance with
applicable law and regulations.
Company law requires the Directors
to prepare financial statements for
each financial year. Under that law
the Directors are required to prepare the
Group consolidated financial statements
in accordance with United Kingdom
adopted international accounting standards
and International Financial Reporting
Standards (IFRSs) as issued by the
International Accounting Standards Board
(IASB) and have elected to prepare the
Parent Company financial statements in
accordance with United Kingdom Generally
Accepted Accounting Practice (United
Kingdom Accounting Standards), including
FRS 102, the Financial Reporting Standard
applicable in the United Kingdom and the
Republic of Ireland, and applicable law.
Under company law the Directors must
not approve the Annual Report unless
they are satisfied that they give a true
and fair view of the state of affairs of
the Group and Company and of the
profit or loss of the Group for that year.
In preparing the Parent Company financial
statements, the Directors are required to:
• select suitable accounting policies
and then apply them consistently;
• make judgements and accounting
estimates that are reasonable and prudent;
• state whether applicable United
Kingdom Accounting Standards have
been followed, subject to any material
departures disclosed and explained
in the financial statements; and
• prepare the financial statements on
the going concern basis unless it is
inappropriate to presume that the
Company will continue in business.
In preparing the Group consolidated
financial statements, International
Accounting Standard No.1 requires
Directors to:
• properly select and apply
accounting policies;
• present information, including
accounting policies, in a manner that
provides relevant, reliable, comparable
and understandable information;
• provide additional disclosures when
compliance with the specific
requirements in IFRS is insufficient to
enable users to understand the impact
of particular transactions, other events
and conditions on the entity’s financial
position and financial performance; and
• make an assessment of the Group’s
ability to continue as a going concern
and prepare the financial statements
on the going concern basis unless it is
inappropriate to presume that the
Group will continue in business.
The Directors are responsible for keeping
adequate accounting records that are
sufficient to show and explain the Group’s
and Company’s transactions and to
disclose with reasonable accuracy at any
time the financial position of the Group
and Company and to enable them to
ensure that the financial statements
comply with the Companies Act 2006
and Article 4 of the IAS Regulation. They
are also responsible for safeguarding the
assets of the Company and hence for
taking reasonable steps for the prevention
and detection of fraud and other irregularities.
Website publication
The Directors are responsible for ensuring
the Annual Report, including the Financial
Statements, is made available on a website.
Financial statements are published on the
Company’s website in accordance with
legislation in the United Kingdom governing
the preparation and dissemination of
financial statements, which may vary
from legislation in other jurisdictions.
The maintenance and integrity of the
Company’s website (www.ibstock.co.uk)
is the responsibility of the Directors.
The Directors’ responsibility also extends
to the ongoing integrity of the Financial
Statements contained therein.
Disclosure of information to auditors
Each person who is a Director of the
Company as at the date of approval
of this Report confirms that:
(a) so far as the Director is aware, there is
no relevant audit information of which the
Company’s auditors are not aware; and
(b) the Director has taken all the steps that
he or she ought to have taken as a Director
in order to make him/herself aware of any
relevant audit information and to establish
that the Company’s auditors are aware of
that information.
The Directors’ Report (pages 117 to 119)
has been approved and is signed by order
of the Board by:
Becky Parker
Group Company Secretary
5 March 2024
Registered Office: Leicester Road, Ibstock,
Leicestershire, LE67 6HS
Company registration number 09760850
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Ibstock Plc | Annual Report and Accounts 2023Additional informationFinancial StatementsGovernanceStrategic Report Directors’ Responsibility
Statement
The Directors in office as at 31 December 2023 and whose names and functions are given on pages 74 and 75 confirm that to the
best of their knowledge:
• the Financial Statements, prepared in accordance with the relevant financial reporting framework, give a true and fair view of the
assets, liabilities, financial position and profit or loss of the Group and Company and the undertakings included in the consolidation
taken as a whole; and
• the Strategic Report and Directors’ Report include a fair review of the development and performance of the business and the position
of the Group and Company and the undertakings included in the consolidation taken as a whole, together with a description of the
principal risks and uncertainties that they face.
The Directors consider that this Annual Report, taken as a whole, is fair, balanced and understandable, and provides the information
necessary for shareholders to assess the Group’s position and performance, business and strategy.
The Directors’ Report (pages 117 to 119) has been approved and is signed by order of the Board by:
Becky Parker
Group Company Secretary
5 March 2024
Registered Office: Leicester Road, Ibstock, Leicestershire, LE67 6HS
Company registration number 09760850
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Ibstock Plc | Annual Report and Accounts 2023 Independent Auditor’s Report
to the members of Ibstock plc
Report on the audit of
the financial statements
1. Opinion
In our opinion:
• the financial statements of Ibstock plc (the ‘company’)
and its subsidiaries (the ‘group’) give a true and fair view
of the state of the group’s and of the parent company’s
affairs as at 31 December 2023 and of the group’s profit
for the year then ended;
• the group financial statements have been properly
prepared in accordance with United Kingdom adopted
international accounting standards;
• the company financial statements have been properly
prepared in accordance with United Kingdom Generally
Accepted Accounting Practice, including Financial Reporting
Standard 102 “The Financial Reporting Standard applicable
in the UK and Republic of Ireland”; and
• the financial statements have been prepared in accordance
with the requirements of the Companies Act 2006.
We have audited the financial statements which comprise:
• the consolidated income statement;
• the consolidated statement of comprehensive income;
• the consolidated balance sheet;
• the consolidated statement of changes in equity;
• the consolidated cash flow statement;
• the related notes 1 to 32 to the consolidated
financial statements;
• the company balance sheet;
• the company statement of changes in equity; and
• the related notes 1 to 12 to the company financial statements.
3. Summary of our audit approach
Key audit matters
The key audit matters that we
identified in the current year were:
• Impairment testing of
non-current assets;
• Revenue recognition –
customer rebates; and
• Classification of exceptional items.
The financial reporting framework that has been applied in the
preparation of the group financial statements is applicable law,
and United Kingdom adopted international accounting standards.
The financial reporting framework that has been applied in the
preparation of the company financial statements is applicable
law and United Kingdom Accounting Standards, including
FRS 102 “The Financial Reporting Standard applicable in
the UK and Republic of Ireland” (United Kingdom Generally
Accepted Accounting Practice).
2. Basis for opinion
We conducted our audit in accordance with International
Standards on Auditing (UK) (ISAs (UK)) and applicable law.
Our responsibilities under those standards are further described
in the auditor’s responsibilities for the audit of the financial
statements section of our report.
We are independent of the group and the company in accordance
with the ethical requirements that are relevant to our audit of the
financial statements in the UK, including the Financial Reporting
Council’s (the ‘FRC’s’) Ethical Standard as applied to listed public
interest entities, and we have fulfilled our other ethical responsibilities
in accordance with these requirements. The non-audit services
provided to the group and company for the year are disclosed in
note 6 to the financial statements. We confirm that we have not
provided any non-audit services prohibited by the FRC’s Ethical
Standard to the group or the company.
We believe that the audit evidence we have obtained is sufficient
and appropriate to provide a basis for our opinion.
Within this report, key audit matters are identified as follows:
Newly identified
Increased level of risk
Similar level of risk
Decreased level of risk
Materiality
The materiality that we used for the group financial statements was £2.9 million which was
determined on the basis of approximately 5% of profit before tax adjusted for restructuring expenses
(being the £30.8m exceptional charges incurred in the period as described in Note 5).
Scoping
The group is organised into two main divisions (Clay and Concrete), which are split into nine
trading components.
We have performed full scope audit procedures on four of the components, and have performed specified
audit procedures on certain account balances for two components. We have performed other procedures on
the remaining three components of the group, including performing analytical reviews, making inquiries and
evaluating and testing management’s group-wide controls.
All work has been performed by the group audit engagement team.
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Independent Auditor’s Report to the members of Ibstock plc
continued
Significant
changes in our
approach
During the year there was a decline in the forward forecast of market conditions which has led to
site closures, resulting in redundancies and impairments, significantly impacting profit before tax.
As well as there being specific indicators of impairment on those sites that were closed, management
identified other general indicators of impairment, and therefore performed full impairment testing
on their CGUs. Due to the judgement applied in this impairment testing, we have identified a new
Key Audit Matter for the period relating to impairment of non-current assets.
Based on the work we have performed, we have not identified
any material uncertainties relating to events or conditions that,
individually or collectively, may cast significant doubt on the
group’s and company’s ability to continue as a going concern
for a period of at least twelve months from when the financial
statements are authorised for issue.
In relation to the reporting on how the group has applied the
UK Corporate Governance Code, we have nothing material to
add or draw attention to in relation to the directors’ statement in
the financial statements about whether the directors considered
it appropriate to adopt the going concern basis of accounting.
Our responsibilities and the responsibilities of the directors with
respect to going concern are described in the relevant sections
of this report.
5. Key audit matters
Key audit matters are those matters that, in our professional
judgement, were of most significance in our audit of the
financial statements of the current period and include the
most significant assessed risks of material misstatement
(whether or not due to fraud) that we identified. These
matters included those which had the greatest effect on:
the overall audit strategy, the allocation of resources in the
audit; and directing the efforts of the engagement team.
These matters were addressed in the context of our audit
of the financial statements as a whole, and in forming our
opinion thereon, and we do not provide a separate opinion
on these matters.
4. Conclusions relating to going concern
In auditing the financial statements, we have concluded that
the directors’ use of the going concern basis of accounting
in the preparation of the financial statements is appropriate.
Our evaluation of the directors’ assessment of the group’s and
company’s ability to continue to adopt the going concern basis
of accounting included:
• assessing the reasonableness of assumptions applied by
directors in preparing their forecasts, including the impact
of the restructuring activities implemented during 2023
and the impact of the current macroeconomic environment;
• assessing the historical accuracy of forecasts prepared by directors;
• considering the impact of climate change risks and
commitments on the expected cash flows in the outlook period;
• obtaining confirmation for the financing facilities, repayment
terms and covenants to test that these facilities remain
available and evaluating the additional external funding
facilities accessible to the group;
• testing the clerical accuracy and appropriateness of the model
used to prepare the forecasts;
• challenging management’s ‘severe but plausible’-case analysis
and whether it is appropriate, and performed sensitivity analysis
on key variables, including the appropriateness of management’s
identified potential mitigating actions and the inclusion of
these in the going concern assessment;
• reading analyst reports, industry data and other external
information to determine if it provided corroborative or
contradictory evidence in relation to assumptions used;
• reperforming management’s sensitivity analysis;
• consideration of the site closures that have taken place
during the year, and the impact that this could have
on the group’s forecasting;
• ensured consistency between impairment forecasting
and going concern modelling;
• obtaining and performing analysis on post year end results
and benchmarking this against management’s forecasts; and
• assessing the adequacy of the disclosures made within the
financial statements.
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Ibstock Plc | Annual Report and Accounts 2023 5.1. Impairment of Non-Current Assets
Key audit matter
description
As at 31 December 2023 the Group had Non-current assets (excluding post-employment benefit assets)
of £562.2m (FY22: £530.9m).
How the scope of our
audit responded to the
key audit matter
Following the restructuring decisions made by management during the year (as detailed within note 5)
and the macroeconomic conditions including the inflationary environment, management identified
indicators of impairment. Therefore, as required by IAS 36 Impairment of assets, a full impairment
review was performed at a Cash Generating Unit (‘CGU’) level. An impairment charge of £20.6m
was recorded in the period.
Value in use has been calculated using cash flows reflecting management’s best estimate of the future
trading performance of the Group. Further details of the cash flows are set out in Note 16
(‘Impairment’) of the financial statements.
In making their assessment of value in use management has considered reasonably possible changes
in the industry demand for the Group’s products.
The key audit matter relates specifically to the Group’s Cash Generating Units (i.e. those that were not
subject to permanent closure in the period). Management’s impairment review is sensitive to changes
in the key assumption as set out in Note 16. Judgement is required to forecast site level cash flows
which are derived from the Board approved budget and strategic plan covering the years 2024 – 2028,
which is underpinned by assumptions on industry demand for the Group’s products.
Please refer to the Strategic Report, Note 1 (‘Summary of significant accounting policies), Note 13
(‘Property, plant and equipment’) and Note 16 (‘Impairment’) which provide further detail on the
impairments made, and the assumptions applied to the value in use model.
To address this key audit matter, we have performed the following procedures:
• Gained an understanding of the relevant controls surrounding the value in use model, including
the calculations, assumptions, and the mechanical accuracy;
• Challenged management’s Cash Generating Unit (CGU) determination by understanding the
products manufactured by each site, and how the components of the group generate cashflows;
• Challenged the consistency of management’s methodology with the requirements of IAS 36
by engaging our impairment modelling specialists to review the mechanics of the model and
to focus on areas such as inclusion of working capital and the impact of IFRS 16;
• Performed a search for contradictory evidence including market analyst reports and housing market
demand forecasts to challenge the key assumptions used;
• Reviewed historic CGU trading performance and the correlation with management’s 5 year outlooks;
• Validated market size assumptions to external forecasts;
• Working with our Environmental, Social and Governance (‘ESG’) specialists, we challenged
management on their consideration of the climate related risks and opportunities (as disclosed in the
TCFD report at page 56) in the value in use model and challenged management on their
consideration of risks and opportunities identified in the TCFD reporting within in the value
in use model;
• Working with our internal valuations specialists we developed an independent build up of the
Weighted Average Cost of Capital (WACC) to be included in the model for the purpose of discounting
future cash flows;
• Assessed the disclosures included within Notes 1, 13 and 16 for consistency with the requirements
of IAS 36.
Key observations
Based on our audit procedures we are satisfied that the assumptions in the impairment models are
within an acceptable range and that the estimate of the Group’s impairment charge is reasonable.
We also consider the disclosures, including the sensitivity disclosure in Note 16, to be appropriate.
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continued
5.2. Revenue Recognition – Customer Rebates
Key audit matter
description
The group has recognised revenue for the year ended 31 December 2023 of £405.6 million (2022
of £512.9 million), this year the group has recognised a rebate expense of £17.2m (2022: 24.2m).
How the scope of our
audit responded to the
key audit matter
The group enters into various agreements whereby it offers customers retrospective rebates. The rebate
agreements are often complex in nature, with different types of rebates being offered to each customer,
with the nature of those rebates differing across different product ranges. Due to the level of complexity
involved, we have determined that there is a potential risk of fraud through possible manipulation of
this balance.
The key audit matter is focussed on the completeness and accuracy of the reduction against revenue
in respect of rebates in Ibstock Brick and Supreme Concrete components.
Further information on customer rebates can be found in the group’s summary of significant accounting
policies in note 1 on page 142.
We have performed the following procedures to address this key audit matter:
• Obtained an understanding of the relevant controls over the revenue recognition process;
• Performed a year-on-year analysis of revenue and rebates to understand any material changes
in the rebate provision at a customer level;
• For a sample of customer rebate agreements, inspected the terms and dates, and recalculated
selected rebates in accordance with the contract terms, including evaluating the sales data on
which the rebate calculations are based;
• Identified the largest customers in each of Brick and Supreme components and requested written
confirmation from a sample of the largest customers to confirm that the rebate provided by the
Group is the full rebate due to the customer as at 31 December 2023;
• Assessed the completeness of rebates by evaluating credit notes raised during 2023 and post
year-end, assessing whether payments had been made to customers where we had been informed
that no rebate agreement was in place and made enquiries of management as to the existence
of any other rebate arrangements; and
• Agreed a sample of rebates to settlement post year-end.
Key observations
From the procedures outlined above we are satisfied that management have appropriately recognised
reductions in revenue related to customer rebates for the year ended 31 December 2023. We made
recommendations to management around improvements to controls in this area.
5.3. Classification of Exceptional Items
Key audit matter
description
The group has identified £30.8m (FY22: £6.3m) of exceptional items in the consolidated income
statement (page 131). Management use exceptional items to adjust results to eliminate factors
which they consider to distort year-on-year comparisons.
The presentation of certain income and costs as exceptional is not defined by IFRS and therefore
significant judgement is required in determining the appropriate classification in line with guidance
from the FRC (Financial Reporting Council) and ESMA (European Securities and Markets Authority).
The presentation and consistency of costs and income presented within adjusting items is a key
determinant in assessing the quality of the group’s underlying earnings. The adjusting items presented
separately include items which by virtue of their size and/or nature, do not reflect the group’s ongoing
trading performance.
We have identified there to be a possible risk of fraud and a key audit matter as a possible risk
of inappropriate manipulation of items, which are not exceptional, are labelled as such in the
financial statements.
Further information on exceptional items can be found in the Audit Committee Report on page 95, the
Group’s summary of significant accounting policies in note 1, note 2 (‘Critical Accounting Judgements
and Key Sources of Estimation Uncertainty’), note 3 (‘Alternative Performance Measures’) and note 5
(‘Exceptional Items’).
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Ibstock Plc | Annual Report and Accounts 2023 How the scope of our
audit responded to the
key audit matter
We have performed the following procedures to address this key audit matter:
• Obtained an understanding of the relevant management review controls over the classification
of items as exceptional;
• Challenged the classification and consistency of items management proposed to include as
exceptional against FRC and ESMA guidance, including an assessment of the completeness
of items classified as exceptional;
• Agreed a sample of these items to supporting documentation to assess the appropriateness
and accuracy of these items;
• Assessed the adequacy of the disclosures to explain the nature of the exceptional items; and,
• For all significant adjustments recorded in calculating underlying profits, discussed the
appropriateness of these items and disclosure considerations with the Audit Committee.
Key observations
We are satisfied that the items classified as exceptional are appropriate for the year ended
31 December 2023.
6. Our application of materiality
6.1 Materiality
We define materiality as the magnitude of misstatement in the financial statements that makes it probable that the economic
decisions of a reasonably knowledgeable person would be changed or influenced. We use materiality both in planning the scope
of our audit work and in evaluating the results of our work.
Based on our professional judgement, we determined materiality for the financial statements as a whole as follows:
Group financial statements
Materiality
£2.9m (2022: £4.8m)
Parent company financial statements
£2.0m (2022: £3.4m)
Basis for
determining
materiality
Rationale for the
benchmark applied
Our determined materiality represents approximately
5.0% of profit before tax adjusted for restructuring
expenses, being the £30.8m exceptional charges
incurred in the period as described in Note 5
(2022: 4.6% of profit before tax).
Profit before tax is considered to be the most relevant
benchmark to the users of the financial statements.
In 2023, we consider it appropriate to adjust for
restructuring expenses as these are not reflective
of the underlying performance of the Group.
3.0% of net assets capped at 70% of group
materiality consistent with the prior period.
Net assets are considered to be an appropriate
benchmark for the Company given its main
function is that of a holding Company.
PBT adjusted
for restructuring
expenditure £60.8m
PBT adjusted for
restructuring expenditure
Group materiality
Group materiality £2.9m
Component materiality
range £0.8m to £2.0m
Audit Committee
reporting threshold
£0.1m
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Independent Auditor’s Report to the members of Ibstock plc
continued
6.2 Performance materiality
We set performance materiality at a level lower than materiality to reduce the probability that, in aggregate, uncorrected and
undetected misstatements exceed the materiality for the financial statements as a whole.
Performance
materiality
Basis and rationale
for determining
performance
materiality
Group financial statements
Parent company financial statements
70% (2022: 70%) of group materiality
70% (2022: 70%) of company materiality
In determining performance materiality, we considered the following factors:
• Our cumulative experience from prior year audits;
• Our risk assessment, including our assessment of the quality of the group’s control environment;
• The nature, volume and size of misstatements (corrected and uncorrected) in prior periods, and
• The level of change in the business from the prior year.
6.3. Error reporting threshold
We agreed with the Audit Committee that we would report
to the Committee all audit differences in excess of £0.1m
(2022: £0.2m), as well as differences below that threshold
that, in our view, warranted reporting on qualitative grounds.
We also report to the Audit Committee on disclosure matters
that we identified when assessing the overall presentation
of the financial statements.
7. An overview of the scope of our audit
7.1. Identification and scoping of components
We have identified the group components to be the legal
entities that make up the group. We have performed our
scoping exercise by assessing the risk of material misstatement
for the group presented by each of the components and have
also considered how the quality of the control environment
varies across the components.
We have identified three levels of audit scope for the components
which are based on the significance of the component to our
group audit opinion.
Scope A
Full audits were performed on the following components,
which the group engagement team identified as being
financially significant, which has been determined to be
consistent with the prior period:
• Ibstock Brick Limited
• Forticrete Limited
• Supreme Concrete Limited
• Anderton Concrete Products Limited
All work was carried out by the group engagement team
at an appropriate component materiality level.
Scope B
We have changed our scope this year to identify two non-financially
significant components (Ibstock Brick Holding Company and
Ibstock plc) to be in scope for audit procedures on specific
account balances and classes of transactions. In the prior
period these components were subject to analytical reviews
for our group audit opinion.
All work was carried out by the group engagement team at an
appropriate component materiality level.
Scope C
For the remaining components in the group, we have performed
analytical review procedures to a determined threshold.
5 %
0%
0%
2%
Revenue
Profit before tax
Net assets
95%
100%
100%
98%
95%
Full audit scope and specified procedures
Review at group level
Full audit scope and specified procedures
Review at group level
Full audit scope and specified procedures
Review at group level
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Ibstock Plc | Annual Report and Accounts 2023
7.2. Our consideration of the control environment
The group uses JD Edwards as the main accounting software
in all Scope A and Scope B components; they also use Resource
Link for payroll management and Hubble for financial reporting.
Using our IT specialists, we have assessed the IT control
environment and gained an understanding of the general
IT controls operating in the three identified systems.
We did not plan to test the controls or take a controls reliance
strategy over any of business processes or account balances
due to findings identified in the prior period not being fully
remediated for the entirety of the current year. We also
reviewed the work of Internal Audit who identified additional
control deficiencies.
Throughout our audit we have considered the control deficiencies
that were identified in the prior period, and ensured that we
tailored timing, nature and extent of our procedures to address
the findings identified.
We have gained an understanding of the controls around the
items identified as significant risks of material misstatement,
and all material accounting estimates. From this work, we have
identified some further deficiencies in the design of controls,
for which entity management is subsequently taking action
to remediate, and have communicated all findings and
deficiencies on internal controls to the Audit Committee.
Please refer to page 96 which details their response to the
deficiencies identified for both our audit and internal audit.
7.3. Our consideration of climate-related risks
During the year the group has taken a number of steps to develop
their understanding of the impact climate change could have on
their business as detailed on page 92 of the ESG committee report,
this has included holding quarterly ESG Committee meetings ,
performing a vulnerability assessment on their sites (as disclosed
in the TCFD reporting on page 56, and updating the risk
assessment and ESG strategy which was developed in 2022.
In the Principal Risks and Uncertainties report on page
22 management have identified the most significant impacts
that they think climate change will have on the group’s operations.
In the TCFD report on (pages 62 to 63), management have
identified climate related risks and opportunities for the group.
We have used the risks and opportunities identified in management’s
TCFD reporting, and our own knowledge of the business, and
have received assistance from our ESG specialists, to perform
an account balance and financial statement level climate change
risk assessment, and identified risks of material misstatement in
relation to:
• the useful economic lives of some items of property, plant and
equipment, particularly Ibstock Brick component’s gas-fuelled
kilns and sites identified as having exposure to physical risks,
• impairment of non-current assets, and whether management
have appropriately considered the impacts that climate change
could have on future cash flows of the cash generating units
of the business specifically in the terminal value assumptions
applied to management’s value in use model,
• the valuation of the restoration provision, and
• the impact that changes in consumer behaviour may have
on demand for Ibstock’s products, and how this could impact
valuation of inventory and going concern status of the group.
In response to the risks identified, we performed the
following procedures:
• we have inquired with those charged with governance (TCWG),
management, and others;
• we have reviewed internal and external communications
surrounding climate change such as sustainability
reports, group’s risk assessments, press releases
and climate-related disclosures;
• we have gained an understanding of how climate may affect
the group’s business and operating environment and its
financial reporting, including, but not limited to:
– group-specific climate initiatives and commitments;
– internal and external risk factors affected by climate-related
matters including key performance indicators, regulatory
environment, governance structure; and
– management’s assessment of the implications of
climate-related matters on the financial statements
and control environment.
• we have assessed the impact of climate related commitments
made in the latest sustainability report and the impact on
accounting for restoration provisions;
• we have evaluated the directors’ going concern and viability
assessment as to whether this appropriately considered climate
related risks and the impact on cash flows;
• we also challenged the directors as to the impact on the
useful economic lives of certain classes of assets in relation to
sustainability commitments being made in the public domain;
• together with our internal ESG specialists we have read the
climate related disclosures included within other information
of the annual report and assessed the consistency with the
financial statements, the disclosure requirements and
knowledge obtained during the audit. Specifically, we have
reviewed disclosures in the financial statements in notes 13,
16 and 19 to clarify how climate related risks have been
considered in reaching accounting conclusions; and
Gained an understanding of the relevant controls operating
in the business in relation to identification of climate rated
risks, and the group’s response to those risks.
127
Ibstock Plc | Annual Report and Accounts 2023Additional informationFinancial StatementsGovernanceStrategic Report Independent Auditor’s Report to the members of Ibstock plc
continued
8. Other information
The other information comprises the information included
in the annual report, other than the financial statements
and our auditor’s report thereon. The directors are responsible
for the other information contained within the annual report.
Our opinion on the financial statements does not cover the
other information and, except to the extent otherwise explicitly
stated in our report, we do not express any form of assurance
conclusion thereon.
Our responsibility is to read the other information and, in doing
so, consider whether the other information is materially inconsistent
with the financial statements or our knowledge obtained in the
course of the audit, or otherwise appears to be materially misstated.
If we identify such material inconsistencies or apparent material
misstatements, we are required to determine whether this gives
rise to a material misstatement in the financial statements
themselves. If, based on the work we have performed, we
conclude that there is a material misstatement of this other
information, we are required to report that fact.
We have nothing to report in this regard.
9. Responsibilities of directors
As explained more fully in the directors’ responsibilities statement,
the directors are responsible for the preparation of the financial
statements and for being satisfied that they give a true and fair
view, and for such internal control as the directors determine is
necessary to enable the preparation of financial statements that
are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, the directors are responsible
for assessing the group’s and the company’s ability to continue
as a going concern, disclosing as applicable, matters related to
going concern and using the going concern basis of accounting
unless the directors either intend to liquidate the group or the
company or to cease operations, or have no realistic alternative
but to do so.
10. Auditor’s responsibilities for the audit of the
financial statements
Our objectives are to obtain reasonable assurance about
whether the financial statements as a whole are free from
material misstatement, whether due to fraud or error,
and to issue an auditor’s report that includes our opinion.
Reasonable assurance is a high level of assurance, but is not
a guarantee that an audit conducted in accordance with ISAs
(UK) will always detect a material misstatement when it exists.
Misstatements can arise from fraud or error and are considered
material if, individually or in the aggregate, they could reasonably
be expected to influence the economic decisions of users taken
on the basis of these financial statements.
A further description of our responsibilities for the audit of
the financial statements is located on the FRC’s website at:
www.frc.org.uk/auditorsresponsibilities. This description forms
part of our auditor’s report.
11. Extent to which the audit was considered capable
of detecting irregularities, including fraud
Irregularities, including fraud, are instances of non-compliance
with laws and regulations. We design procedures in line with our
responsibilities, outlined above, to detect material misstatements
in respect of irregularities, including fraud. The extent to which
our procedures are capable of detecting irregularities, including
fraud is detailed below.
11.1. Identifying and assessing potential risks related to irregularities
In identifying and assessing risks of material misstatement in
respect of irregularities, including fraud and non-compliance
with laws and regulations, we considered the following:
• the nature of the industry and sector, control environment
and business performance including the design of the group’s
remuneration policies, key drivers for directors’ remuneration,
bonus levels and performance targets;
• the group’s own assessment of the risks that irregularities
may occur either as a result of fraud or error that was
approved by the board on 2 November 2023;
• results of our enquiries of management, internal audit,
the directors and the audit committee about their own
identification and assessment of the risks of irregularities,
including those that are specific to the group’s sector;
• any matters we identified having obtained and reviewed
the group’s documentation of their policies and procedures
relating to:
– identifying, evaluating and complying with laws and
regulations and whether they were aware of any instances
of non-compliance;
– detecting and responding to the risks of fraud and
whether they have knowledge of any actual, suspected
or alleged fraud;
– the internal controls established to mitigate risks of fraud
or non-compliance with laws and regulations, including the
fraud risk register which is maintained by management;
• the matters discussed among the audit engagement team
and relevant internal specialists, including tax, data analytics,
pensions, IT and ESG specialists regarding how and where
fraud might occur in the financial statements and any
potential indicators of fraud.
As a result of these procedures, we considered the opportunities
and incentives that may exist within the organisation for fraud and
identified the greatest potential for fraud in the following areas:
• Revenue Recognition – Customer Rebates
• Presentation of Exceptional Items
In common with all audits under ISAs (UK), we are also
required to perform specific procedures to respond to the
risk of management override.
We also obtained an understanding of the legal and regulatory
framework that the group operates in, focusing on provisions
of those laws and regulations that had a direct effect on the
determination of material amounts and disclosures in the
financial statements. The key laws and regulations we
considered in this context included the UK Companies Act,
Listing Rules, pensions legislation and tax legislation.
128
Ibstock Plc | Annual Report and Accounts 2023 In addition, we considered provisions of other laws and
regulations that do not have a direct effect on the financial
statements but compliance with which may be fundamental
to the group’s ability to operate or to avoid a material penalty.
These included employment law, occupational health and safety
regulations, the Environment Act, the Water Framework Directive,
the Waste Directive, the Environmental Protection Act and the
Energy Efficiency Directive.
11.2. Audit response to risks identified
As a result of performing the above, we identified revenue
recognition – customer rebates and presentation of exceptional
items as key audit matters related to the potential risk of fraud.
The key audit matters section of our report explains the matters
in more detail and also describes the specific procedures we
performed in response to those key audit matters.
In addition to the above, our procedures to respond to risks
identified included the following:
• reviewing the financial statement disclosures and testing
to supporting documentation to assess compliance with
provisions of relevant laws and regulations described
as having a direct effect on the financial statements;
• enquiring of management, the audit committee and in-house
and external legal counsel concerning actual and potential
litigation and claims;
• performing analytical procedures to identify any unusual
or unexpected relationships that may indicate risks
of material misstatement due to fraud;
• reading minutes of meetings of those charged with
governance, reviewing internal audit reports and reviewing
correspondence with HMRC; and
• in addressing the risk of fraud through management override
of controls, testing the appropriateness of journal entries
and other adjustments; assessing whether the judgements
made in making accounting estimates are indicative of
a potential bias; and evaluating the business rationale of
any significant transactions that are unusual or outside
the normal course of business.
• assessing the appropriateness and robustness of
management’s response to the non-material instance
of fraud identified in the period, as described in the
Audit Committed Report (page 98) and tailoring our
audit approach accordingly.
Report on other legal and
regulatory requirements
12. Opinions on other matters prescribed
by the Companies Act 2006
In our opinion the part of the directors’ remuneration report
to be audited has been properly prepared in accordance with
the Companies Act 2006.
In our opinion, based on the work undertaken in the course
of the audit:
• the information given in the strategic report and the directors’
report for the financial year for which the financial statements
are prepared is consistent with the financial statements; and
• the strategic report and the directors’ report have been
prepared in accordance with applicable legal requirements.
In the light of the knowledge and understanding of the group
and the company and their environment obtained in the
course of the audit, we have not identified any material
misstatements in the strategic report or the directors’ report.
13. Corporate Governance Statement
The Listing Rules require us to review the directors’ statement
in relation to going concern, longer-term viability and that part
of the Corporate Governance Statement relating to the group’s
compliance with the provisions of the UK Corporate Governance
Code specified for our review.
Based on the work undertaken as part of our audit, we have
concluded that each of the following elements of the Corporate
Governance Statement is materially consistent with the financial
statements and our knowledge obtained during the audit:
• the directors’ statement with regards to the appropriateness
of adopting the going concern basis of accounting and any
material uncertainties identified set out on page 70;
• the directors’ explanation as to its assessment of the
group’s prospects, the period this assessment covers
and why the period is appropriate set out on page 70;
• the directors’ statement on fair, balanced and
understandable set out on page 77;
• the board’s confirmation that it has carried out a robust
assessment of the emerging and principal risks set out
on page 22;
We also communicated relevant identified laws and regulations
and potential fraud risks to all engagement team members including
internal specialists, and remained alert to any indications of fraud
or non-compliance with laws and regulations throughout the audit.
• the section of the annual report that describes the review
of effectiveness of risk management and internal control
systems set out on page 96; and
• the section describing the work of the audit committee
set out on page 94.
129
Ibstock Plc | Annual Report and Accounts 2023Additional informationFinancial StatementsGovernanceStrategic Report Independent Auditor’s Report to the members of Ibstock plc
continued
16. Use of our report
This report is made solely to the company’s members, as a body,
in accordance with Chapter 3 of Part 16 of the Companies Act
2006. Our audit work has been undertaken so that we might
state to the company’s members those matters we are required
to state to them in an auditor’s report and for no other purpose.
To the fullest extent permitted by law, we do not accept or
assume responsibility to anyone other than the company
and the company’s members as a body, for our audit work,
for this report, or for the opinions we have formed.
As required by the Financial Conduct Authority (FCA) Disclosure
Guidance and Transparency Rule (DTR) 4.1.15R – DTR 4.1.18R,
these financial statements will form part of the Electronic Format
Annual Financial Report filed on the National Storage Mechanism
of the FCA in accordance with DTR 4.1.15R – DTR 4.1.18R.
This auditor’s report provides no assurance over whether the
Electronic Format Annual Financial Report has been prepared
in compliance with DTR 4.1.15R – DTR 4.1.18R.
Lee Highton, FCA (Senior statutory auditor)
For and on behalf of Deloitte LLP
Statutory Auditor
Birmingham, United Kingdom
5 March 2024
14. Matters on which we are required to report by exception
14.1. Adequacy of explanations received and accounting records
Under the Companies Act 2006 we are required to report to you
if, in our opinion:
• we have not received all the information and explanations
we require for our audit; or
• adequate accounting records have not been kept by the
company, or returns adequate for our audit have not been
received from branches not visited by us; or
• the company financial statements are not in agreement
with the accounting records and returns.
We have nothing to report in respect of these matters.
14.2. Directors’ remuneration
Under the Companies Act 2006 we are also required to report
if in our opinion certain disclosures of directors’ remuneration
have not been made or the part of the directors’ remuneration
report to be audited is not in agreement with the accounting
records and returns.
We have nothing to report in respect of these matters.
15. Other matters which we are required to address
15.1. Auditor tenure
Following the recommendation of the audit committee, we were
appointed by the Board of Directors on 24 May 2017 to audit the
financial statements for the year ending 31 December 2017 and
subsequent financial periods. The period of total uninterrupted
engagement including previous renewals and reappointments of
the firm is 7 years, covering the years ending 31 December 2017
to 31 December 2023.
15.2. Consistency of the audit report with the additional report
to the audit committee
Our audit opinion is consistent with the additional report to
the audit committee we are required to provide in accordance
with ISAs (UK).
130
Ibstock Plc | Annual Report and Accounts 2023 Consolidated income statement
Revenue
Cost of sales
Gross profit
Distribution costs
Administrative expenses
Profit on disposal of property, plant and equipment
Other income
Other expenses
Operating profit
Finance costs
Finance income
Net finance cost
Profit before taxation
Taxation
Profit for the financial year
Profit attributable to:
Owners of the Company
Non-controlling interest
Earnings per share
Basic
Diluted
Non-GAAP measure
Reconciliation of adjusted EBITDA1 to operating profit for the financial year for continuing operations
Operating profit
Add back/(less) exceptional cost/(credit) impacting operating profit
Add back depreciation and amortisation
Adjusted EBITDA1
All amounts relate to continuing operations.
Notes
4
6
6
8
9
10
Year ended
31 December
2023
£’000
405,839
(290,883)
114,956
(36,797)
(47,623)
1,957
3,312
(774)
35,031
(5,932)
968
(4,964)
30,067
(9,007)
21,060
Year ended
31 December
2022
£’000
512,886
(316,521)
196,365
(47,961)
(49,624)
6,541
2,630
(524)
107,427
(4,553)
1,890
(2,663)
104,764
(17,884)
86,880
21,060
–
86,908
(28)
Notes
pence per share
pence per share
11
11
5.4
5.3
21.6
21.5
Year ended
31 December
2023
£’000
35,031
30,762
41,564
107,357
Year ended
31 December
2022
£’000
107,427
(6,278)
38,518
139,667
Notes
5
6
The notes on pages 136 to 177 form an integral part of these consolidated financial statements.
1 Alternative performance measures are described in Note 3 and exceptional items are described in Note 5 to the consolidated financial statements.
131
Ibstock Plc | Annual Report and Accounts 2023Additional informationGovernanceStrategic ReportFinancial Statements Consolidated statement of comprehensive income
Profit for the financial year
Other comprehensive (expense)/income:
Items that may be reclassified subsequently to profit or loss
Change in fair value of cash flow hedges2
Related tax movements2
Items that will not be reclassified subsequently to profit or loss
Remeasurement of post-employment benefit assets and obligations2
Related tax movements2
Other comprehensive expense for the year, net of tax
Total comprehensive income for the year, net of tax
Total comprehensive income/(expense) attributable to:
Owners of the Company
Non-controlling interest
Year ended
31 December
2023
£’000
21,060
Year ended
31 December
2022
£’000
86,880
Notes
22
10
20
10
(591)
148
(443)
641
(149)
492
(5,283)
1,320
(3,963)
(44,581)
11,147
(33,434)
(4,406)
16,654
(32,942)
53,938
16,654
–
53,966
(28)
The notes on pages 136 to 177 form an integral part of these consolidated financial statements.
1 Alternative performance measures are described in Note 3 and exceptional items are described in Note 5 to the consolidated financial statements.
2 Impacting retained earnings.
132
Ibstock Plc | Annual Report and Accounts 2023 Consolidated balance sheet
Assets
Non-current assets
Intangible assets
Property, plant and equipment
Right-of-use assets
Derivative financial instruments
Post-employment benefit asset
Current assets
Inventories
Current tax recoverable
Trade and other receivables
Derivative financial instruments
Cash and cash equivalents
Total assets
Current liabilities
Trade and other payables
Derivative financial instrument
Borrowings
Lease liabilities
Provisions
Net current assets
Total assets less current liabilities
Non-current liabilities
Borrowings
Lease liabilities
Deferred tax liabilities
Provisions
Total liabilities
Net assets
Equity
Share capital
Share premium
Retained earnings
Other reserves
Equity attributable to owners of the Company
Non-controlling interest
Total Equity
At
31 December
2023
£’000
At
31 December
2022
£’000
Notes
12
13
26
22
20
14
15
22
17
22
18
26
19
18
26
21
19
23
24
24
82,017
440,400
39,831
–
9,832
572,080
119,189
1,171
37,919
–
23,872
182,151
754,231
(80,526)
(24)
(25,496)
(9,292)
(6,002)
(121,340)
60,811
632,891
(98,992)
(34,541)
(89,929)
(9,562)
(233,024)
(354,364)
90,242
409,091
31,478
116
15,194
546,121
94,275
1,717
65,935
451
54,283
216,661
762,782
(120,003)
–
(436)
(7,690)
(1,613)
(129,742)
86,919
633,040
(99,769)
(25,414)
(84,349)
(7,299)
(216,831)
(346,573)
399,867
416,209
4,096
4,458
790,971
(399,658)
399,867
–
399,867
4,096
4,458
807,894
(400,290)
416,158
51
416,209
The notes on pages 136 to 177 form an integral part of these consolidated financial statements.
These financial statements were approved by the Board and authorised for issue on 5 March 2024. They were signed on its behalf by:
J Hudson
Director
C McLeish
Director
133
Ibstock Plc | Annual Report and Accounts 2023Additional informationGovernanceStrategic ReportFinancial Statements
Consolidated statement of changes in equity
Balance at 1 January 2023
Profit for the year
Other comprehensive expense
Total comprehensive income/
(expense) for the year
Transactions with owners:
Share based payments
Deferred tax on share based payment
Equity dividends paid
Issue of own shares held on exercise
of share options
Acquisition of non-
controlling interests
At 31 December 2023
Balance at 1 January 2022
Profit for the year
Other comprehensive
(expense)/income
Total comprehensive income/
(expense) for the year
Transactions with owners:
Share based payments
Current tax on share based payment
Deferred tax on share based payment
Equity dividends paid
Purchase of own shares
Issue of own shares held on exercise
of share options
Acquisition of subsidiary non-
controlling interest
At 31 December 2022
Notes
25
21
31
24
Notes
25
21
31
24
Share
capital
£’000
4,096
–
–
Share
premium
£’000
4,458
–
–
–
–
–
–
–
–
–
–
–
–
Retained
earnings
£’000
Other reserves
(See Note 24)
£’000
Total equity
attributable
to owners
£’000
Non-controlling
interest
£’000
807,894
21,060
(3,963)
(400,290)
–
(443)
416,158
21,060
(4,406)
17,097
(443)
16,654
2,308
(147)
(34,907)
–
–
–
2,308
(147)
(34,907)
(1,075)
1,075
–
51
–
–
–
–
–
–
–
Total equity
£’000
416,209
21,060
(4,406)
16,654
–
2,308
(147)
(34,907)
–
–
4,096
–
4,458
(199)
790,971
–
(399,658)
(199)
399,867
(51)
–
(250)
399,867
Share
capital
£’000
4,096
–
Share
premium
£’000
4,458
–
Retained
earnings
£’000
785,609
86,908
Other reserves
(See Note 24)
£’000
(370,934)
–
Total equity
attributable
to owners
£’000
423,229
86,908
Non-controlling
interest
£’000
–
(28)
Total equity
£’000
423,229
86,880
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
(33,434)
492
(32,942)
–
(32,942)
53,474
492
53,966
(28)
53,938
2,547
1
116
(33,701)
–
–
–
–
–
(30,000)
2,547
1
116
(33,701)
(30,000)
(152)
152
–
–
–
–
–
–
–
2,547
1
116
(33,701)
(30,000)
–
–
4,096
–
4,458
–
807,894
–
(400,290)
–
416,158
79
51
79
416,209
The notes on pages 136 to 177 form an integral part of these consolidated financial statements.
134
Ibstock Plc | Annual Report and Accounts 2023 Consolidated cash flow statement
Cash flow from operating activities
Cash generated from operations (Note 27)
Interest paid
Other interest paid – lease liabilities
Tax received/(paid)
Net cash inflow from operating activities
Cash flows from investing activities
Purchase of property, plant and equipment
Proceeds from sale of property, plant and equipment
Proceeds from sale of property, plant and equipment – exceptional
Purchase of intangible assets
Settlement of deferred consideration
Payment for acquisition of subsidiary undertaking, net of cash acquired (Note 28)
Interest received
Net cash outflow from investing activities
Cash flows from financing activities
Dividends paid (Note 31)
Drawdown of borrowings
Repayment of borrowings
Debt issue costs
Repayment of lease liabilities
Cash outflow from purchase of shares
Acquisition of non-controlling interests
Net cash outflow from financing activities
Net decrease in cash and cash equivalents
Cash and cash equivalents at beginning of the year
Exchange (losses)/gains on cash and cash equivalents
Cash and cash equivalents at end of the year
The notes on pages 136 to 177 form an integral part of these consolidated financial statements.
Reconciliation of changes in cash and cash equivalents to movement in net debt1
Net decrease in cash and cash equivalents
Proceeds from borrowings
Repayment of borrowings
Non-cash debt movement
Effect of foreign exchange rate changes
Movement in net debt1
Net debt1 at start of year
Net debt1 at end of year (Note 3)
Comprising:
Cash and cash equivalents
Short-term borrowings (Note 18)
Long-term borrowings (Note 18)
1 Alternative performance measures are described in Note 3 to the consolidated financial statements.
Year ended
31 December
2023
£’000
Year ended
31 December
2022
£’000
63,656
(3,667)
(2,368)
630
58,251
(65,653)
2,070
–
(2,423)
(112)
(2,642)
257
(68,503)
(34,907)
30,000
(5,000)
–
(9,986)
–
(250)
(20,143)
(30,395)
54,283
(16)
23,872
137,765
(2,888)
(1,274)
(11,699)
121,904
(58,354)
50
7,833
(5,573)
–
(959)
124
(56,879)
(33,701)
–
–
(259)
(8,010)
(30,000)
–
(71,970)
(6,945)
61,199
29
54,283
Year ended
31 December
2023
£’000
(30,395)
(30,000)
5,000
717
(16)
(54,694)
(45,922)
(100,616)
Year ended
31 December
2022
£’000
(6,945)
–
–
(134)
29
(7,050)
(38,872)
(45,922)
23,872
(25,496)
(98,992)
(100,616)
54,283
(436)
(99,769)
(45,922)
135
Ibstock Plc | Annual Report and Accounts 2023Additional informationGovernanceStrategic ReportFinancial Statements Notes to the consolidated financial statements
1. Summary of significant accounting policies
Authorisation of financial statements
The consolidated financial statements of Ibstock Plc,
which has a premium listing on the London Stock Exchange,
for the year ended 31 December 2023 were authorised for
issue in accordance with a resolution of the Directors on
5 March 2024. The balance sheet was signed on behalf
of the Board by J Hudson and C McLeish.
Ibstock Plc is a public company limited by shares, which is
incorporated in the United Kingdom and registered in England.
The registered office is Leicester Road, Ibstock, Leicestershire
LE67 6HS and the company registration number is 09760850.
The principal activities of the Company and its subsidiaries
(the ‘Group’) and the nature of the Group’s operations are
set out in the Strategic Report on pages 2 to 71.
Basis of preparation
The consolidated financial statements of Ibstock Plc for
the year ended 31 December 2023 have been prepared
in accordance with UK adopted International Accounting
Standards (IAS). They are prepared on the basis of all IFRS
accounting standards and interpretations that are mandatory
for the year ended 31 December 2023 and in accordance
with the Companies Act 2006. The comparative financial
information has also been prepared on this basis.
These consolidated financial statements are prepared on
a going concern basis, under the historical cost convention.
The consolidated financial statements are presented in
Sterling and all values are rounded to the nearest thousand,
except where otherwise indicated.
The significant accounting policies are set out below.
Basis of consolidation
The consolidated financial statements comprise the financial
statements of Ibstock Plc and its subsidiaries as at 31 December
2023. The financial statements of subsidiaries are prepared
for the same reporting period as the Parent Company, using
consistent accounting policies except Valerie Coltman Holdings
Limited and Coltman Precast Concrete Limited, of which the
financial statements are prepared as at 31 March 2024. All
intra-Group balances, transactions, income and expenses and
profit and losses resulting from intra-Group transactions have
been eliminated in full. Subsidiaries are consolidated from the date
on which the Group obtains control and cease to be consolidated
from the date on which the Group no longer retains control.
Details of all the subsidiaries of the Group are given in Note 29.
The subsidiaries are all entities over which the Group has control.
The Group controls an entity when the Group is exposed to, or
has rights to, variable returns from its involvement with the entity
and has the ability to affect those returns through its power over
the entity.
Going concern
Despite the macroeconomic downturn, there are initial positive
external market indicators, with inflation continuing to fall
and mortgage rates stabilising, which are expected to increase
consumer confidence looking forward. Management does not
believe that the going concern basis of preparation represents
a significant judgement.
The Group’s financial planning and forecasting process consists
of a budget for the current year followed by a medium-term
projection, and the Group also re-forecasts the current year
performance on a quarterly basis. The going concern assessment
period extends to June 2025. The Directors have reviewed and
robustly challenged the assumptions about future trading
performance, operational and capital expenditure and debt
requirements within these forecasts including the Group’s
liquidity and covenant forecasts, and stress tested within
their going concern assessment.
In arriving at their conclusion on going concern, the Directors
have given due consideration to whether the funding and liquidity
resources above are sufficient to accommodate the principal risks
and uncertainties faced by the Group, particularly those relating
to economic conditions, operational disruption and the effect
of climate change.
Group forecasts have been prepared which reflect both actual
conditions and estimates of the future reflecting macroeconomic
and industry-wide projections, as well as matters specific to
the Group.
The Group has financing arrangements, comprising £100 million
of private placement notes with maturities of between 2028 and
2033 and a £125 million Revolving Credit Facility (RCF) for an initial
four year tenor, with an enacted one year extension option, both
of which were arranged in 2021. At 31 December 2023 the Group
had drawn £25 million under the RCF.
Covenants under the Group’s RCF and private placement notes
require leverage of no more than three times net debt to adjusted
EBITDA1, and interest cover of no less than four times, tested
bi-annually at each reporting date with reference to the previous
12 months. At 31 December 2023 covenant requirements were
met with significant headroom.
The key uncertainty faced by the Group is the industry demand
for its products in light of macroeconomic factors. Accordingly,
the Group has modelled financial scenarios that see reduction
in the demand for its products thereby stress testing the Group’s
resilience. For each scenario, cash flow and covenant compliance
forecasts have been prepared. In the most severe but plausible
scenario industry demand for Clay and Concrete products are
projected to be around 40% lower than 2022 in the 2024 year,
recovering to around 28% lower than 2022 in 2025.
In addition, the Group has prepared a reverse stress test to
evaluate the industry demand reduction at which it would be
likely to breach the debt covenants, before any further mitigating
actions were taken. This test indicates that, at a reduction of 48%
in sales volumes versus 2022 levels, in both 2024 and the first half
of 2025, the Group would be at risk of breaching its covenants.
In the severe but plausible scenario, the Group has sufficient
liquidity headroom against its covenants, with covenant headroom
expressed as a percentage of annual adjusted EBITDA1 being in
excess of 30%.
The Directors consider this to be a highly unlikely scenario, and in
the event of an anticipated covenant breach, the Group would seek
to take further steps to mitigate, including the disposal of valuable
land and building assets and restructuring steps to reduce the fixed
cost base of the Group.
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Ibstock Plc | Annual Report and Accounts 2023 Having taken account of the various scenarios modelled, and in
light of the mitigations available to the Group, the Directors are
satisfied that the Group has sufficient resources to continue in
operation for a period of not less than 12 months from the date
of this report.
Accordingly, the consolidated financial information has been
prepared on a going concern basis.
New or amended standards that are effective for the current year
In the current year, the Group has applied the amendments below
to IFRS Standards and Interpretations issued by the International
Accounting Standards Board (IASB) that are mandatorily effective
for an accounting period that begins on or after 1 January 2023.
Their adoption has not had any material impact on the disclosures
or on the amounts reported in these financial statements.
• IFRS 17 – Insurance contracts;
• Amendment to IAS 1 and IFRS Practice statement 2 –
Disclosure of accounting policies;
• Amendments to IAS 8 – Definition of accounting estimates;
• Amendments to IAS 12 – Deferred tax related to assets
and liabilities arising from a single transaction; and
• Amendments to IAS 12 – Income taxes – International tax
reform – Pillar Two Model Rules.
The amendments listed above did not have any impact on the
amounts recognised in prior periods and are not expected to
significantly affect the current or future periods.
New and revised standards in issue but not yet effective
At the date of authorisation of these financial statements,
the Group has not applied the following new and revised
IFRS Standards that have been issued but are not yet effective:
Foreign currency translation
(a) Functional and presentation currency
Items included in the financial statements of each of the Group’s
entities are measured using the currency of the primary economic
environment in which the entity operates (“the functional currency”).
The consolidated financial statements are presented in Sterling (£),
which is the Group’s presentation currency.
(b) Transactions and balances
Foreign currency transactions are translated into the functional
currency using the exchange rates prevailing at the dates of the
transactions or valuation where items are remeasured. Foreign
exchange gains and losses resulting from the settlement of
such transactions and from the translation at year end exchange
rates of monetary assets and liabilities denominated in foreign
currencies are recognised in the income statement, except when
deferred in other comprehensive income as qualifying cash flow
hedges and qualifying net investment hedges. Foreign exchange
gains and losses that relate to borrowings and cash and cash
equivalents are presented in the income statement within net
finance costs. All other foreign exchange gains and losses are
presented within the income statement.
Property, plant and equipment
Property, plant and equipment is stated at the cost to the Group
less depreciation. The cost of property, plant and equipment
includes directly attributable costs. Costs incurred to gain access
to mineral reserves (typically stripping costs) are capitalised and
depreciated over the life of the quarry, which is based on the
estimated tonnes of raw material to be extracted from the
reserves. Management assesses the Group’s assets separating
their cost into (i) the local statutory books’ historical cost and
(ii) the associated fair value uplift, which arose on the acquisition
of the Group in 2015.
• Amendments to IFRS 10 and IAS 28 – Sale or Contribution of
Assets between an Investor and its Associate or Joint Venture;
Details of cost and accumulated depreciation are included
in Note 13.
• Amendments to IAS 1 – Classification of Liabilities as Current
or Non-current;
• Amendments to IAS 1 – Non-current Liabilities with Covenants;
• Amendments to IAS 7 and IFRS 7 – Supplier Finance
Arrangements; and
• Amendments to IFRS 16 – Lease Liability in a Sale and Leaseback.
The Directors do not expect that the adoption of the Standards
listed above will have a material impact on the financial statements
of the Group in the current or future reporting periods.
Segment reporting
Operating segments are reported in a manner consistent with the
internal reporting provided to the chief operating decision-makers
(CODMs). The CODMs, who are responsible for allocating resources
and assessing performance of the operating segments, have been
identified as the Chief Executive Officer and Chief Financial Officer
of the Group.
The CODMs review the key profit measure, Adjusted EBITDA1, as
defined in Note 3, and consider the Group’s reportable segments
to be Clay and Concrete.
Depreciation is provided on the cost of all assets (except assets
in the course of construction and land), so as to write off the cost,
less residual value, on a straight line basis over the expected useful
economic life of the assets concerned, as follows:
Asset classification
Land
Freehold buildings
Plant, machinery and equipment
Mineral reserves
Useful life
Not depreciated
15 – 60 years
2 – 40 years
Amortised on a usage basis
Exploration expenditure relates to the initial search for mineral
deposits with economic potential and is not capitalised. Evaluation
expenditure relates to a detailed assessment of deposits or other
projects that have been identified as having economic potential
and in obtaining permissions to extract clay. Capitalisation of
evaluation expenditure within ‘Mineral reserves’ commences
when there is a high degree of confidence that the Group will
determine that a project is commercially viable, i.e., the project
will provide a satisfactory return relative to its perceived risks,
and therefore it is considered probable that future economic
benefits will flow to the Group.
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Notes to the consolidated financial statements continued
1. Summary of significant accounting policies continued
Mineral reserves may be declared for an undeveloped project
before its commercial viability has been fully determined.
Evaluation costs may continue to be capitalised during the
period between declaration of reserves and approval to
extract clay as further work is undertaken in order to refine
the development case to maximise the project’s returns.
The carrying values of property, plant and equipment are reviewed
for impairment if events or changes in circumstances indicate the
carrying value may not be recoverable. The carrying values of
capitalised evaluation expenditure are reviewed for impairment
by management.
Useful lives and residual values are reviewed at each balance
sheet date and revised where expectations are significantly
different from previous estimates. In such cases, the depreciation
charge for current and future periods is adjusted accordingly.
Intangible assets
Separately acquired brands and non-contractual customer
relationships are shown at historical cost. Brands and customer
relationships have a finite useful life and are carried at cost less
accumulated amortisation. Amortisation is calculated using the
straight line method to allocate the cost of brands and customer
relationships over their estimated useful lives as follows:
Useful life
Asset classification
Brands
10 – 50 years
Customer contracts and relationships 10 – 20 years
Licences represent carbon allowances the Group purchased,
which are held at cost and surrendered, as required, to meet
carbon emissions in excess of the Group’s granted allowances
under the UK Emission Trading Scheme (ETS). The carbon
allowances are recognised as intangible assets and, in the
absence of clear guidance from the accounting standards,
classified as non-current assets. The costs to settle the forecast
emissions in the year in excess of granted allowances are
recognised on a straight line basis across the year.
For implementation costs in a cloud service contract which are
distinct from the related software, the costs are recognised as an
expense as incurred (as the service is received) unless it gives rise
to a separate intangible asset. The costs of services provided by the
cloud vendor, which are not distinct from access to the software are
recognised as an expense over the period of access to the software.
Goodwill is initially recognised and measured as the excess of
consideration transferred over the fair value of the net assets
acquired in a business combination. Goodwill is not amortised
but is reviewed for impairment at least annually. For the purpose
of impairment testing, goodwill is allocated to the Group’s cash-
generating unit (or groups of cash-generating units) expected to
benefit from the synergies of the combination. Cash-generating
units to which goodwill has been allocated are tested for impairment
annually, or more frequently when there is an indication that the
asset may be impaired.
If the recoverable amount of the cash-generating unit is less than
the carrying amount of the unit, the impairment loss is allocated
first to reduce the carrying amount of any goodwill allocated to the
unit and then to the other assets of the unit pro-rata on the basis
of the carrying amount of each asset in the unit. Any impairment
loss recognised for goodwill is not reversed in a subsequent period.
On disposal of a cash-generating unit, the attributable amount
of goodwill is included in the determination of the profit or loss
on disposal. There has been no impairment of goodwill in
the current or prior year.
For further details, see Note 12.
Impairment of non-financial assets
Assets that are subject to amortisation or depreciation, such as
brands and non-contractual customer relationships and property,
plant and equipment, are reviewed for impairment whenever
events or changes in circumstances indicate that the carrying
amount may not be recoverable.
An impairment loss is recognised immediately within the income
statement for the amount by which the asset’s carrying amount
exceeds its recoverable amount. The recoverable amount is the
higher of an asset’s fair value less costs of disposal and value-in-use.
For the purposes of assessing impairment, assets are grouped
at the lowest levels for which there are largely independent cash
inflows (cash-generating units). Prior impairments of non-financial
assets (other than goodwill) are reviewed for possible reversal
at each reporting date at which point they are immediately
recognised within the income statement.
For assets excluding goodwill, an assessment is made at each
reporting date whether there is any indication that previously
recognised impairment losses may no longer exist or may have
decreased. If such indication exists, the Group estimates the asset’s
or CGU’s recoverable amount. A previously recognised impairment
loss is reversed only if there has been a change in the assumptions
used to determine the asset’s recoverable amount since the last
impairment was recognised. The reversal is limited so that the
carrying amount of the asset does not exceed its recoverable
amount, nor exceed the carrying amount that would have been
determined, net of depreciation, had no impairment loss been
recognised for the asset in prior years. As the Group has no assets
carried at revalued amounts, such reversal is recognised in the
consolidated income statement.
The group, where appropriate, separately applies the requirements
of IAS 36 to land and to buildings on sites owned considering the
individual recoverable values of each and the reliability in
estimating these.
For further details, see Note 16.
Leases
The Group as lessee
The Group leases various offices, warehouses, factories, mobile
plant and cars. Rental contracts are typically made for fixed periods
of three to 12 years, but may have extension options, as described
below, and contain a range of terms and conditions. The lease
agreements do not impose any covenants, but leased assets may
not be used as security for borrowing purposes. Management also
reviews other contracts entered into during the period to assess
whether they may contain embedded leases. Such contracts are,
or contain, a lease if it conveys the right to control the use of a
specified asset (e.g. plant, property and equipment) over a period
in exchange for consideration.
Leases are recognised as right-of-use assets and a corresponding
liability at the date on which the leased asset is available for use
by the Group. Each lease payment is allocated between the liability
and finance cost.
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Ibstock Plc | Annual Report and Accounts 2023
The finance cost is charged to the income statement over the lease
period, so as to produce a constant periodic rate of interest on the
remaining balance of the liability for each period. The right-of-use
asset is depreciated over the shorter of the asset’s useful life and
the lease term on a straight line basis.
Assets and liabilities arising from a lease are initially measured on
a present value basis. Lease liabilities include the net present value
of the following lease payments:
• fixed payments (including in-substance fixed payments),
less any incentives receivable;
• variable lease payments that are based on an index or rate;
• the exercise price of a purchase option, if the lessee is
reasonably certain to exercise that option; and
• payments of penalties for terminating the lease, if the lease
term reflects the lessee exercising that option.
The lease payments are discounted using the interest rate implicit
in the lease. If that rate cannot be determined, the lessee’s
incremental borrowing rate is used, being the rate that the lessee
would have to pay to borrow the funds necessary to obtain an
asset of similar value in a similar economic environment with
similar terms and conditions.
Right-of-use assets are measured at cost comprising the following:
• the amount of the initial measurement of lease liability;
• any lease payments made at or before the commencement date
less any lease incentives received;
• any initial direct costs; and
• restoration costs.
Payments associated with short-term leases and leases of
low-value assets are recognised on a straight line basis as an
expense within the income statement. Short-term leases are
leases with a term of 12 months or less. Low-value assets
generally comprise IT equipment.
(i) Variable lease payments
Some property leases contain variable lease payment terms
that are linked to the extraction of raw materials. For individual
properties, a percentage of the lease payments are on the
basis of the variable payment terms.
Variable lease payments that are dependent upon the level of
extraction are recognised within the income statement in the
period in which the extraction which triggers that payment occurs.
The value of variable lease payments and the impact of
movements in the Group’s levels of extraction are insignificant
in current and prior periods.
(ii) Extension and termination options
Extension and termination options are included in a small number
of property leases across the Group. The majority of such options
are exercisable only by the Group and not by the respective lessor.
In determining the lease term, management considers all facts
and circumstances that create an economic incentive to exercise
an extension option, or not exercise a termination option.
Extension options (or periods after termination options) are only
included in the future cash outflows if the lease is reasonably
certain to be extended (or not terminated). This assessment
is reviewed if a significant event or a significant change in
circumstances occurs which affects this assessment and that
is within the control of the lessee. During the current financial period,
the financial effect of revising lease terms to reflect the effect of
exercising extension and termination options was insignificant.
The Group as lessor
The Group enters into lease agreements as a lessor with respect
to some of its surplus properties.
Leases for which the Group is a lessor are classified as either
finance or operating leases. Whenever the terms of the lease
transfer substantially all the risks and rewards of ownership
to the lessee, the contract is classified as a finance lease.
All other leases are classified as operating leases.
When the Group is an intermediate lessor, it accounts for the head
lease and the sub-lease as two separate contracts. The sub-lease
is classified as a finance or operating lease by reference to the
right-of-use asset arising from the head lease.
Rental income from operating leases is recognised on a straight
line basis over the term of the relevant lease. Initial direct costs
incurred in negotiating and arranging an operating lease are
added to the carrying amount of the leased asset and amortised
on a straight line basis over the lease term.
Inventories
Inventories are stated at the lower of cost and net realisable value.
Cost includes all costs incurred in bringing each product to its
present location and condition. Raw materials, consumables
and goods for resale are recognised on a weighted average cost
basis, while work in progress and finished goods are held at direct
cost plus an appropriate proportion of production overheads.
Net realisable value is the estimated selling price in the ordinary
course of business, less applicable variable selling expenses.
The Group records provisions for obsolete and slow-moving
inventory on the basis of historical sales values and volumes,
respectively. These inventory provisions are updated regularly
to reflect management’s most recent information.
Investments and other financial assets
Classification
The Group classifies its financial assets in the following
measurement categories:
• those to be measured subsequently at fair value (either through
other comprehensive income (OCI) or through profit or loss); and
• those to be measured at amortised cost.
The classification depends on the entity’s business model for
managing the financial assets and the contractual terms of
the cash flows.
The Group reclassifies debt investments when and only when
its business model for managing those assets changes.
Recognition and derecognition
Purchases and sales of financial assets are recognised on trade
date, the date on which the Group commits to purchase or sell the
asset. Financial assets are derecognised when the rights to receive
cash flows from the financial assets have expired or have been
transferred and the Group has transferred substantially all the
risks and rewards of ownership.
On derecognition of a financial asset measured at amortised cost,
the difference between the asset’s carrying amount and the sum
of the consideration received and receivable is recognised within
the income statement.
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1. Summary of significant accounting policies continued
Measurement
At initial recognition, the Group measures a financial asset at
its fair value plus, in the case of a financial asset not at fair value
through profit or loss (FVPL), transaction costs that are directly
attributable to the acquisition of the financial asset.
Forward energy contracts
The Group has a long-standing practice of locking in prices for
gas and electricity used in its production activities and achieves
this by committing to a certain volume of consumption in future
months which creates a contractual commitment and secures
a certain price.
The effective portion of changes in the fair value of derivatives
that are designated as cash flow hedges is recognised in other
comprehensive income and accumulated under the cash flow
hedging reserve. Any gain or loss relating to the ineffective
portion of the hedge is recognised immediately in profit or loss.
Amounts previously recognised in other comprehensive income
and accumulated in equity are reclassified to the related capital
expenditure project within the balance sheet in the periods when
the underlying hedged item affects the balance sheet.
The Group discontinues hedge accounting should the hedge
relationship cease to meet the qualifying criteria, or when the
hedging instrument expires, is sold, terminated or exercised.
The Group takes delivery of the energy and so the Directors believe
it meets the requirements of the own use scope exemption in
IFRS 9 Financial Instruments. As such, these contracts are not held
on the balance sheet at fair value but rather treated as executory
contracts and energy purchases are accounted for in the period in
which the gas and electricity is consumed, at the contracted price.
Derivatives and hedging
The Group enters into derivative transactions to manage its exposure
to foreign exchange rate risks on major capital expenditure projects.
Derivatives are recognised initially at fair value on the date the
contract is entered into and subsequently remeasured to their
fair value at each reporting date.
A derivative with a positive fair value is recognised as a financial
asset, whereas a derivative with a negative fair value is recognised
as a financial liability. Derivatives are not offset in the financial
statements unless the Group has both the legal right and intention
to offset.
A derivative is presented as a non-current asset or a non-current
liability if the remaining maturity of the instrument is more than
12 months and is not expected to be realised or settled within
12 months. Other derivatives are presented as current assets or
current liabilities.
The Group designates certain derivatives as hedging instruments
in respect of foreign currency risk.
These derivatives are designated and effective as hedging
instruments, in which event the timing of the transfer within the
balance sheet or recognition in the income statement depends
on the nature of the hedge relationship.
Hedges of foreign exchange risk on firm commitments are accounted
for as cash flow hedges. At the inception of the hedge relationship, the
Group documents the relationship between the hedging instrument
and the hedged item, along with its risk management objectives and
its strategy for undertaking various hedge transactions. The Group
documents whether the hedging instrument is effective in offsetting
the hedged risk, by confirming that:
• there is an economic relationship between hedged items and
the hedging instrument;
• the effect of credit risk does not dominate the value changes
that result from that economic relationship; and
• the planned ratio of hedge: hedge item is the same as the actual
ratio of hedge: hedge item.
Debt instruments
Subsequent measurement of debt instruments depends on the
Group’s business model for managing the asset and the cash flow
characteristics of the asset. The measurement category into which
the Group classifies its debt instruments is amortised cost.
Assets that are held for collection of contractual cash flows where
those cash flows represent solely payments of principal and interest
are measured at amortised cost. Interest income from these
financial assets is included in finance income using the effective
interest rate method. Any gain or loss arising on derecognition
is recognised directly in the income statement.
Impairment
The Group assesses on a forward-looking basis the expected credit
losses associated with its debt instruments carried at amortised cost
and fair value through other comprehensive income. The impairment
methodology applied depends on whether there has been a
significant increase in credit risk. For trade receivables, the Group
applies the simplified approach permitted by IFRS 9, which requires
expected lifetime losses to be recognised from initial recognition
of the receivables, see Note 22 for further details.
No significant impairment losses were recorded in the current or
prior year. Should they arise, impairment losses are presented as
a separate line item in the Group consolidated income statement.
Trade and other receivables
Trade receivables are amounts due from customers for merchandise
sold in the ordinary course of business. Collection is expected in
one year or less and trade receivables are classified as current
assets accordingly. Trade receivables are measured at amortised
cost using the effective interest method, less provision for impairment.
In the current and prior periods, the Group did not engage in material
factoring arrangements.
Cash and cash equivalents
In the consolidated balance sheet, cash and cash equivalents
reflects cash in hand at the balance sheet date, deposits held
at call with banks, other short-term highly liquid investments
with original maturities of three months or less.
Trade payables
Trade payables are obligations to pay for goods or services
that have been acquired in the ordinary course of business from
suppliers. Accounts payable are classified as current liabilities
where payment is due within one year or less. If not, they are
presented as non-current liabilities.
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Ibstock Plc | Annual Report and Accounts 2023 Trade payables are recognised initially at fair value and
subsequently measured at amortised cost using the effective
interest method. In the current and prior periods, the Group
did not engage in material reverse factoring arrangements.
Borrowings
The Group’s borrowings comprise a revolving credit facility (RCF)
and private placement loan notes. Borrowings are recognised
initially at fair value, net of directly attributable transaction
costs incurred. All other costs are expensed as incurred.
Borrowings are subsequently carried at amortised cost.
Borrowings are classified as current liabilities unless the Group
has an unconditional right to defer settlement of the liability
for at least 12 months after the balance sheet date.
Finance cost on borrowings is treated as an expense in the income
statement, with the exception of interest costs incurred on the
financing of major projects, which are capitalised within property,
plant and equipment.
Fees paid on the establishment of loan facilities are recognised
as transaction costs of the loan to the extent that it is probable
that some or all of the facility will be drawn down. In this case,
the fee is deferred until the draw-down occurs.
To the extent there is evidence that it is probable that some or
all of the facility will be drawn down, the fee is capitalised as a
prepayment for liquidity services and amortised over the period of
the facility to which it relates. Fees relating to short-term variations
in financing conditions and terms are recognised in profit or loss in
the period in which they are incurred.
An exchange of debt instruments with substantially different terms
is accounted for as an extinguishment of the original financial
liability and the recognition of a new financial liability. Similarly,
a substantial modification of the terms of an existing financial
liability is accounted for as an extinguishment of the original
financial liability and the recognition of a new financial liability.
Employee benefits
The Group operates various post-employment schemes, including
both defined benefit and defined contribution pension plans.
Pensions
A defined contribution plan is a pension plan under which the Group
pays fixed contributions into a separate entity. The Group has no
legal or constructive obligations to pay further contributions if
the fund does not hold sufficient assets to pay all employees the
benefits relating to employee service in the current and prior periods.
For defined contribution plans, the Group pays contributions
to publicly or privately administered pension insurance plans on
a mandatory, contractual or voluntary basis. The Group has no
further payment obligations once the contributions have been
paid. The Group recognises contributions payable to defined
contribution plans in exchange for employee services in
employee benefit expense.
A defined benefit plan is a pension plan that is not a defined
contribution plan. Typically defined benefit plans define an
amount of pension benefit that an employee will receive on
retirement, usually dependent on one or more factors such
as age, years of service and compensation.
The amount recognised in the balance sheet in respect of defined
benefit pension plans is the fair value of plan assets less the present
value of the defined benefit obligation at the end of the reporting
period. The defined benefit obligation is calculated annually by
independent actuaries using the projected unit credit method.
The present value of the defined benefit obligation is determined
by discounting the estimated future cash outflows using interest
rates of high-quality corporate bonds that are denominated in the
currency in which the benefits will be paid, and that have terms to
maturity approximating to the terms of the related pension obligation.
Where defined benefit schemes have a surplus, the surplus is
recognised if future economic benefits are available to the
entity in the form of a reduction in the future contributions
or a right to refund.
Past-service costs are recognised immediately in the income
statement. The net interest cost is calculated by applying the
discount rate to the net balance of the defined benefit obligation
and the fair value of plan assets, taking account of any changes in
the defined benefit asset/liability during the period as a result of
contributions and benefit payments. This cost is included in interest
expense in the income statement.
When the benefits of a defined benefit plan are changed or when
the plan is curtailed, the change in the present value of the defined
benefit obligation arising that relates to the plan amendment or
curtailment is recognised immediately within the income statement
on its occurrence. Before determining the past service cost (including
curtailment gains or losses) or a gain or loss on settlement, the net
defined benefit obligation (asset) is remeasured using the current
fair value of plan assets and current actuarial assumptions (including
current market interest rates and other current market prices)
reflecting the benefits offered under the plan before the plan
amendment, curtailment or settlement.
Costs of managing the plan assets, remeasurement gains
and losses arising from experience adjustments and changes
in actuarial assumptions are charged or credited in other
comprehensive income in the period in which they arise.
Provisions
Provisions are recognised when: the Group has a present legal or
constructive obligation as a result of past events; it is probable that
an outflow of resources will be required to settle the obligation;
and the amount has been reliably estimated. Provisions are not
recognised for future operating losses.
Provisions are measured at the present value of the risk-assessed
expenditures expected to be required to settle the obligation
using a pre-tax risk-free discount rate to reflect current market
assessments of the time value of money. The increase in the
provision due to passage of time is recognised as interest expense.
The restoration provision is to fund future obligations at a number
of sites that the Group is associated with and where the Group has
any constructive obligation to restore once it has fully utilised the
site. Provisions for dilapidations are recognised on a lease-by-lease
basis and are based on the Group’s discounted best estimate of
the likely committed cash outflows. The restructuring provision
is to fund the estimated restructuring costs and only arises when
all the criteria in IAS 37 Provisions are met by the Group.
141
Ibstock Plc | Annual Report and Accounts 2023Additional informationGovernanceStrategic ReportFinancial Statements Notes to the consolidated financial statements continued
1. Summary of significant accounting policies continued
Revenue
Revenue represents the fair value of consideration receivable
for goods supplied by the Group, exclusive of local sales tax and
trade discounts and after eliminating sales within the Group. All of
revenue is attributable to the principal activities of the Group being
the manufacture and sale of concrete products, clay facing bricks
and associated special shaped and fabricated clay products.
Revenue is recognised when the Group’s performance obligation
is satisfied, which is usually when the promised goods and services
are transferred to the customer. In a bill and hold arrangement,
revenue is recognised when a customer has obtained control of
a product, which arises when all of the following criteria are met:
(a) the reason for the arrangement is substantive, (b) the product
has been identified separately as belonging to the customer,
(c) the product is ready for delivery in accordance with the terms of
the arrangement, and (d) the Company does not have the ability
to use the product or sell the product to another customer.
Customer rebates
Provisions for rebates to customers are based upon the terms of
individual contracts, with rebates granted based upon a tiered
structure dependent upon an individual customer’s purchases
during the rebate period. Customer rebates are recorded in the
same period as the related sales as a deduction from revenue
and the vast majority are coterminous with the Group’s financial
year end.
For those individual contracts that are non-coterminous, the
Group estimates the provision for this variable consideration based
on the most likely outcome amount determined by the terms
of each agreement at the time the revenue is recognised. At the
financial year end, due to settlement of rebates with customers,
the level of remaining estimation is limited and the risk of
a significant reversal of recognised revenue is negligible.
Other income
Other income is attributable to rental income from properties,
landfill and gas activity. Other expenses represent associated
expenses. This is not deemed to be a principal activity of the Group.
Rental income received under operating leases is recognised on a
straight line basis over the term of the relevant lease. Assets leased
by the Group to third parties are depreciated in line with the
Group’s normal depreciation policy.
Research and development
Research and development expenditure is written off as incurred,
except that development expenditure incurred on an individual
project is capitalised when relevant criteria under IAS 38 have been
met. Any expenditure carried forward is amortised in line with the
expected future sales from the related project. No development
costs were capitalised in either the current or prior years.
Exceptional items1
The Group presents as exceptional on the face of the income
statement those items of income and expense which, because
of the materiality, nature and/or expected infrequency of the
events giving rise to them, merit separate presentation to allow
shareholders to further understand elements of financial
performance in the period, so as to facilitate comparison
with future years and to assess trends in financial performance.
See Note 5 for further details of exceptional items1 recognised
in the current period.
The Directors believe that the use of alternative performance
measures (APMs), such as exceptional items1, provide useful
information for shareholders. The Group uses APMs to aid
comparability of its performance and position between periods.
The APMs used represent measures used by management and
Board to monitor performance and plan. Additionally, certain
APMs are used by the Group in setting Director and management
remuneration. Detailed descriptions of APMs used throughout
these financial statements are included within Note 3.
APMs used by the Group are generally not defined under
IFRS and may not be comparable with similarly titled
measures reported by other companies.
It is not believed that adjusted measures are a substitute for,
or superior to, statutory measurements.
Government grants
Government grants are recognised within the income statement
on a systematic basis over the periods in which the Group
recognises as expenses the related costs for which the grants
are intended to compensate. Grants are presented as part
of the income statement and are deducted in reporting the
related expense.
Government grants that are receivable as compensation for
expenses or losses already incurred or for the purpose of giving
immediate financial support to the Group with no future related
costs are recognised within the income statement in the period
in which they become receivable. Government grants are not
recognised until there is reasonable assurance that the Group
will comply with the conditions attached to them and that the
grants will be received.
Taxation
Tax on the profit or loss for the year comprises current and
deferred tax. Tax is recognised in the income statement except
for tax relating to items recognised in other comprehensive income
or directly in equity.
Current tax is the expected tax payable or recoverable on the
taxable income or loss for the year, using tax rates enacted
or substantively enacted at the balance sheet date, and any
adjustment to tax payable in respect of previous years.
During the ordinary course of business, there are transactions
and calculations for which the ultimate tax determination may be
uncertain. The calculation of the tax charge therefore necessarily
involves a degree of estimation and judgement. The tax liabilities
are based on estimates of whether additional taxes will be due
and tax assets are recognised on the basis of probable future
recoverability. This requires management to exercise judgement
based on its interpretation of tax laws and the likelihood of
settlement of tax liabilities or recoverability of tax assets. To the
extent that the final outcome differs from the estimates made,
tax adjustments may be required which could have an impact
on the tax charge and profit for the year in which such a
determination is made.
1 Alternative performance measures are described in Note 3 and exceptional items
are described in Note 5 to the consolidated financial statements.
142
Ibstock Plc | Annual Report and Accounts 2023 Deferred tax is provided on temporary differences between the tax
bases of assets and liabilities and their carrying amounts included
in the financial statements. However, deferred tax liabilities are
not recognised if they arise from the initial recognition of goodwill;
deferred tax is not accounted for if it arises from initial recognition
of an asset or liability in a transaction other than a business
combination that at the time of the transaction affects neither
accounting nor taxable profit or loss.
The amount of deferred tax is calculated using tax rates that have
been enacted or substantively enacted at the balance sheet date
and are expected to apply when the related deferred tax asset is
realised or deferred tax liability is settled. Deferred tax assets and
liabilities are not subject to discounting.
A deferred tax asset is recognised only to the extent that it is
probable that future taxable profits will be available, against
which the temporary difference can be utilised.
Deferred tax liabilities are provided on taxable temporary
differences arising from investments in subsidiaries except
for deferred tax liabilities where the timing of the reversal of
the temporary difference is controlled by the Group and it is
probable that the temporary difference will not reverse in the
foreseeable future.
Deferred tax assets are recognised on deductible temporary
differences arising from investments in subsidiaries only to the
extent that it is probable the temporary difference will reverse in
the future and there is sufficient taxable profit available against
which the temporary difference can be utilised. Deferred tax assets
and liabilities are offset where there is a legally enforceable right
to offset current tax assets against current tax liabilities where
these have been levied by the same tax authority on either the
same taxable entity or different taxable entities within the Group
where there is an intention to settle the balances on a net basis.
Dividend distribution
Dividend distributions to Ibstock Plc shareholders are recognised
in the Group’s financial statements in the period in which the
dividends are approved in a general meeting, or when paid in
the case of an interim dividend.
Assets held for sale
Non-current assets and disposal groups are classified as held for
sale only if available for immediate sale in their present condition
and a sale is highly probable and expected to be completed within
one year from the date of classification. Such assets and disposal
groups are measured at the lower of carrying amount and fair
value less the costs to sell. Non-current assets classified as held
for sale (or that form part of a disposal group classified as held
for sale) are not depreciated or amortised.
Share based payments
The Group operates a number of equity-settled share based
compensation plans, under which the entity receives services
from employees as consideration for equity instruments (for
example options or shares) of Ibstock Plc. The fair value of
the employee services received in exchange for the grant of
the equity instruments is recognised as an expense. The total
amount to be expensed is determined by reference to the fair
value of the instruments granted:
1 Alternative performance measures are described in Note 3 and exceptional
items are described in Note 5 to the consolidated financial statements.
• including any market performance conditions (for example,
the Group’s share price);
• excluding the impact of any service and non-market
performance vesting conditions (for example, profitability,
sales growth targets and remaining an employee of the
entity over a specified time period); and
• including the impact of any non-vesting conditions (for example,
the requirement for employees to save or hold shares for a
specific period of time).
At the end of each reporting period, the Group revises its estimates
of the number of instruments that are expected to vest based on
the non-market vesting conditions and service conditions. It recognises
the impact of the revision to original estimates, if any, in the income
statement, with a corresponding adjustment to equity. In addition,
in some circumstances employees may provide services in advance
of the grant date and therefore the grant date fair value is estimated
for the purposes of recognising the expense during the year between
service commencement period and grant date. For the equity-
settled share based payment transactions, the fair value of the
share instruments granted is derived from established option
pricing models. Further details on share based payments are
set out in Note 25.
2. Critical accounting judgements and key sources
of estimation uncertainty
In applying the Group’s accounting policies, as described in Note 1,
the Directors are required to make judgements (other than those
involving estimations) that have a significant impact on the
amounts recognised and to make estimates and assumptions
that affect the reported amounts of assets, liabilities, income and
expenses. Due to the inherent uncertainty in making these critical
judgements and estimates, actual outcomes could be different.
Critical judgements in applying the Group’s accounting policies
The following critical judgement, that the Directors made in the
process of applying the Group’s accounting policies, has the most
significant effect on the amounts recorded in the financial statements.
Exceptional items1
Exceptional items1 are disclosed separately in the financial
statements where the Directors believe it is necessary to do so
to provide further understanding of the financial performance
of the Group. The Group presents as exceptional items1 in Note 5
those items of income and expense which, because of the materiality,
nature and/or expected infrequency of the events giving rise to
them, merit separate presentation to allow shareholders to
understand elements of financial performance in the financial
period, so as to facilitate comparison with future years and further
assess underlying trends in financial performance. Judgement is
required in relation to significant material transactions as to
whether they are exceptional in nature.
Further details on exceptional items1 are given within Note 5.
143
Ibstock Plc | Annual Report and Accounts 2023Additional informationGovernanceStrategic ReportFinancial Statements Notes to the consolidated financial statements continued
2. Critical accounting judgements and key sources
of estimation uncertainty continued
Key sources of estimation uncertainty
Estimates and underlying assumptions are reviewed by management
on an ongoing basis, with revisions recognised in the period in
which the estimates are revised, and in any future period affected.
The areas that may have a significant risk of resulting in a material
adjustment to the carrying amounts of assets and liabilities within
the next financial year are as follows:
Defined benefit pension schemes – valuation of liabilities
For defined benefit schemes, management is required to make
annual estimates and assumptions about future changes in
discount rates, inflation, the rate of increase in pensions in
payment and life expectancy.
The assumptions used may vary from year to year, which would
affect future net income and net assets. Any differences between
these assumptions and the actual outcome also affect future net
income and net assets. In making these estimates and assumptions,
management considers advice provided by external advisors, such
as actuaries. These assumptions are subject to periodic review.
Note 20 describes the assumptions used together with an
analysis of the sensitivity of the defined benefit scheme
liability (£363.9 million at 31 December 2023) to changes
in key assumptions.
Impairment of Non-current assets
Assessing the Group’s property, plant and equipment and right of
use assets for impairment requires estimation of the present value
of future cash flows. The calculations require the Group to estimate
the future cash flows expected to arise from Cash Generating Units
(CGUs). The key assumption in this regard relates to long-term
industry demand for the Group’s products.
Note 16 describes the other assumptions used together with
an analysis of the sensitivity of the impairment assessment
to changes in the key assumption.
3. Alternative performance measures
Alternative performance measures (APMs) are disclosed within
the consolidated financial statements where management
believes it is necessary to do so to provide further understanding
of the financial performance of the Group.
Management uses APMs in its own assessment of the Group’s
performance and in order to plan the allocation of internal capital
and resources. Certain APMs are used in the remuneration of
management and Executive Directors, as set out in the Directors’
Remuneration Report on pages 99 to 116.
APMs serve as supplementary information for users of the financial
statements and it is not intended that they are a substitute for,
or superior to, statutory measures. None of the APMs are outlined
within IFRS and they may not be comparable with similarly titled
APMs used by other companies.
Within the notes to the consolidated financial statements,
all APMs are identified with a superscript.
Exceptional items
The Group presents as exceptional those items of income
and expense which, because of their materiality, nature and/or
expected infrequency of the events giving rise to them, merit
separate presentation to allow users of the financial statements
to understand further elements of financial performance in the
year. This facilitates comparison with future periods and to assess
trends in financial performance over time.
Details of all exceptional items are disclosed in Note 5.
Adjusted EBITDA and Adjusted EBITDA margin
Adjusted EBITDA is the earnings before interest, taxation,
depreciation and amortisation adjusted for exceptional items.
Adjusted EBITDA margin is Adjusted EBITDA shown as a
proportion of revenue.
The Directors regularly use Adjusted EBITDA and Adjusted EBITDA
margin as key performance measures in assessing the Group’s
profitability. The measures are considered useful to users of the
financial statements as they represent common APMs used by
investors in assessing a company’s operating performance, when
comparing its performance across periods as well as being used
in the determination of Directors’ variable remuneration.
A full reconciliation of Adjusted EBITDA is included at the
foot of the Group’s Consolidated income statement within
the consolidated financial statements. Adjusted EBITDA
margin is included within Note 4.
Adjusted EPS
Adjusted EPS is the basic earnings per share adjusted for
exceptional items, fair value adjustments being the amortisation
and depreciation on fair value uplifted assets and non-cash
interest, net of associated taxation on the adjusted items.
The Directors have presented Adjusted EPS as they believe the
APM represents useful information to the user of the financial
statements in assessing the performance of the Group, when
comparing its performance across periods, as well as being used
within the determination of Directors’ variable remuneration.
Additionally, the APM is considered by the Board when determining
the proposed level of ordinary dividend.
A full reconciliation is provided in Note 11.
Net debt and Net debt to adjusted EBITDA (“leverage”) ratio
Net debt is defined as the sum of cash and cash equivalents less
total borrowings at the balance sheet date. This does not include
lease liabilities arising upon application of IFRS 16 in order to align
with the Group’s banking facility covenant definition.
The Net debt to adjusted EBITDA ratio definition removes the
operating lease expense benefit generated from IFRS16 compared
to IAS 17 within adjusted EBITDA.
The Directors disclose these APMs to provide information as a
useful measure for assessing the Group’s overall level of financial
indebtedness and when comparing its performance and position
across periods.
Net debt is shown at the foot of the Group consolidated cash flow
statement on page 135.
144
Ibstock Plc | Annual Report and Accounts 2023 A full reconciliation of the net debt to adjusted EBITDA ratio (also referred to as ‘leverage’) is set out below:
Net debt
Adjusted EBITDA
Impact of IFRS 16 (Note 26)
Adjusted EBITDA prior to IFRS 16
Ratio of net debt to adjusted EBITDA
Year ended
31 December
2023
£’000
(100,616)
Year ended
31 December
2022
£’000
(45,922)
107,357
(12,134)
95,223
139,667
(8,491)
131,176
1.1x
0.4x
Adjusted return on capital employed
Adjusted return on capital employed (Adjusted ROCE) is defined as earnings before interest and taxation adjusted for exceptional items
as a proportion of the average capital employed (defined as net debt plus equity excluding the pension surplus). The average is calculated
using the period end balance and corresponding preceding reported period end balance (year end or interim).
The Directors disclose the Adjusted ROCE APM in order to provide users of the financial statements with an indication of the relative
efficiency of capital use by the Group over the period, assessing performance between periods as well as being used within the
determination of executives’ variable remuneration.
The calculation of Adjusted ROCE is set out below:
Adjusted EBITDA
Less depreciation
Less amortisation
Adjusted earnings before interest and taxation
Average net debt
Average equity
Average pension
Average capital employed
Adjusted Return on Capital Employed
Average capital employed figures comprise:
Net debt
Equity
Pension
Capital employed
Year ended
31 December
2023
£’000
107,357
(34,626)
(6,938)
65,793
94,863
407,061
(10,160)
491,764
13.4%
Year ended
31 December
2022
£’000
139,667
(31,579)
(6,939)
101,149
40,791
426,501
(35,707)
431,585
23.4%
31 December
2023
£’000
100,616
399,867
(9,832)
490,651
30 June
2023
£’000
89,110
414,254
(10,488)
492,876
31 December
2022
£’000
45,922
416,209
(15,194)
446,937
30 June
2022
£’000
35,660
436,792
(56,219)
416,233
Adjusted effective tax rate (ETR)
The Group presents an adjusted effective tax rate (Adjusted ETR) within its Financial Review. This is disclosed in order to provide users
of the financial statements with a view of the rate of taxation borne by the Group adjusted for exceptional items, fair value adjustments
being the amortisation and depreciation on fair value uplifted assets, non-cash interest and changes in taxation rates on deferred
taxation. A reconciliation of the adjusted ETR to the statutory UK rate of taxation is included in Note 10.
145
Ibstock Plc | Annual Report and Accounts 2023Additional informationGovernanceStrategic ReportFinancial Statements Notes to the consolidated financial statements continued
3. Alternative performance measures continued
Cash flow related APMs
The Group presents an adjusted cash flow statement within its Financial Review on page 36. This is disclosed in order to provide
users of the financial statements with a view of the Group’s operating cash generation before the impact of cash flows associated
with exceptional items (as set out in Note 5) and with the inclusion of interest, lease payment and non-exceptional property disposal
related cash flows.
The Directors use this APM table to allow shareholders to further understand the Group’s cash flow performance in the period,
to facilitate comparison with future years and to assess trends in financial performance. This table contains a number of APMs,
as described below and reconciled in the following table:
Adjusted change in working capital
Adjusted change in working capital represents the statutory change in working capital less cash outflows associated with
exceptional items arising in the year of £5.4 million (2022: adding back cash inflows of £0.3 million).
Adjusted operating cash flow
Adjusted operating cash flows are the cash flows arising from operating activities adjusted to exclude cash outflows relating
to exceptional items of £4.6 million (2022: cash inflows £7.3 million) and inclusion of cash flows associated with interest income,
proceeds from the sale of property, plant and equipment and lease payments reclassified from investing or financing activities
of £12.8 million (2022: £6.8 million).
Cash conversion
Cash conversion is the ratio of Adjusted operating cash flow (defined above) to Adjusted EBITDA (defined above). The Directors
believe this APM provides a useful measure of the Group’s efficiency of its cash management during the period.
Adjusted free cash flow
Adjusted free cash flow represents Adjusted operating cash flow (defined above) less total capital expenditure. The Directors use the
measure of Adjusted free cash flow as a measure of the funds available to the Group for the payment of distributions to shareholders,
for use within M&A activity and other investing and financing activities.
Reconciliation of statutory cash flow statement to adjusted cash flow statement
Year ended 31 December 2023
Adjusted EBITDA
Change in working capital
Impairment charges
Net interest
Tax
Post-employment benefits
Other
Adjusted operating cash flow
Cash conversion
Total capex
Adjusted free cash flow
Year ended 31 December 2022
Adjusted EBITDA
Change in working capital
Impairment charges
Net interest
Tax
Post-employment benefits
Other
Adjusted operating cash flow
Cash conversion
Total capex
Adjusted free cash flow
146
Statutory
£’000
76,595
(31,636)
20,599
(6,035)
630
790
(2,692)
58,251
(65,653)
(7,402)
Statutory
£’000
146,115
(2,035)
382
(4,162)
(11,699)
(973)
(5,554)
122,074
Exceptional
£’000
Reclassification
£’000
30,762
(5,355)
(20,599)
–
–
–
(177)
4,631
–
–
–
257
–
(1,081)
(12,012)
(12,836)
–
4,631
–
(12,836)
Exceptional
£’000
(6,448)
267
(382)
–
–
–
(705)
(7,268)
Reclassification
£’000
–
–
–
(135)
–
(777)
(5,882)
(6,794)
(58,354)
63,720
–
(7,268)
–
(6,794)
Adjusted
£’000
107,357
(36,991)
–
(5,778)
630
(291)
(14,881)
50,046
47%
(65,653)
(15,607)
Adjusted
£’000
139,667
(1,768)
–
(4,297)
(11,699)
(1,750)
(12,141)
108,012
77%
(58,354)
49,658
Ibstock Plc | Annual Report and Accounts 2023 4. Segment reporting
The Directors consider the Group’s reportable segments to be Clay and Concrete.
The key Group performance measure is adjusted EBITDA1, as detailed below, which is defined in Note 3. The tables below present
revenue and adjusted EBITDA1 and profit before taxation for the Group’s operating segments.
Included within the unallocated and elimination columns in the tables below are costs including share based payments and Group
employment costs. Unallocated assets and liabilities are pensions, taxation and certain centrally held provisions. Eliminations represent the
removal of inter-company balances. Transactions between segments are carried out at arm’s length. There is no material inter-segmental
revenue and no aggregation of segments has been applied.
For both years presented, the activities of Ibstock Futures were managed and reported as part of the Clay division. Consequently,
the position and performance of Ibstock Futures for all periods has been classified within the Clay reportable segment.
Bricks and masonry
Roofing
Fencing and landscaping
Flooring and lintels
Facades
Rail and infrastructure
Other
Total revenue
Adjusted EBITDA1
Adjusted EBITDA margin1
Exceptional items1 impacting operating profit (see Note 5)
Depreciation and amortisation pre fair value uplift
Incremental depreciation and amortisation following fair value uplift
Net finance costs
Profit before tax
Taxation
Profit for the year
Year ended 31 December 2023
Concrete
£’000
19,848
21,323
20,440
35,704
–
16,218
86
113,619
18,623
16.4%
(2,404)
(5,733)
(4,876)
(569)
5,041
Unallocated and
elimination
£’000
–
–
–
–
–
–
–
–
(10,113)
(188)
(175)
–
(2,380)
(12,856)
Clay
£’000
282,260
–
–
–
9,960
–
–
292,220
98,847
33.8%
(28,170)
(23,406)
(7,374)
(2,015)
37,882
Total
£’000
302,108
21,323
20,440
35,704
9,960
16,218
86
405,839
107,357
26.5%
(30,762)
(29,314)
(12,250)
(4,964)
30,067
(9,007)
21,060
Consolidated total assets
610,867
133,502
9,862
754,231
Consolidated total liabilities
(174,062)
(46,127)
(134,175)
(354,364)
Non-current assets
Consolidated total intangible assets
Property, plant and equipment
Right-of-use assets
Total non-current assets
56,178
25,839
389,165
51,235
–
–
82,017
440,400
29,915
9,310
606
39,831
475,258
86,384
606
562,248
Total non-current asset additions
62,837
6,654
–
69,491
Included within revenue for the year ended 31 December 2023 were £1.1 million of bill and hold transactions in the Clay division.
At 31 December 2023, £1.1 million of inventory relating to these bill and hold transactions remained on the Clay division’s premises
as well as £0.1 million of inventory related to bill and hold sales in previous years remained on the Concrete division’s premises.
1 Alternative performance measures are described in Note 3 and exceptional items are described in Note 5 to the consolidated financial statements.
147
Ibstock Plc | Annual Report and Accounts 2023Additional informationGovernanceStrategic ReportFinancial Statements Notes to the consolidated financial statements continued
4. Segment reporting continued
The unallocated segment balance includes the fair value of the Group’s share based payments and associated taxes (£2.5 million),
Plc Board and other plc employment costs (£5.4 million), pension costs (£1.1 million) and legal/administrative expenses (£3.5 million).
These costs have been offset by research and development taxation credits (£2.4 million). During the current period, one customer
accounted for greater than 10% of Group revenues with £70.6 million of sales across the Clay and Concrete divisions.
The Group pension surplus is an unallocated asset and amounts to £9.8 million.
Bricks and masonry
Roofing
Fencing and landscaping
Flooring and lintels
Facades
Rail and infrastructure
Other
Total revenue
Adjusted EBITDA1
Adjusted EBITDA margin1
Exceptional items1 impacting operating profit (see Note 5)
Depreciation and amortisation pre fair value uplift
Incremental depreciation and amortisation following fair value uplift
Net finance costs
Profit/(loss) before tax
Taxation
Profit for the year
Consolidated total assets
Consolidated total liabilities
Non-current assets
Consolidated total intangible assets
Property, plant and equipment
Right-of-use assets
Total non-current assets
Year ended 31 December 2022
Concrete
£’000
22,900
32,100
29,000
45,200
–
14,200
293
143,693
23,604
16.4%
56
(5,546)
(5,190)
(430)
12,494
Unallocated and
elimination
£’000
–
–
–
–
–
–
–
–
(10,624)
–
(187)
–
(1,867)
(12,678)
Clay
£’000
365,022
–
–
–
4,171
–
–
369,193
126,687
34.3%
6,222
(20,659)
(6,936)
(366)
104,948
Total
£’000
387,922
32,100
29,000
45,200
4,171
14,200
293
512,886
139,667
27.2%
6,278
(26,392)
(12,126)
(2,663)
104,764
(17,884)
86,880
596,769
146,553
19,460
762,782
(183,079)
(52,172)
(111,322)
(346,573)
60,945
29,297
361,389
47,702
–
–
90,242
409,091
20,869
10,419
190
31,478
443,203
87,418
190
530,811
Total non-current asset additions
70,118
8,713
131
78,962
1 Alternative performance measures are described in Note 3 and exceptional items are described in Note 5 to the consolidated financial statements.
Included within the revenue of our Concrete operations during the year ended 31 December 2022 were £0.1 million of bill and hold
transactions. At 31 December 2022, £0.4 million of inventory relating to bill and hold sales in previous years remained on the Group’s
premises. The unallocated segment balance includes the fair value of the Group’s share based payments and associated taxes of
(£2.7 million), Plc Board and other Plc employment costs (£6.4 million), pension costs (£0.8 million) and legal/administrative expenses
(£2.8 million). These costs have been offset by research and development taxation credits (£1.6 million) and £0.5 million of provision
releases related to the discount rate applied. During the current year, one customer accounted for greater than 10% of Group revenues
with £80.6 million of sales within the Clay and Concrete division.
The Group pension surplus is an unallocated asset and amounted to £15.2 million.
148
Ibstock Plc | Annual Report and Accounts 2023 5. Exceptional items1
Exceptional cost of sales
Impairment charge – Property, plant and equipment
Impairment charge – Right-of-use assets
Impairment charge – Working capital
Total impairment charge (Note 16)
Redundancy costs
Other costs associated with closure of sites
Total exceptional cost of sales
Exceptional administrative expenses:
Redundancy costs
Total exceptional administrative expenses
Exceptional profit on disposal of property, plant and equipment
Exceptional items1 impacting operating profit
Year ended 31
December 2023
£’000
Year ended 31
December 2022
£’000
(15,397)
(1,181)
(4,022)
(20,600)
(7,470)
(1,196)
(29,266)
(1,496)
(1,496)
–
(30,762)
(554)
–
–
(554)
–
(126)
(680)
–
–
6,958
6,278
Total exceptional items1
(30,762)
6,278
2023
Included within the current year are the following exceptional items1:
Exceptional cost of sales
Impairment charges arising in the current year relate to the impairment of non-current assets and working capital items, as set out
in Note 16. Due to the materiality and non-recurring nature, these costs have been categorised as exceptional.
Redundancy costs relate to the severance for employees engaged in production activities following the Group’s announced restructuring
activity in response to the deterioration in demand outlook caused by a market downturn. These costs have been categorised as exceptional
due to their materiality, and unusual and non-recurring nature of the events giving rise to the costs.
Costs associated with the closure of sites relate to other costs incurred as a result of the Group’s restructuring decisions during the year.
These unavoidable costs include closed site security and decommissioning activities.
Exceptional administration expenses
Exceptional redundancy costs arising in the current period relate to costs of redundancy of employees within the Group’s selling, general
and administrative (“SG&A”) functions following the Group’s announced restructuring in October 2023. The costs have been treated
as exceptional due to their materiality, and the non-recurring nature of the event giving rise to the costs.
2022
Exceptional cost of sales
The Group impaired the existing building assets has been identified as unfit for usage, thereby requiring replacement at Atlas, which
was part of a restructuring programme.
Other costs associated with the closure of sites represent other expenses incurred as a result of the Group’s restructuring programme
announced during 2020. This programme proceeded throughout 2021 and the costs concluded during the first half of 2022.
As anticipated, during 2022, the Group incurred £0.1 million of net residual costs relating to the sites subject to closure. The net balance
in the current year comprised rates and other standing charges related to the former operations, partly offset by savings from previously
provided redundancy schemes.
Exceptional profit on disposal of property, plant and equipment
The exceptional profit on disposal in the prior year relates to the sale of the Group’s surplus property at West Hoathly in Sussex. The profit
on disposal has been categorised as exceptional due to the materiality of the amount recognised.
Cash flow on exceptional items1
2023
Exceptional cash cost of £10.2 million associated with the Group’s rationalisation and closure of sites as part of the restructuring plan,
of which £4.6 million was cash settled in the year as detailed in Note 3. The exceptional non-cash charge of £20.6 million comprising
the impairments associated with the Group’s closure of sites as part of this plan as detailed in Note 11.
1 Alternative performance measures are described in Note 3 and exceptional items are described in Note 5 to the consolidated financial statements.
149
Ibstock Plc | Annual Report and Accounts 2023Additional informationGovernanceStrategic ReportFinancial Statements Notes to the consolidated financial statements continued
5. Exceptional items continued
2022
Exceptional cash impact comprising cash inflow of £7.8 million associated with total consideration from the sales of land and buildings
and cash outflow of £0.1 million associated with the restructuring programme. The exceptional non-cash charge of £0.6 million
comprising the impairments associated the property, plant and equipment.
Tax on exceptional items1
2023
In the current year, impairment charges arising on non-current assets are not tax deductible but give rise to a deferred tax credit in the
period. The impairment charge on current assets and redundancy costs are treated as tax deductible in the period. The total tax credit
on exceptional items is £7.0 million.
2022
In the prior year, the impairment charge relating to property, plant and equipment is not tax deductible but gives rise to a deferred tax
credit in the current period.
The costs associated with the closure of sites are tax deductible in the current period.
The profit on disposal of property, plant and equipment gave rise to a nil chargeable gain in the current period due to the effect
of indexation allowance.
6. Operating profit
Operating profit includes the effect of crediting/(charging):
Changes in inventories of finished goods and work in progress
Raw material and consumables used
Employee benefit expense (Note 7)
Depreciation – Property, plant and equipment (Note 13)
Depreciation – Right-of-use assets (Note 26)
Amortisation (Note 12)
Exceptional cost of sales (Note 5)
Other production costs
Total cost of sales
Transportation expenses
Other employee benefit expenses (Note 7)
Profit/(loss) on disposal of property, plant and equipment (Note 13)
Advertising costs
Operating lease income
Exceptional administrative expenses (Note 5)
Exceptional profit on disposal of property, plant and equipment (Note 5 and 13)
Auditor’s remuneration
During the year the Group obtained the following services from the Company’s auditor.
Fees payable to the Company's auditor and its associates for the
audit of Parent Company and consolidated financial statements:
Fees payable to Company's auditor and its associates for other services to the Group:
– Audit of the Company's subsidiaries
Total audit fees
– Audit related assurance services
Total non-audit fees
150
Year ended
31 December
2023
£’000
23,330
(65,904)
(85,234)
(22,848)
(11,778)
(6,938)
(29,266)
(92,245)
(290,883)
(36,797)
(31,831)
1,957
(1,123)
136
(1,496)
–
Year ended
31 December
2022
£’000
11,923
(86,823)
(92,998)
(23,841)
(7,738)
(6,939)
(680)
(109,425)
(316,521)
(47,961)
(32,441)
(417)
(1,192)
97
–
6,958
Year ended
31 December
2023
£’000
Year ended
31 December
2022
£’000
306
180
582
888
80
80
608
788
80
80
Ibstock Plc | Annual Report and Accounts 2023 7. Employees and Directors
Employee benefit expenses for the Group during the period:
Wages and salaries – gross
Social security costs
Pensions costs – defined benefit plans (Note 20)
Pensions costs – defined contribution plans (Note 20)
Share based payments (Note 25)
Year ended
31 December
2023
£’000
98,954
9,503
1,082
5,218
2,308
117,065
Year ended
31 December
2022
£’000
107,622
9,743
777
4,750
2,547
125,439
In October 2022, the Group made a one-off payment of £3.6 million to those employees who were the most heavily impacted by the cost
of living crisis.
Average monthly number of people (including Executive Directors) employed:
Sales staff
Administrative staff
Production staff
Key management compensation:
Short-term employee benefits
Post-employment benefits
Share-based payment
Year ended
31 December
2023
241
176
1,772
2,189
Year ended
31 December
2023
£’000
2,156
154
464
2,774
Year ended
31 December
2022
263
220
1,782
2,265
Year ended
31 December
2022
£’000
3,582
229
1,048
4,859
Key management personnel has been defined as the Board of Ibstock Plc, together with the Group’s Executive Leadership Team (ELT).
Members of the ELT are set out on page 76 of the Annual Report and Accounts 2023. Details of remuneration for Ibstock Plc Directors,
including the highest paid director, are presented in the Remuneration Report on pages 99 to 116. The aggregate remuneration of the
Directors for the purposes of the financial statements is £2.2 million (year ended 31 December 2022: £2.7 million).
151
Ibstock Plc | Annual Report and Accounts 2023Additional informationGovernanceStrategic ReportFinancial Statements Notes to the consolidated financial statements continued
8. Finance costs
Interest costs:
Interest payable on Revolving Credit Facility
Interest payable on Private Placement
Total interest payable on bank borrowings
Capitalised interest
Other interest payable
Interest expense on financial liabilities at amortised cost
Interest on lease liabilities (Note 26)
Net unwinding of discount on provisions/change in discount rate (Note 19)
Other interest payable
Total finance costs
Year ended
31 December
2023
£’000
Year ended
31 December
2022
£’000
(1,891)
(2,220)
(4,111)
1,082
(65)
(3,094)
(2,368)
(470)
(2,838)
(5,932)
(993)
(2,220)
(3,213)
–
(66)
(3,279)
(1,274)
–
(1,274)
(4,553)
2023
In the current year, £30.0 million of Revolving Credit Facility (“RCF”) was drawn, with £5.0 million subsequently repaid. Interest expense
comprised £0.7 million interest on funds drawn down, £0.6 million of facility commitment fees, £0.2 million of other arrangement costs
and £0.4 million of deal fee amortisation.
In the current year, £1.1 million of borrowing costs are directly attributable to the construction or production of qualifying assets,
therefore, are capitalised in the relevant assets. The average capitalisation rate was 2.6%.
2022
In the prior year, the RCF was not drawn upon and therefore interest expense comprised no interest on funds drawn down, £0.6 million
of facility commitment fees and £0.4 million of deal fee amortisation. During the final quarter of 2022, the Group concluded a 12-month
extension to the £125 million RCF, extending maturity to November 2026 on terms aligning with the original refinancing in November
2021. Fees of £0.3m related to the extension were capitalised.
In prior years, no borrowing costs were directly attributable to the construction or production of qualifying assets.
9. Finance income
Interest income:
Foreign exchange translations
Net interest income arising on the UK pension scheme (Note 20)
Net unwinding of discount on provisions/change in discount rate
Other interest receivable
Total finance income relating to continuing operations
10. Taxation
Analysis of income tax charge
Current tax on profit for the year
Adjustments in respect of prior period
Total current tax
Deferred tax on profit for the year
Impact of change in tax rate
Adjustments in respect of prior period
Total deferred tax
152
Year ended
31 December
2023
£’000
Year ended
31 December
2022
£’000
–
711
–
257
968
29
1,048
689
124
1,890
Year ended
31 December
2023
£’000
2,120
85
2,205
5,830
862
110
6,802
9,007
Year ended
31 December
2022
£’000
13,747
1,340
15,087
3,700
2,095
(2,998)
2,797
17,884
Ibstock Plc | Annual Report and Accounts 2023 Income tax recognised within the consolidated statement of other comprehensive income
Tax adjustments arising on the UK pension scheme assets and liabilities:
Current tax credit
Deferred tax credit
Tax adjustments arising on gains and losses relating to cash flow hedges:
Deferred tax (credit)/charge
Income tax recognised within the consolidated statement of changes in equity
Current tax credit on share-based payments
Deferred tax charge/(credit) on share-based payments
Year ended
31 December
2023
£’000
Year ended
31 December
2022
£’000
–
(1,320)
(333)
(10,814)
(148)
149
Year ended
31 December
2023
£’000
–
147
Year ended
31 December
2022
£’000
(1)
(116)
The tax expense for the period differs from the applicable standard rate of corporation tax in the UK of 23.5% for the year ended
31 December 2023 (2022: 19%). The differences are explained below:
Year ended 31 December 2023
Profit before tax
Profit before tax multiplied by the rate of corporation tax in the UK
Effects of:
Expenses not deductible
Permanent benefit of super deduction on capital expenditure
Changes in estimates relating to prior periods
Rate change on deferred tax provision
Total taxation expense from continuing operations
Year ended 31 December 2022
Profit before tax
Profit before tax multiplied by the rate of corporation tax in the UK
Effects of:
Expenses not deductible
Permanent benefit of super deduction on capital expenditure
Changes in estimates relating to prior periods
Rate change on deferred tax provision
Total taxation expense from continuing operations
Statutory
£’000
30,067
7,067
Percentage
100%
23.50%
Exceptional and
other adjusting
items
£’000
42,186
9,913
Percentage
100%
23.50%
1,175
(292)
195
862
9,007
3.91%
(0.97%)
0.65%
2.87%
29.95%
(278)
–
–
(862)
8,773
(0.66%)
–
–
(2.04%)
20.80%
Adjusted
£’000
72,253
16,980
897
(292)
195
–
17,780
Percentage
100%
23.50%
1.24%
(0.40%)
0.27%
–
24.61%
Statutory
£’000
104,764
19,905
Percentage
100%
19.00%
Exceptional and
other adjusting
items
£’000
4,473
850
Percentage
Adjusted
£’000
100% 109,237
19.00% 20,755
Percentage
100%
19.00%
(717)
(1,741)
(1,658)
2,095
17,884
(0.68%)
(1.66%)
(1.58%)
2.00%
17.08%
1,390
–
–
(2,095)
145
31.08%
–
–
(46.84%)
673
(1,741)
(1,658)
–
3.24% 18,029
0.61%
(1.59%)
(1.52%)
–
16.50%
There are no income tax consequences for the Company in respect of dividends declared prior to the date of authorisation of these
financial statements and for which a liability has not been recognised.
In the current period, the permanent benefit of the temporary enhancement to tax relief on capital expenditure on plant and machinery,
known as the “super-deduction” was £0.3 million. This benefit is offset by an increase in the associated deferred tax liability of £0.1 million
being recognised at 25%, being the tax rate at which it is expected to unwind. The overall net tax benefit of the super-deduction for
the current period is £0.2 million.
The £0.8 million rate change on deferred tax provision is a result of recognising deferred tax assets and liabilities at the future tax
rate of 25% in respect of items that are taxable or tax-deductible in the current period. £0.1 million of this balance relates to capital
expenditure that has attracted the super-deduction as mentioned above.
153
Ibstock Plc | Annual Report and Accounts 2023Additional informationGovernanceStrategic ReportFinancial Statements
Notes to the consolidated financial statements continued
10. Taxation continued
The Group expects its effective tax rate in the future to be affected by the outcome of any future tax audits as well as the impact
of changes in tax law.
The government published draft legislation for inclusion in Finance Bill 2024 which amends certain aspects of the multinational top-up
tax and domestic top-up tax rules contained in Finance (No 2) Act 2023. The amendments will have retrospective effect for accounting
periods beginning on or after 31 December 2023. The group is below the €750m income threshold and therefore the rules will not impact
the tax liabilities reported by the group.
11. Earnings per share
The basic earnings per share figures are calculated by dividing profit for the year attributable to the Parent shareholders by the weighted
average number of Ordinary Shares in issue during the year. The diluted earnings per share figures allow for the dilutive effect of the
conversion into Ordinary Shares of the weighted average number of options outstanding during the year. Where the average share
price for the year is lower than the option price the options become anti-dilutive and are excluded from the calculation.
The number of shares used for the earnings per share calculation are as follows:
Basic weighted average number of Ordinary Shares
Effect of share incentive awards and options
Diluted weighted average number of Ordinary Shares
Year ended
31 December
2023
392,217
3,437
395,654
Year ended
31 December
2022
402,746
2,010
404,756
The calculation of adjusted earnings per share1 is a key measurement used by management that is not defined by IFRS. The adjusted
earnings per share1 measures should not be viewed in isolation, but rather treated as supplementary information.
Adjusted earnings per share1 figures are calculated as the Basic earnings per share adjusted for exceptional items1, fair value adjustments
being the amortisation and depreciation on fair value uplifted assets and non-cash interest expenses. Adjustments are made net of the
associated taxation on the adjusted items. A reconciliation of the statutory profit to that used in the adjusted earnings per share1
calculations is as follows:
Profit for the period attributable to the Parent shareholders
Add back exceptional items1 (Note 5)
Less tax credit on exceptional items1
Add fair value adjustments (Note 4)
Less tax credit on fair value adjustments
Less net non-cash interest
Add back tax expense on non-cash interest
Add back impact of deferred taxation rate change
Adjusted profit for the period attributable to the Parent shareholders
Basic EPS on profit for the year
Diluted EPS on profit for the year
Adjusted basic EPS1 on profit for the year
Adjusted diluted EPS1 on profit for the year
Year ended
31 December
2023
Total
£’000
21,060
30,762
(6,952)
12,250
(2,878)
(826)
194
844
54,454
Year ended
31 December
2023
Total
pence
5.4
5.3
13.9
13.8
Year ended
31 December
2022
Total
£’000
86,908
(6,278)
(453)
12,126
(2,000)
(1,376)
227
2,095
91,249
Year ended
31 December
2022
Total
pence
21.6
21.5
22.7
22.5
1 Alternative performance measures are described in Note 3 and exceptional items are described in Note 5 to the consolidated financial statements.
154
Ibstock Plc | Annual Report and Accounts 2023 12. Intangible assets
Cost
At 1 January 2022
Additions in the year
Utilised in the year
At 31 December 2022
Additions in the year
Utilised in the year
At 31 December 2023
Accumulated amortisation and impairment
At 1 January 2022
Charge for the year
At 31 December 2022
Charge for the year
At 31 December 2023
Net book amount
At 31 December 2022
At 31 December 2023
Customer
contracts and
relationships
£’000
92,868
–
–
92,868
579
–
93,447
(38,154)
(5,883)
(44,037)
(5,882)
(49,919)
Goodwill
£’000
2,964
888
–
3,852
209
–
4,061
–
–
–
–
–
Brands
£’000
Licences
£’000
Total
£’000
37,159
–
–
37,159
–
–
37,159
(6,614)
(1,056)
(7,670)
(1,056)
(8,726)
6,402
5,573
(3,905)
8,070
1,844
(3,919)
5,995
–
–
–
–
–
139,393
6,461
(3,905)
141,949
2,632
(3,919)
140,662
(44,768)
(6,939)
(51,707)
(6,938)
(58,645)
3,852
4,061
48,831
43,528
29,489
28,433
8,070
5,995
90,242
82,017
Management performed a goodwill impairment test in both the current and prior year, with no goodwill impairment recognised
(see Note 16).
The Group has been part of the UK ETS scheme since 01 January 2021. Licences represent carbon allowances purchased by the Group,
which are held at cost and surrendered, as required, to meet carbon emissions in excess of the Group’s granted allowances. During the
current year, the Group received 218,561 (2022: 223,034) free allowances from the Government at no cost.
Amortisation is included within cost of sales in the income statement.
The remaining amortisation period of customer contracts and relationships is two to twelve years. At 31 December 2023, the remaining
amortisation period of brands is outlined below:
Brands
Ibstock Brick
Forticrete
Supreme
Longley
Net book value
at 31 December
2023
£’000
Remaining
amortisation
period (years)
26,348
93
1,233
759
28,433
41.2
1.2
6.2
5.6
155
Ibstock Plc | Annual Report and Accounts 2023Additional informationGovernanceStrategic ReportFinancial Statements Notes to the consolidated financial statements continued
13. Property, plant and equipment
Cost
At 1 January 2022
Additions
Transfer from AICC
Disposals
At 31 December 2022
Additions
Acquisitions on business combination
Transfer from AICC
Disposals
At 31 December 2023
Accumulated depreciation and impairment
At 1 January 2022
Charge for the year
Disposals
Impairment
At 31 December 2022
Charge for the year
Disposals
Impairment
At 31 December 2023
Net book amount
At 31 December 2022
At 31 December 2023
Land and
buildings
£’000
Mineral
reserves
£’000
Plant, machinery
and equipment
£’000
193,726
3,308
103
(275)
196,862
1,751
2,000
5,222
(1,520)
204,315
(42,975)
(6,855)
264
(554)
(50,120)
(2,123)
1,392
(1,266)
(52,117)
75,034
–
–
–
75,034
179
–
2,606
(14,626)
63,193
(26,112)
(3,073)
–
–
(29,185)
(3,293)
15,007
(2,391)
(19,862)
202,834
11,967
991
(8,515)
207,277
4,721
707
15,698
(10,720)
217,683
(43,464)
(13,913)
8,059
–
(49,318)
(17,432)
10,349
(11,387)
(67,788)
Assets in the
course of
construction
(AICC)
£’000
16,757
42,878
(1,094)
–
58,541
60,314
–
(23,526)
–
95,329
–
–
–
–
–
–
–
(353)
(353)
Total
£’000
488,351
58,153
–
(8,790)
537,714
66,965
2,707
–
(26,866)
580,520
(112,551)
(23,841)
8,323
(554)
(128,623)
(22,848)
26,748
(15,397)
(140,120)
146,742
152,198
45,849
43,331
157,959
149,895
58,541
94,976
409,091
440,400
Management reviews business performance based on segments reported in Note 4. In the current year, impairment includes
£15.4 million relating to the Ravenhead, South Holmwood, Hampshire and Gloucester site in Clay division and Masoncrete and
Castledawson sites in Concrete division (2022: £0.6 million relating to Atlas site in Clay division) as set out in Note 5. Further tangible
asset impairment tests were conducted at the end of 2023 with no further impairment required for the rest of the assets (see Note 16).
A net profit on disposal of property, plant and equipment of £2.0 million has been recognised in the year ended 31 December 2023
(year ended 31 December 2022: profit on disposal of £6.5 million). The current year profit on disposal of property, plant and equipment
includes no exceptional profit or loss (2022: £7.0 million), as set out in Note 5.
As part of the Group’s strategic planning process, Management have considered the impact of both transitional and physical risks and
opportunities with regard to several global warming scenarios. Through its scenario analysis, management has assessed no indicators
of impairment for property, plant and equipment as a result of changes in precipitation patterns and variability in weather patterns
such as more frequent storms, cyclones and floods. We also expect any changes required due to climate change would be covered
by business-as-usual site refurbishments with no material impact to current useful economic lives or carrying values.
Management have also considered the potential future requirement to switch to alternative fuels in order to reduce the Group’s CO2
emissions. Although this is an evolving area as technology and capability advances, management’s current assumption is that existing
factories, and in particular kilns, are able to be retrofitted with no material impact to current useful economic lives or carrying values.
There are no assets which are pledged as security.
14. Inventories
Raw materials
Work in progress
Finished goods
156
31 December
2023
£’000
38,607
2,541
78,041
119,189
31 December
2022
£’000
37,370
3,777
53,128
94,275
Ibstock Plc | Annual Report and Accounts 2023 The replacement cost of inventories is not considered to be materially different from the values above. At 31 December 2023, a provision
of £3.5 million (31 December 2022: £2.2 million) was held against the inventory balance. At 31 December 2023, a further provision of
£3.0 million (31 December 2022: £nil) was held against the inventory balance relating to factory site closures.
15. Trade and other receivables
Trade receivables
Provision for impairment of receivables
Net trade receivables
Prepayments and accrued income
Other tax
Other receivables
Total trade and other receivables
31 December
2023
£’000
32,719
(965)
31,754
3,542
852
1,771
37,919
31 December
2022
£’000
59,314
(676)
58,638
5,334
577
1,386
65,935
The Directors consider that the carrying amount of trade and other receivables approximates their fair value. The Group’s assessment of
any expected credit losses is included in Note 22.
16. Impairment
In the year, in light of the decrease in activity levels across the UK construction industry, management identified indicators of potential
impairment. Subsequently recoverable amounts across the Group’s cash-generating units (CGUs) were calculated and compared with
the carrying value of the assets that were allocated to the relevant CGUs. For tangible asset impairment testing purposes, the Group
has determined that each factory is a separate Cash Generating Unit (CGU), with the exception of: Leighton Buzzard and Stretton
are considered as one roofing CGU; Bedford and Barnwell are considered as one South fencing and building CGU; and Thornley and
Northwich are considered as a North Rail CGU in Concrete Segment. These combined CGUs are newly identified CGUs in 2023 as each
individual factory was identified as separate CGU in 2022. The changes to the CGUs are due to the production and supply arrangement
made in 2023.
Following announcement of the proposed cessation of production at Ravenhead and South Holmwood, Gloucester and Hampshire in
the Clay division and Masoncrete and Castledawson in Concrete division, management performed detailed impairment testing for the
carrying value of the assets associated with these sites.
Management determined the recoverable amount of these closed factories based on the fair value less costs to disposal (“FVLCTD”).
This assessment falls within level 3 of the fair value hierarchy and was based on management’s judgement that the assets could not
be sold for any value, this being the assumption the recoverable amount is most sensitive to.
Determination of FVLCTD by management reflected full impairment of all items of plant and machinery, buildings, minerals and majority
of working capital for which management’s assessment was that no alternative use, future salvage value or disposal proceeds are expected
for the impacted assets.
However, management separately apply the requirements of IAS 36 to the land on sites owned, according to the accounting policy and
concluded that the recoverable amount for the land is expected to exceed the carrying value, and hence these assets remain unimpaired.
This assessment of impairment resulted in the recognition of an exceptional impairment charge of £20.6 million within cost of sales
within the Group’s consolidated income statement.
The impairment of assets valued at historical cost impacted the Clay and Concrete operating segment of the Group in the current period
as follows:
Cost
Buildings
Mineral reserves
Plant, machinery and equipment
Working capital
Right-of-use assets
Total
Clay
£’000
Concrete
£’000
Total
£’000
5,333
2,262
7,489
3,921
1,074
20,079
195
–
118
101
107
521
5,528
2,262
7,607
4,022
1,181
20,600
Additionally, management completed detailed impairment testing based on value-in-use (“VIU”), for the Group’s other operating CGUs
as at 31 December 2023.
157
Ibstock Plc | Annual Report and Accounts 2023Additional informationGovernanceStrategic ReportFinancial Statements Notes to the consolidated financial statements continued
16. Impairment continued
Key assumption used within the VIU calculations are noted below:
1. Management has used the latest Board approved budget and strategic planning forecasts in its estimated future cash flows, covering
the period 2024 to 2028, which includes assumptions regarding industry demand for the Group’s products. These forecasts assume a
return to normalised levels of industry demand for the Group’s products (defined as a level of demand in line with the 2022 year) over
the medium term.
Management is of the view that a downside sensitivity, evaluated as an unforeseen material reduction of greater than 10% in the
long-term industry demand for the Group’s products (against a level of demand in line with the 2022 year) could lead to a risk of
impairment of the Group’s non-current assets of between £15 million and £25 million.
The other assumptions used within the VIU calculation are noted below:
1. A pre-tax weighted average cost of capital (“WACC”) of 11%-15% was used within the VIU calculation based on an externally derived
rate and benchmarked against industry peer group companies.
2. Terminal growth rates of 2% were used reflecting long term inflationary expectations and management’s past experience and
expectations.
Management is of the view that no reasonable movement in the other assumptions of the WACC or terminal growth rate outlined would
result in impairment of the Group’s non-current assets.
The cash flows include ongoing capital expenditure required to maintain the productive capacity of the network but exclude any growth
capital initiatives not committed.
The immediately quantifiable impacts of climate change and costs expected to be incurred in connection with our climate resilient plan,
are included within the budget and strategic plan, which have been used to support the impairment reviews, with no material impact on
cash flows. We also expect any changes required due to physical risks arising from our assessment of climate change would be covered
by business-as-usual site refurbishments and phased over multiple years. Therefore, the related cash outflow would not have a material
impact in any given year. As a consequence, there has been no material impact in the forecast cash flows used for impairment testing.
As a result of the detailed impairment testing performed as at 31 December 2023, no further impairment charges were recognised.
In 2022, an impairment charge of £0.6 million was recognised, within exceptional cost of sales in relation to the Atlas site (Note 5 and 13).
The asset is held within the Clay reporting segment. The assets recoverable amount was assessed as £nil on a fair value less costs to sell
basis. This assessment falls within level 3 of the fair value hierarchy and was based on management’s judgement that the assets could
not be sold for any value, this being the assumption the recoverable amount is most sensitive to.
The Group has not recognised any other impairment charges in prior year.
In the current and prior year, the Directors assessed whether there was any indication that the impairment loss recognised in the prior
period may no longer exist or may have decreased.
The Group has not recognised any impairment reversals in the year ended 31 December 2023.
Goodwill
The Group’s goodwill balance of £4.1 million, arose on the acquisition of the Longley operations in July 2019 (£3.0 million), acquisition of
the Generix operation in July 2022 (£0.9 million) and acquisition of Coltman in November 2023 (£0.2 million). Based upon management’s
detailed testing of the recoverable value of the CGUs to which goodwill is allocated, no impairment was indicated. Key assumptions used
within the testing of goodwill for impairment are consistent with those set out above.
For the Longley CGU, a pre-tax discount rate of 12.4% has been used, together with a long-term growth rate of 2%. CGU-specific cash
flows for the detailed five-year time period used by management contain a revenue compound growth rate of 11.4%.
Based on management’s projections, no reasonably possible change in key assumptions within the VIU calculation supporting the
impairment calculation could cause the carrying value of goodwill to exceed its recoverable amount.
17. Trade and other payables
Trade payables
Deferred consideration (Note 28)
Other tax and social security payable
Energy accrual
Customer rebates payable
Accruals and other payables
158
31 December
2023
£’000
44,201
–
2,875
6,834
7,593
19,023
80,526
31 December
2022
£’000
63,169
112
7,770
6,431
14,716
27,805
120,003
Ibstock Plc | Annual Report and Accounts 2023 There are no material differences between the fair values and book values stated above. As at 31 December 2023 all items were payable
within 12 months of the balance sheet date. At 31 December 2022, deferred consideration of £0.1 million related to the consideration
payable to the vendor following the purchase of 75% of the share capital of the Generix businesses completed in July 2022. This deferred
consideration was paid in July 2023.
18. Borrowings
Current
Private placement
Revolving credit facility
Non-current
Private placement
Total borrowings
31 December
2023
£’000
31 December
2022
£’000
333
25,163
25,496
436
–
436
98,992
99,769
124,488
100,205
At current and prior year end, the Group held £100 million of private placement notes from Pricoa Private Capital, with maturities of
between 2028 and 2033 and an average total cost of funds of 2.19% (range 2.04% – 2.27%). The agreement with Pricoa also contains an
additional uncommitted shelf facility of up to $88.1 million (or equivalent in available currencies). The agreement contains debt covenant
requirements of leverage (net debt to adjusted EBITDA) and interest cover (adjusted EBITDA to net finance charges) of no more than
3 times and at least 4 times, respectively, tested semi-annually on 30 June and 31 December in respect of the preceding 12-month period.
Additionally, a £125 million RCF facility is held with a syndicate of five banks for an initial four year period ending in November 2025,
which was extended to November 2026 in the prior year. Interest is charged at a margin (depending upon the ratio of net debt to Adjusted
EBITDA) of between 160bps and 260bps above SONIA, SOFR or EURIBOR according to the currency of the borrowing. The facility also
includes an additional £50 million uncommitted accordion facility. Based on current leverage, the Group will pay interest under the RCF
initially at a margin of 160bps which is expected to increase to a margin of 180bps in the second quarter of 2024 as a result of an increase
in the Group’s leverage. This facility contains debt covenant requirements that align with those of the private placement with the same
testing frequency. As at 31 December 2023 the RCF was drawn down by £25.0 million (2022: £nil). As at the date of approval of these
financial statements, the above drawn down had increased to £48.0 million.
The carrying value of financial liabilities have been assessed as materially in line with their fair values, with the exception of £100 million
of private placement notes. The fair value of these borrowings has been assessed as £88.3 million (2022: £86.4 million).
No security is currently provided over the Group’s borrowings.
19. Provisions
Restoration (i)
Dilapidations (ii)
Restructuring (iii)
Other (iv)
Current
Non-current
31 December
2023
£’000
5,489
4,620
5,037
418
15,564
6,002
9,562
15,564
At 1 January 2023
Utilised
Charged to the income statement
Unwind of discount/change in rate
Acquired on business combination
At 31 December 2023
Restoration (i)
£’000
Dilapidations (ii)
£’000
Restructuring (iii)
£’000
Other (iv)
£’000
4,550
(136)
99
240
736
5,489
3,910
(16)
496
230
–
4,620
–
(838)
5,875
–
–
5,037
452
(147)
113
–
–
418
31 December
2022
£’000
4,550
3,910
–
452
8,912
1,613
7,299
8,912
Total
£’000
8,912
(1,137)
6,583
470
736
15,564
159
Ibstock Plc | Annual Report and Accounts 2023Additional informationGovernanceStrategic ReportFinancial Statements Notes to the consolidated financial statements continued
19. Provisions continued
The current expected timeframe of provision requirements is as follows:
Within one year
Between two and five years
Between five and ten years
Between ten and twenty years
Over twenty years
Restoration (i)
£’000
Dilapidations (ii)
£’000
Restructuring (iii)
£’000
Other (iv)
£’000
245
1,192
173
2,763
1,116
5,489
302
1,370
1,781
1,027
140
4,620
5,037
–
–
–
–
5,037
418
–
–
–
–
418
Total
£’000
6,002
2,562
1,954
3,790
1,256
15,564
(i) The restoration provision comprises obligations governing site remediation and improvement costs to be incurred in compliance with
applicable environmental regulations together with constructive obligations stemming from established practice once the sites have
been fully utilised. Provisions are based upon management’s best estimate of the ultimate cash outflows. The key estimates associated
with calculating the provision relate to the cost per acre to perform the necessary remediation work as at the reporting date together
with determining the expected year of retirement. Climate change is specifically considered at the planning stage of developments
when restoration provisions are initially estimated. This includes projection of costs associated with future water management
requirements and the form of the ultimate expected restoration activity. Other changes to legislation, including in relation to climate
change, are factored into the provisions when legislation becomes enacted. Estimates are reviewed and updated annually based on
the total estimated available reserves and the expected mineral extraction rates. Whilst an element of the total provision will reverse
in the medium-term (one to ten years), the majority of the legal and constructive obligations applicable to mineral-bearing land will
unwind within a twenty-year timeframe. In discounting the related obligations, expected future cash outflows have been determined
with due regard to extraction status and anticipated remaining life. Discount rates used are based upon UK Government bond rates
with similar maturities.
(ii) Provisions for dilapidations arose as contingent liabilities recognised upon the business combination in the period ended 31 December
2015. They are recognised on a lease by lease basis and are based on the Group’s best estimate of the likely contractual cash outflows,
which are estimated to occur over the lease term. Third party valuation experts are used periodically in the determination of the best
estimate of the contractual obligation, with expected cash flows discounted based upon UK Government bond rates with similar maturities.
(iii) The restructuring provision comprised obligations arising from the completion of the Group’s review of operations during the second
half of 2023, which involved sites closures and associated redundancy costs. The key estimates associated with the provision relate
to redundancy costs per impacted employee. All of the cost is expected to be incurred within one year of the balance sheet date.
(iv) Other provisions include provisions for legal and warranty claim costs, which are expected to be incurred within one year of the
balance sheet date.
20. Post-employment benefit obligations
(a) Defined Benefit plan
Analysis of movements in the net asset during the year:
Funded plan at 31 December
Opening balance
Charge within operating profit
Interest income
Remeasurement loss recognised in the statement of comprehensive income
Contributions
Carried forward at 31 December
31 December
2023
£’000
31 December
2022
£’000
15,194
(1,082)
711
(5,283)
292
9,832
57,754
(777)
1,048
( 44,581)
1,750
15,194
The Group participates in the Ibstock Pension Scheme (the ‘Scheme’), a defined benefit pension scheme in the UK. The Scheme closed to
future accrual from 1 February 2017. The Scheme has four participating employers – Ibstock Brick Limited, Forticrete Limited, Anderton
Concrete Products Limited and Figgs Bidco Limited – and was funded by payment of contributions to a separate Trustee administered
fund. The Scheme is a revalued earnings plan and provides benefits to its members based on their length of membership in the Scheme
and their average salary over that period. The Scheme is administered by Trustees who employ independent fund managers for the
investment of the pension scheme assets. These assets are kept entirely separate from those of the Group.
The valuation used as at 31 December 2023 has been based on the results of the 30 November 2020 valuation, as updated for changes
in demographic assumptions, as appropriate. The 30 November 2023 valuation will be available in 2024.
Total annual contributions to the Scheme are based on independent actuarial advice, and are gauged to fund future pension liabilities
in respect of service up to the balance sheet date. The Scheme is subject to an independent actuarial valuation at least every three years
using the projected unit method.
160
Ibstock Plc | Annual Report and Accounts 2023 On 20 December 2022, the Scheme completed a full buy-in transaction with a specialist third-party provider, which represented a significant
step in the Group’s continuing strategy of de-risking its pensions exposure. This transaction, together with the partial buy-in transaction
in 2020 insure majority of the Group’s defined benefit liabilities. As a result, the insured asset and the corresponding liabilities of the
Scheme are assumed to be broadly matched without exposure to interest rate, inflation risk or longevity risk. However, there is a residual
risk that the insurance premium may change following a data cleanse to reflect a more accurate liability position. If the surplus Scheme
assets are insufficient to meet any additional premium, then the company may need to pay an additional contribution into the Scheme.
The cover for current deferred pensioners at the date of the transaction attracted a total buy-in premium of £175.6 million. The initial
premium payment of £81.3 million was settled on 28 December 2022 by the transfer of certain Scheme-invested assets. The remaining
premia were settled in three instalments, with the final instalment paid in August 2023.
The difference between the buy-in premium and the IAS 19 liability for these members has been taken through the consolidated
statement of other comprehensive income in the year ended 31 December 2022 as an asset loss of £23.4 million.
The defined benefit pension scheme (measured under IAS 19 Employee Benefits) is in a net surplus position as the Trust Deed provides
Ibstock with an unconditional right to a refund of surplus asset. This assumes the full gradual settlement of plan liabilities over time until
all members have left the plan in the event of a plan wind-up. Furthermore, in the ordinary course of business the Trustees have no right
to unilaterally wind up, or otherwise augment the benefits due to the members of the Scheme. In line with IFRIC 14, a net pension asset
has been recognised. The corresponding deferred tax liability should be measured by applying either the standard rate of corporation
tax to the taxable temporary difference, or the 35% rate applicable to refunds from pension schemes. As the Directors do not consider
it likely that there will be a refund from the Scheme due to expected future settlement costs, the deferred tax liability of £2.5 million
(2022: £3.8 million) has been measured at the standard rate of corporation tax.
Balance sheet assets/(obligations):
Liability-driven investment
Bespoke cash flow-driven investment
Insured annuities
Cash fund investment
Cash
Total market value of assets
Present value of Scheme liabilities
Net Scheme asset
31 December
2023
£’000
–
–
361,436
11,751
532
373,719
(363,887)
9,832
31 December
2022
£’000
290
9,857
358,425
–
5,047
373,619
(358,425)
15,194
Liability-driven investments (LDI) are funds constructed to reduce the inflation risk and interest rate risk within the Scheme. They are
predominantly unquoted and are set up as ‘bespoke pooled funds’ with valuations undertaken on a regular basis with rebalancing
occurring on a quarterly basis to reflect the movements in the Scheme’s other assets and cash flows. This investment was fully
divested in 2023.
The bespoke cash flow-driven investment was held with M&G Investment Managers in order to provide a flow of income to the Scheme
and meet the liability requirements. At 31 December 2022, the Bespoke cash flow-driven investment had a net asset value of £9.9 million,
which comprised invested assets of £101.6 million and negative assets of £91.7 million representing the buy-in deferred premiums.
This investment was fully divested in 2023.
Cash fund investment was held with M&G Investment Management in order to protect the capital of the pension.
Cash fund investment is valued at Level 1 in the fair value hierarchy and all other assets held by the Scheme are Level 2 in the hierarchy.
The cash fund had a quoted market price in an active market, whilst cash and insured annuities are unquoted.
161
Ibstock Plc | Annual Report and Accounts 2023Additional informationGovernanceStrategic ReportFinancial Statements Notes to the consolidated financial statements continued
31 December
2023
£’000
1,082
5,218
6,300
(711)
5,589
31 December
2023
£’000
5,248
(9,272)
5,217
(6,476)
(5,283)
31 December
2023
£’000
(358,425)
(16,688)
(6,476)
21,757
(9,272)
5,217
(363,887)
31 December
2023
£’000
373,619
17,399
5,248
292
(21,757)
(1,082)
373,719
31 December
2022
£’000
777
4,750
5,527
(1,048)
4,479
31 December
2022
£’000
(235,822)
211,786
(1,701)
(18,844)
(44,581)
31 December
2022
£’000
(560,250)
(9,901)
(18,844)
20,485
211,786
(1,701)
(358,425)
31 December
2022
£’000
618,004
10,949
(235,822)
1,750
(20,485)
(777)
373,619
31 December 2023
Quoted
£’000
–
11,751
11,751
Unquoted
£’000
361,436
532
361,968
Total
£’000
361,436
12,283
373,719
%
97%
3%
100%
20. Post-employment benefit obligations continued
The amounts recognised in the income statement are:
Administrative expenses
Defined contribution scheme costs (Note 20b)
Charge within labour costs and operating profit
Interest income
Total charge to the income statement
Remeasurements recognised in the statement of comprehensive income:
Remeasurement gain/(loss) on defined benefit scheme assets
Remeasurement (loss)/gain from changes in financial assumptions
Remeasurement gain/(loss) from changes in demographic assumptions
Experience losses
Other comprehensive expense
Changes in the present value of the defined benefit obligations are analysed as follows:
Present value of defined benefit obligation at beginning of year
Interest cost
Experience losses
Benefits paid
Remeasurement (loss)/gain arising from change in financial assumptions
Remeasurement gain/(loss) arising from change in demographic assumptions
Present value of defined benefit obligations carried forward at 31 December
Changes in the fair value of plan assets are analysed as follows:
Fair value of pension scheme assets at beginning of the year
Interest income
Remeasurement gain/(loss) on pension scheme assets
Employer contributions
Benefits paid
Administrative expenses
Fair value of pension scheme assets carried forward
Plan assets are comprised as follows:
Insured annuities
Cash and net current assets
Total
162
Ibstock Plc | Annual Report and Accounts 2023 Bespoke cash flow-driven investment
Buy-in deferred premia
Net bespoke cash flow-driven investment
Liability-driven investment
Insured annuities
Cash and net current assets
Total
31 December 2022
Quoted
£’000
67,604
(65,827)
1,777
–
–
–
1,777
Unquoted
£’000
33,951
(25,871)
8,080
290
358,425
5,047
371,842
Total
£’000
101,555
(91,698)
9,857
290
358,425
5,047
373,619
%
3%
0%
96%
1%
100%
During the year ended 31 December 2022, based on the previous valuation (as at November 2020), a contribution of £1.75 million was
made by the Group in line with the payment schedule agreed with the Trustees of the Ibstock Pension Scheme. Considering the pension
scheme was in a net surplus position after the full buy-in, on 27 February 2023 the Trustees and the Group agreed that the Group would
suspend paying regular contributions with effect from 1 March 2023. The schedule of contributions will be reviewed again as part of the
30 November 2023 actuarial valuation.
The weighted average duration of the defined benefit obligation is 13 years (2022: 14 years).
The principal assumptions used by the actuary in his calculations were:
Discount rate
RPI inflation
CPI inflation
Rate of increase in pensions in payment
Commutation factors
Mortality assumptions: life expectancy from age 65
For a male currently aged 65
For a female currently aged 65
For a male currently aged 40
For a female currently aged 40
31 December
2023
Per annum
4.55%
3.10%
2.50%
3.60%
21.2
31 December
2022
Per annum
4.80%
3.20%
2.60%
3.65%
18.60
21.4 years
24.1 years
23.1 years
25.9 years
21.9 years
24.5 years
23.6 years
26.4 years
The post-retirement mortality assumptions allow for expected changes to life expectancy. The life expectancies quoted for members
currently aged 40 assume that they retire at age 65 (i.e. 25 years after the balance sheet date).
The principal financial assumption is the real discount rate, being the excess of the discount rate over the rate of inflation. The discount
rate is based on the market yields on high-quality corporate bonds of appropriate currency and term to the defined benefit obligations.
The obligations are primarily in Sterling and have a maturity in line with the duration of Scheme liabilities. If the real discount rate
increased/decreased by 0.25%, the defined benefit obligations at 31 December 2023 would decrease/increase by approximately 3%.
The impact on the defined benefit obligation to changes in the financial and demographic assumptions is shown below:
Present value of defined benefit obligations at 31 December
0.25% increase in discount rate
0.25% decrease in discount rate
0.25% increase in pension growth rate
0.25% decrease in pension growth rate
0.25% increase in inflation rate
0.25% decrease in inflation rate
1 year increase in life expectancy
1 year decrease in life expectancy
31 December
2023
£’000
(363,887)
11,939
(12,573)
(8,731)
8,390
(6,447)
7,433
(15,568)
15,601
31 December
2022
£’000
(358,425)
11,583
(12,209)
(8,417)
8,085
(6,007)
7,270
(14,042)
14,110
163
Ibstock Plc | Annual Report and Accounts 2023Additional informationGovernanceStrategic ReportFinancial Statements Notes to the consolidated financial statements continued
20. Post-employment benefit obligations continued
In June 2023, the High Court ruled that a failure to obtain a “Section 37 certificate” alongside an amendment where there is a statutory
requirement to do so would render the amendment void. If effected, this issue could affect scheme liabilities if it is not possible to locate
Section 37 certificates where required. However, this ruling is currently under appeal and it is uncertain as to whether the Department
for Work and Pension would nullify the effect of the ruling. Therefore, the Scheme’s legal advisers are not yet undertaking an analysis of
the Scheme’s historic documentation and no allowance has been made for the ruling within the IAS19 disclosures at 31 December 2023.
This position will be revisited in future sets of disclosures.
(b) Defined contribution plan
The Group operates defined contribution schemes under the Ibstock Pension Scheme, the Supreme Concrete Limited Pension Scheme,
the Anderton Concrete Pension Scheme, the Supreme Concrete Group Personal Plan and the Longley Concrete Pension scheme. Contributions
by both employees and Group companies are held in externally invested, externally administered funds.
The Group contributes a specified percentage of earnings for members of the above defined contribution schemes, and thereafter has
no further obligations in relation to the Scheme. The total cost charged to the income statement in relation to the defined contribution
scheme in the year was £5.2 million (year ended 31 December 2022: £4.8 million).
21. Deferred tax assets/liabilities
The movement on the deferred tax account is shown below:
Net deferred tax liability at beginning of period
Arising on business combination
Tax charged to the consolidated income statement
Tax credited within other comprehensive income
Tax (charged)/credited directly to equity
Net deferred tax liability at period end
Presented in the consolidated balance sheet after offset as:
Deferred tax liabilities
Deferred tax assets and liabilities before offsetting of balances within the same tax jurisdiction
are as follows:
Deferred tax assets
Deferred tax liabilities
Net deferred tax liability at period end
Deferred tax assets expected to unwind within one year
Deferred tax assets expected to unwind after one year
Deferred tax liabilities expected to unwind within one year
Deferred tax liabilities expected to unwind after one year
31 December
2023
£’000
(84,349)
(99)
(6,802)
1,468
(147)
(89,929)
31 December
2022
£’000
(92,352)
19
(2,797)
10,665
116
(84,349)
(89,929)
(89,929)
(84,349)
(84,349)
5,621
(95,550)
(89,929)
4,107
(88,456)
(84,349)
1,202
4,419
5,621
955
3,152
4,107
(3,169)
(92,381)
(95,550)
(3,064)
(85,392)
(88,456)
164
Ibstock Plc | Annual Report and Accounts 2023 The movement in the net deferred tax liability analysed by each type of temporary difference is as follows:
Year ended 31 December 2023
As at 31 December 2023
Net balance at
1 January 2023
£’000
Arising on
business
combination
£’000
(19,475)
(62,348)
416
(2,699)
(3,799)
2,860
804
(135)
27
–
(99)
–
–
–
–
–
–
–
Recognised
in income
statement
£’000
1,629
(10,100)
609
–
21
911
139
(7)
(4)
Recognised
in OCI
£’000
Recognised
directly in
equity
£’000
–
–
–
–
1,320
–
–
148
–
–
–
–
–
–
–
(147)
–
–
Net
£’000
(17,846)
(72,547)
1,025
(2,699)
(2,458)
3,771
796
6
23
Deferred tax
assets
£’000
Deferred tax
liabilities
£’000
–
–
1,025
–
–
3,771
796
6
23
(17,846)
(72,547)
–
(2,699)
(2,458)
–
–
–
–
(84,349)
(99)
(6,802)
1,468
(147)
(89,929)
5,621
(95,550)
Year ended 31 December 2022
As at 31 December 2022
(5,621)
5,621
(89,929)
Net balance at
1 January 2022
£’000
(20,795)
(58,311)
510
Arising on
business
combination
£’000
–
(8)
–
Recognised
in income
statement
£’000
1,320
(4,029)
(94)
Recognised
in OCI
£’000
–
–
–
Recognised
directly in equity
£’000
–
–
–
(2,699)
(14,439)
2,978
390
14
–
(92,352)
–
–
–
–
–
27
19
–
(174)
(118)
298
–
–
–
10,814
–
–
(149)
–
–
–
–
116
–
–
Net
£’000
(19,475)
(62,348)
416
(2,699)
(3,799)
2,860
804
(135)
27
Deferred tax
assets
£’000
–
–
416
Deferred tax
liabilities
£’000
(19,475)
(62,348)
–
–
–
2,860
804
–
27
(2,699)
(3,799)
–
–
(135)
–
(2,797)
10,665
116
(84,349)
4,107
(88,456)
(4,107)
–
4,107
(84,349)
Deferred tax assets/(liabilities)
Intangible fixed assets
Tangible fixed assets
Right-of-use assets
Rolled-over and held-over
capital gains
Employee pension liabilities
Provisions
Share incentive plans
Derivative financial
instrument
Tax losses
Deferred tax (liabilities)/
assets before offsetting
Offset of balances within
the same tax jurisdiction
Net deferred tax liabilities
Deferred tax assets/(liabilities)
Intangible fixed assets
Tangible fixed assets
Right-of-use assets
Rolled-over and held-over
capital gains
Employee pension liabilities
Provisions
Share incentive plans
Derivative financial
instrument
Tax losses
Deferred tax assets/
(liabilities) before offsetting
Offset of balances within
the same tax jurisdiction
Net deferred tax liabilities
There are no unrecognised deferred tax assets or liabilities as at 31 December 2023 or the prior year end.
165
Ibstock Plc | Annual Report and Accounts 2023Additional informationGovernanceStrategic ReportFinancial Statements Notes to the consolidated financial statements continued
22. Financial instruments – risk management
Financial assets
Trade and other receivables (Note 15)
Derivative financial instruments
Cash and cash equivalents
Total
Financial liabilities
Trade and other payables (Note 17)
Derivative financial instruments
Lease liabilities (Note 26)
Borrowings (Note 18)
Total
31 December
2023
£’000
33,525
–
23,872
57,397
31 December
2023
£’000
77,651
24
43,833
124,488
245,996
31 December
2022
£’000
60,024
567
54,283
114,874
31 December
2022
£’000
112,233
–
33,104
100,205
245,542
With the exception of the Group’s derivative financial instruments, see below, all financial assets and liabilities are held at amortised cost.
Credit risk
Credit risk arises from cash and cash equivalents, trade receivables and deposits with banks and is managed on a Group basis.
This risk arises from transactions with banks, such as those involving cash and cash equivalents and deposits. To reduce the credit risk,
the Group has concentrated its main activities with a Group of banks that have strong, independently verified credit ratings. For each
bank, individual risk limits are set based on its financial position, credit ratings, past experience and other factors. The utilisation of
credit limits is regularly monitored.
The Group has significant sales contracts with a number of blue-chip companies and accordingly the Directors believe there is a limited
exposure to credit risk, although this is actively monitored at the operational Company level. The Group’s policy on credit risk requires
appropriate credit checks on potential customers before sales commence. The Group also maintains credit insurance.
The Group applies the simplified approach to providing for expected credit losses prescribed by IFRS 9, which permits the use of the
lifetime expected loss provision for all trade receivables. To measure the expected credit losses, trade receivables have been grouped
based on shared credit risk characteristics and the days past due.
The ageing analysis of the trade receivables (from date of past due) assessed for impairment, but concluded as no impairment is
required, is as follows:
Not past due
Less than one month past due
One to six months past due
Six to twelve months past due
More than 12 months past due
The ageing analysis of the trade receivables (from date of past due) determined to be impaired is as follows:
Less than one month past due
One to six months past due
Six to twelve months past due
More than 12 months past due
166
31 December
2023
£’000
22,655
8,390
2,302
23
155
33,525
31 December
2022
£’000
38,385
16,870
3,749
998
22
60,024
31 December
2023
£’000
31 December
2022
£’000
478
279
–
208
965
437
40
111
88
676
Ibstock Plc | Annual Report and Accounts 2023 Movements in the provision for impairment of trade receivables are as follows:
Opening balance
Charged to the income statement
Released
Closing impairment provision
31 December
2023
£’000
(676)
(347)
58
(965)
31 December
2022
£’000
(636)
(133)
93
(676)
The gross carrying amount of trade receivables, reflecting the maximum exposure to credit risk, is £32.7 million (2022: £59.3 million).
Other financial assets at amortised cost are insignificant and the associated credit risk is considered immaterial.
Market risk
Market risk is defined as the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in
market prices. Market risk comprises three types of risk, being currency risk, interest rate risk and other price risk. The Group’s interest rate
risk arises principally from the Revolving Credit Facility, which attracts floating rate interest, see Note 18. The Group manages its interest
rate risk through the use of the fixed rate Private Placement in addition to using this floating rate RCF debt with varying repayment terms.
The Group does not trade in derivative financial instruments and is not considered to be significantly exposed to this and other price risks.
The exposure to currency risk is considered low.
Interest rate sensitivity analysis:
For the Group’s borrowings, sensitivity analysis is considered assuming the amount of liability outstanding at the reporting date was
outstanding for the whole year. A 0.25 percentage points increase or decrease represents management’s assessment of the reasonably
possible change in interest rates.
If interest rates had been 0.25 percentage points higher/lower and all other variables were held constant, the Group’s profit for the year
ended 31 December 2023 would decrease/increase by £0.2 million (2022: £nil), which is attributable to the Group’s exposure to interest
rates on its variable rate borrowings.
The exposure in different currencies of financial assets and liabilities is as follows:
At 31 December 2023
Financial assets
Cash and cash equivalents
Trade and other receivables (Note 15)
Financial liabilities
Borrowings (Note 18)
Lease liabilities (Note 26)
Derivative financial instruments
Trade and other payables (Note 17)
At 31 December 2022
Financial assets
Cash and cash equivalents
Derivative financial instruments
Trade and other receivables (Note 15)
Financial liabilities
Borrowings (Note 18)
Lease liabilities (Note 26)
Trade and other payables (Note 17)
Sterling
£’000
US Dollar
£’000
Euro
£’000
Other
£’000
Total
£’000
22,855
32,656
55,511
(124,488)
(43,833)
(24)
(74,994)
(243,339)
808
–
808
–
–
–
(15)
(15)
Sterling
£’000
US Dollar
£’000
54,147
567
58,857
113,571
(100,205)
(33,104)
(110,698)
(244,007)
69
–
–
69
–
–
(44)
(44)
209
869
1,078
–
–
–
(2,642)
(2,642)
Euro
£’000
67
–
1,167
1,234
–
–
(1,481)
(1,481)
–
–
–
–
–
–
–
–
23,872
33,525
57,397
(124,488)
(43,833)
(24)
(77,651)
(245,996)
Other
£’000
Total
£’000
–
–
–
–
–
–
(10)
(10)
54,283
567
60,024
114,874
(100,205)
(33,104)
(112,233)
(245,542)
167
Ibstock Plc | Annual Report and Accounts 2023Additional informationGovernanceStrategic ReportFinancial Statements Notes to the consolidated financial statements continued
22. Financial instruments – risk management continued
There are no material differences between the fair values and the book values stated above with the exception of £100 million of private
placement notes within borrowings. The fair value of these borrowings is assessed as £88.3 million (2022: £86.4 million). This amount
was determined using discounted cash flows based on observable market data.
At 31 December 2023, the Group had negligible risk to currency fluctuations as the majority of assets and liabilities are held in the same
functional currency.
Derivative financial instruments
The Group entered into forward currency contracts as cash flow hedges to manage its exposure of foreign currency fluctuations
associated with the future purchase of plant and equipment required for the construction of the major capital expenditure projects.
These instruments are measured at fair value using Level 2 valuation techniques subsequent to initial recognition.
At 31 December 2023, a liability value of £0.1 million (2022: asset of £0.6 million) was recognised for these derivative financial
instruments. No amounts have been reclassified to profit or loss as a result of the hedged cash flow during the year. The cash flow
hedging reserve within equity includes an accumulated amount of £0.1 million deficit (2022: £0.4 million surplus) relating to these
derivative financial instruments.
Liquidity risk
The Group has generated sufficient cash from operations to meet its working capital requirements. The Group manages liquidity risk by
entering into committed bank borrowing facilities to ensure the Group has sufficient funds available, and monitors cash flow forecasts
to ensure the Group has adequate borrowing facilities. Excess cash is placed on interest-bearing deposits with maturity fixed at no more
than three months.
The maturity of the Group’s borrowings is as follows:
At 31 December 2023
Borrowings
Borrowings
Total
At 31 December 2022
Borrowings
Borrowings
Total
Less than six
months
£’000
Six months to
one year
£’000
One to two
years
£’000
Two to five
years
£’000
Greater than
five years
£’000
Total
£’000
496
496
–
–
–
–
54,192
54,192
69,800
69,800
124,488
124,488
Less than six
months
£’000
Six months to
one year
£’000
One to two
years
£’000
Two to five
years
£’000
Greater than
five years
£’000
Total
£’000
436
436
–
–
–
–
–
–
99,769
99,769
100,205
100,205
At 31 December 2023, the Group had a £125 million Revolving Credit Facility (31 December 2022: £125 million). £30.0 million (2022: £nil)
of these facilities were utilised during the year with a repayment of £5.0 million (2022: £nil), resulting in an interest expense comprising
£0.7 million interest on funds drawn down, £0.6 million of facility commitment fees, £0.2 million of other arrangement costs and
£0.4 million of deal fee amortisation.
For details of the maturity of other financial liabilities, see Notes 18 and 26.
The contractual non-discounted minimum future cash flows in respect of these borrowings are:
Less than one
year
£’000
One to two
years
£’000
Two to five
years
£’000
Greater than
five years
£’000
Total
£’000
2,899
2,899
2,897
2,897
37,275
37,275
75,197
75,197
118,268
118,268
Less than one
year
£’000
One to two
years
£’000
Two to five
years
£’000
Greater than
five years
£’000
Total
£’000
2,897
2,897
2,899
2,899
7,982
7,982
107,386
107,386
121,164
121,164
At 31 December 2023
Borrowings
Borrowings
Total
At 31 December 2022
Borrowings
Borrowings
Total
168
Ibstock Plc | Annual Report and Accounts 2023 Fair value hierarchy
IFRS 13 Financial Instruments: Disclosures requires fair value measurements to be recognised using a fair value hierarchy that reflects
the significance of the inputs used in the measurements, according to the following levels:
Level 1 Unadjusted quoted prices in active markets for identical assets or liabilities.
Level 2
Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (that is,
as prices) or indirectly (that is, derived from prices).
Level 3
Inputs for the asset or liability that are not based on observable market data (that is, unobservable inputs).
At 31 December 2023 and 31 December 2022 all of the Group’s fair value measurements have been categorised as Level 2 with the
exception of (i) certain equities within the Group’s pension scheme, which were categorised as Level 1 valuations and (ii) the insured
pensioner and deferred pensioner asset, which was categorised as a Level 3 valuation and uses assumptions set out in Note 20 to
align its valuation to the related liability.
Capital risk management
The capital structure of the Group consists of net debt1 (borrowings disclosed in Note 18 after deducting cash and bank balances)
and equity of the Parent Company, comprising issued capital, reserves and retained earnings, as disclosed in Note 24 and Note 23.
The Group’s objectives when managing capital are to safeguard the Group’s ability to continue as a going concern in order to provide
returns for shareholders and benefits for other stakeholders and to maintain an optimal capital structure to minimise the cost of capital.
In order to maintain or adjust the capital structure, the Group may adjust the amount of dividends paid to shareholders, return capital
to shareholders, issue new shares, or borrow additional debt.
The Group must comply with two covenants each half year, as set out in Note 18. The covenants are certain ratios of interest cover
and leverage, which are monitored on a regular basis by the Board. At the year end date, significant headroom existed on both
covenant conditions.
Dividend policy
In line with our capital allocation framework, we will look to pay an ordinary dividend. We are committed to paying dividends which are
sustainable and progressive, with a targeted cover of approximately two times adjusted profit after tax. This adjusted profit measure
can be seen in Note 11 to the Group financial statements. After investing to maintain, enhance and grow our assets, we will return
surplus capital to shareholders.
In the current year, the Board is recommending a final ordinary dividend of 3.6 pence per share for the 2023 (2022: 5.5 pence per share).
See Note 31 for further detail. At 31 December 2023, the Parent maintains significant distributable reserves of around £300 million
(2022: around £340 million).
23. Share capital
At 1 January 2022
Issued, called-up and fully paid:
Ordinary Shares of £0.01 each
At 31 December 2022 and 31 December 2023
Comprising:
Issued, called-up and fully paid:
Ordinary Shares of £0.01 each
Number of shares
Share
Capital
£‘000
409,631,594
409,631,594
4,096
4,096
409,631,594
4,096
In the years ended 31 December 2023 and 31 December 2022, there were no changes to the Group’s issued share capital. The Company
does not have a limited amount of authorised capital.
1 Alternative performance measures are described in Note 3 and exceptional items are described in Note 5 to the consolidated financial statements.
169
Ibstock Plc | Annual Report and Accounts 2023Additional informationGovernanceStrategic ReportFinancial Statements Notes to the consolidated financial statements continued
24. Reserves
Share premium
The share premium account is used to record the aggregate amount or value of premia paid when the Company’s shares are
issued/redeemed at a premium.
Other reserves
The movement in other reserves during the period is set out in the table below:
Balance at 1 January 2023
Other comprehensive income
Shares purchased – share buyback scheme
Issue of own shares held on exercise of share options
At 31 December 2023
Balance at 1 January 2022
Other comprehensive income
Shares purchased – share buyback scheme
Issue of own shares held on exercise of share options
At 31 December 2022
Cash flow
hedging reserve
£’000
Merger reserve
£’000
Own shares held
£’000
Treasury shares
£’000
418
(443)
–
–
(25)
(74)
492
–
–
418
(369,119)
–
–
–
(369,119)
(369,119)
–
–
–
(369,119)
(1,589)
–
–
1,075
(514)
(1,741)
–
–
152
(1,589)
(30,000)
–
–
–
(30,000)
–
–
(30,000)
–
(30,000)
Total other
reserves
£’000
(400,290)
(443)
–
1,075
(399,658)
(370,934)
492
(30,000)
152
(400,290)
Cash flow hedging reserve
The cash flow hedging reserve records movements for effective cash flow hedges measured at fair value as set out in Note 22.
The accumulated balance in the cash flow hedging reserve will be reclassified to the cost of the designated hedged item in
a future period.
Merger reserve
The merger reserve of £369.1 million arose on the acquisition of Figgs Topco Limited by Ibstock Plc in the period ended 31 December 2015
and is the difference between the share capital and share premium of Figgs Topco Limited and the nominal value of the investment
and preference shares in Figgs Topco Limited acquired by the Company.
Own shares held
The Group’s holding in its own equity instruments is shown as a deduction from shareholders’ equity at cost totalling £0.5 million
at 31 December 2023 (31 December 2022: £1.6 million). These amounts represent shares held in the Employee Benefit Trust to meet
the future requirements of the employee share based payment plans. Consideration, if any, received for the sale of such shares is
also recognised in equity with any difference between the proceeds from sale and the original cost being taken to the profit and
loss reserve. No gain or loss is recognised in the income statement on the purchase, sale, issue or cancellation of equity shares.
Treasury share reserve
The Treasury share reserve represents shares acquired by the Group as part of its share buyback programme in 2022.
In 2022, the Group engaged its brokers to purchase up to £30.0 million of shares on the open market on its behalf. These shares are
held by the Group to meet future requirements of employee share based payment plans. At 31 December 2023, the Treasury shares
reserve contained 16,791,470 shares (2022: 16,791,470 shares).
170
Ibstock Plc | Annual Report and Accounts 2023
25. Share incentive plans
Share based payment charges:
Long Term Incentive Plan (25(a))
Share Option Plan (25(b))
Senior Manager Share Plan (25(c))
Annual and Deferred Bonus Plan (25(d))
Save As You Earn/Share Incentive Plan (25(e)/(f)/(g))
Reserves transfer in relation to prior periods (25(d))
Year ended
31 December
2023
£000
499
–
246
118
1,445
–
2,308
Year ended
31 December
2022
£000
1,166
3
172
100
754
352
2,547
Executive share option plans
The Group operates a number of share based payment awards for certain employees.
(a) Long-Term Incentive Plan (LTIP)
The Group granted LTIPs during the year for Executive Directors and other key management at the discretion of the Board and this has
been approved by the shareholders at the Annual General Meeting. Awards under the scheme are granted in the form of nil-priced share
options. The LTIP awards contain performance conditions dependent upon the Group’s Total Shareholder Return (TSR), adjusted earnings
per share1 (EPS), adjusted return on capital employed1 (Adjusted ROCE) and certain environmental, social and governance (ESG) targets.
Please refer to the information given in the Directors’ Remuneration Report on pages 99 to 116 for details in relation to the vesting
conditions in relation to the LTIP.
During the year, 1,120,861 options (2022: 1,366,767 options) over Ordinary Shares of one pence each were granted to management
under the LTIP and 258,144 options (2022: 18,005 options) were exercised at a weighted average share price at the date of exercise
of 157p (2022: 200p). During the year ended 31 December 2023, 849,075 options (2022: 643,585 options) lapsed and at 31 December
2023, the weighted average contractual life remaining was 1.4 years (2022: 1.4 years).
(b) Share Option Plan (SOP)
The Group maintains a Share Option Plan at the discretion of the Board and this has been approved by shareholders at the Annual
General Meeting. During the years ended 31 December 2023 and 31 December 2022, no options were granted to management
under the SOP.
In the year ended 31 December 2023, no options (2022: no options) were exercised under the historical SOP awards. In the year ended
31 December 2023, 243,868 (2022: Nil) lapsed. The weighted average exercise price of options outstanding is 242p (2022: 243p).
At 31 December 2023 and 2022, there was no weighted average contractual life remaining. The SOP has an employment condition
of three years and no other performance conditions.
(c) Senior Manager Share Plan (SMSP)
During the year ended 31 December 2021, the Group introduced the SMSP for certain senior managers. Awards under the scheme are
granted in the form of nil-priced share options. The SMSP awards contain performance conditions dependent upon the growth of the
Group’s adjusted EBITDA1. The SMSP has an employment condition of two years.
In the year ended 31 December 2023, 201,832 options over Ordinary Shares of one pence each were granted to management under the
SMSP. 46,871 options were exercised in the current year with a weighted average share price at the date of exercise of 154p and 13,682
options lapsed or were forfeited. In the year ended 31 December 2022, 147,999 options over Ordinary Shares of 1p each were granted
to management under the 2022 SMSP. No awards were exercised, 13,741 options lapsed or were forfeited. At 31 December 2023,
the weighted average contractual life remaining was 0.7 years (2022: 0.9 years).
(d) Annual and Deferred Bonus Plan (ADBP)
The ADBP incorporates the Company’s executive bonus scheme as well as a mechanism for the deferral of bonus into awards over
Ordinary Shares. The ADBP operates in respect of the annual bonus earned for the financial year. The Board can determine that part
of the bonus earned under the ADBP is provided as an award of deferred shares, which take the form of a £nil cost option. The maximum
value of deferred shares is 1/3 of the bonus earned. In the year ended 31 December 2023, 296,822 options (2022: 232,760 options) were
awarded over Ordinary Shares under the ADBP in relation to the prior year end bonus. The main terms of these awards are a minimum
deferral period of three years, during which no performance conditions will apply; and the participants’ employment at the end of the
deferral period. In the year ended 31 December 2023, 118,779 options (2022: 61,562 options) were exercised under the ADBP at a
weighted average share price at the date of exercise of 167p (2022: 181p). At 31 December 2023, the weighted average contractual life
remaining was 0.8 years (2022: 0.9 years). In the current year and prior year, no awards lapsed or were forfeited, at 31 December 2023,
an amount of £0.1 million (2022: £0.2 million) had been recorded in accruals for the award relating to the bonus earned for the year
ended 31 December 2023. In the current year, no (2022: £0.4 million) prior period accruals for the ADBP were reclassified to the share
based payment reserve.
171
Ibstock Plc | Annual Report and Accounts 2023Additional informationGovernanceStrategic ReportFinancial Statements Notes to the consolidated financial statements continued
25. Share incentive plans continued
All-employee share schemes
In addition to the executive share option plans, the Group has three all-employee share based payment arrangements –
the Save As You Earn (SAYE) plan, Share Incentive Plan and Fire Up Grant:
(e) Save As You Earn (SAYE)
In order to participate in the Group’s Sharesave Plan, an employee must enter into a linked savings contract with a bank or building
society to make contributions from salary on a monthly basis over a three-year period. A participant who enters into a savings
agreement is granted an option to acquire Ordinary Shares of one pence each under the Sharesave Plan at a specified exercise price.
In the year ended 31 December 2023 and 2022, no awards were issued under this scheme. In the current year, 1,149,251 options
(2022: 575,793) lapsed with a weighted average exercise price of 176p (2022: 176p) and no shares were exercised (2022: nil). As at
31 December 2023, the weighted average exercise price of outstanding options was 176p (2022: 176p), and the range of exercise
prices of outstanding options in 2023 and 2022 is 176p. The remaining option life was 0.4 years (2022: 1.4 years).
(f) Share Incentive Plan (SIP)
Following the Group’s Initial Public Offering, the Company announced a SIP. Subject to qualifying employment conditions, all employees
were entitled to apply for free shares up to a value of £800 depending on their period of service. The number of shares issued under the
SIP in the year ended 31 December 2016 was 553,150. The free shares had a three-year employment condition and no further vesting
conditions. In the year ended 31 December 2023, no shares lapsed (2022: 800) and 25,050 shares were exercised or transferred
(2022: 48,200 ) at a weighted average share price at date of exercise of 149p (2022: 174p).
(g) Fire Up Grant
In the previous year the Company announced a SIP referred to as the “Fire Up share grant”. Subject to qualifying employment conditions,
all employees below senior management level were entitled to 500 share options at a nil exercise price. The number of shares issued
under the SIP in the previous year was 1,070,000. The free shares have a two-year employment condition and no further vesting conditions.
In the year ended 31 December 2023, 136,875 shares lapsed or were forfeited (2022: 500). 139,500 shares were exercised (2022: nil)
at a weighted average share price at date of exercise of 149p.
The assumptions used to calculate the fair value of the LTIP, SOP and ADBP awards granted during the year ended 31 December 2023
are detailed below:
ADBP
LTIP
SMSP
Grant date
Share price at grant date
Exercise price
Number of shares issued
Vesting period
Pricing model
% expected to vest
Expected share price volatility
Expected dividend yield
Expected option life
Fair value per share
Risk-free rate
16-Mar-23
£1.78
03-Apr-23
£1.74
nil
288,983
3 years
nil
1,104,040
3 years
Share price Monte Carlo
97%
35.43%
n/a
3 years
£1.50
3.5%
100%
n/a
n/a
3 years
£1.78
n/a
16-Mar-23
£1.78
nil
193,931
2 years
Share Price
90%
n/a
n/a
2 years
£1.78
n/a
Awards under the executive share option plans and all-employee share schemes are as follows:
Outstanding at 1 January 2023
Awards granted
Awards granted as dividend equivalent
Awards exercised
Awards lapsed/forfeited
Awards outstanding at 31 December 2023
Executive share
options
All-employee
schemes
4,243,381
1,581,954
37,561
(423,764)
(1,106,625)
4,332,507
4,047,005
–
–
(139,500)
(1,286,126)
2,621,379
The expected volatility level has been calculated using historical daily data over a term commensurate with the expected life of each award.
172
Ibstock Plc | Annual Report and Accounts 2023 26. Leases and commitments
Amounts recognised within the consolidated balance sheet
The balance sheet shows the following amounts relating to leases:
Right-of-use assets
Buildings
Equipment
Vehicles
Total right-of-use assets
Lease liabilities
Less than six months
Six months to one year
Current
One to two years
Two to five years
Greater than five years
Non-current
Total lease liabilities
Movement in right-of-use asset:
Cost
At 1 January 2022
Additions
Disposals
At 31 December 2022
Additions
Disposals
At 31 December 2023
Accumulated depreciation and impairment
At 1 January 2022
Charge for the year
At 31 December 2022
Charge for the year
Impairment
At 31 December 2023
Net book amount
At 31 December 2022
At 31 December 2023
31 December
2023
£’000
31 December
2022
£’000
20,697
15,163
3,971
39,831
(4,824)
(4,468)
(9,292)
(8,310)
(16,448)
(9,783)
(34,541)
(43,833)
14,844
14,672
1,962
31,478
(3,828)
(3,862)
(7,690)
(6,316)
(13,774)
(5,324)
(25,414)
(33,104)
Buildings
£’000
Equipment
£’000
Vehicles
£’000
Total
£’000
23,000
2,424
–
25,424
9,660
–
35,084
(8,020)
(2,560)
(10,580)
(3,507)
(300)
(14,387)
17,693
10,838
–
28,531
6,769
(118)
35,182
(10,265)
(3,594)
(13,859)
(5,279)
(881)
(20,019)
7,515
1,086
(246)
8,355
5,001
–
13,356
(4,809)
(1,584)
(6,393)
(2,992)
–
(9,385)
48,208
14,348
(246)
62,310
21,430
(118)
83,622
(23,094)
(7,738)
(30,832)
(11,778)
(1,181)
(43,791)
14,844
20,697
14,672
15,163
1,962
3,971
31,478
39,831
173
Ibstock Plc | Annual Report and Accounts 2023Additional informationGovernanceStrategic ReportFinancial Statements Notes to the consolidated financial statements continued
26. Leases and commitments continued
Movement in lease liabilities:
As at 1 January
Additions
Disposals
Interest payments
Cash rental payments
As at 31 December
Amounts recognised within the consolidated income statement
Depreciation charge of right-of-use assets
Buildings
Equipment
Vehicles
Impairment
Depreciation expense (included within cost of sales)
Interest expense (included within finance costs)
Year ended
31 December
2023
£’000
(33,104)
(21,432)
615
(2,368)
12,456
(43,833)
Year ended
31 December
2022
£’000
(27,184)
(14,175)
245
(1,274)
9,284
(33,104)
Year ended
31 December
2023
£’000
3,507
5,279
2,992
11,778
1,181
12,959
2,368
Year ended
31 December
2022
£’000
2,560
3,594
1,584
7,738
–
7,738
1,274
In the year ended 31 December 2023, the benefit to Adjusted EBITDA1 as a result of IFRS 16 leases was £12.1 million (2022: £8.5 million).
Operating lease charges now expensed via depreciation amount to £11.6 million (2022: £7.1 million) and interest of £2.4 million
(2022: £1.2 million) resulting in a net reduction in profit before taxation of £1.8 million (2022: £0.2 million).
The Group is lessee on a number of properties in addition to plant and machinery which it uses in its operations. The operating leases
run for a variety of terms and their non-cancellable commitments are set out above. There is no material contingent rent payable,
renewal or purchase options, escalation clauses or restrictions imposed by the lease agreements.
The Group as lessor
The Group acts as lessor on a number of properties where it leases surplus land not currently utilised by the business. The operating
leases run for a variety of terms and their future minimum lease payments receivable are set out as follows:
Within one year
Between one and five years
After five years
Capital commitments
Capital expenditure committed to but not yet incurred at the balance sheet date is as follows:
Amount contracted for, which has not been provided
31 December
2023
£’000
68
40
–
108
31 December
2022
£’000
70
47
12
129
31 December
2023
£’000
30,844
31 December
2022
£’000
76,765
1 Alternative performance measures are described in Note 3 and exceptional items are described in Note 5 to the consolidated financial statements.
174
Ibstock Plc | Annual Report and Accounts 2023 27. Notes to the Group cash flow statement
Cash flows from operating activities
Profit before taxation
Adjustments for:
Depreciation
Asset impairment charge – property, plant and equipment (Note 5)
Asset impairment charge – right-of-use assets (Note 5)
Asset impairment charge – working capital (Note 5)
Amortisation of intangible assets
Net finance costs
Gain on disposal of property, plant and equipment
Research and development expenditure credit
Share based payments
Post-employment benefits
Other
Increase in inventory
Decrease/(increase) in debtors
(Decrease)/increase in creditors
Increase/(decrease) in provisions
Cash generated from operations
31 December
2023
£’000
30,067
31 December
2022
£’000
104,764
34,626
15,397
1,181
4,022
6,938
4,964
(1,957)
(2,427)
2,308
790
(617)
95,292
(28,495)
28,298
(36,865)
5,426
63,656
31,579
554
–
–
6,939
2,663
(6,541)
(1,560)
2,547
(973)
(172)
139,800
(21,255)
(930)
20,650
(500)
137,765
28. Business combinations
On 30 November 2023, the Group acquired 100% of the share capital of Valerie Coltman Holdings Limited and its subsidiary Coltman
Precast Concrete Limited. The acquisition of the Coltman business will expand the Group’s Concrete segment and supports further growth
in precast and prestressed concrete business. The acquisition of the Coltman business will expand the Group’s Concrete segment and
supports further growth in precast and prestressed concrete business. The headline price for the acquisition was £3.4 million. The net
cash paid in 2023 totalled £2.7 million (comprising gross payments of £5.2 million less cash acquired of £2.5 million). This net payment
of £2.7 million excluded £0.7 million of the headline consideration, withheld ahead of finalisation of closing adjustments, expected to
be concluded during the first half of the 2024 year.
Provisional details of the net assets acquired and goodwill are as follows:
Cash
Trade receivables
Other receivables
Inventories
Property, plant and equipment
Trade payables
Other payables
Provisions
Deferred tax liabilities
Corporation tax liabilities
Net identifiable assets acquired
Goodwill
Net assets acquired
Fair Value
£000
2,532
1,343
216
440
2,707
(817)
(473)
(736)
(99)
(137)
4,976
209
5,185
The goodwill is attributable to the workforce and the profitable nature of the acquired business. It is not deductible for tax purposes.
The fair value of acquired trade receivables is £1.3 million. The gross contractual amount for trade receivables due is £1.3 million,
with no loss allowance at the time of acquisition.
The acquired business contributed revenues of £0.6 million and net profit of £6,000 to the Group from the period from acquisition to
31 December 2023. If the acquisition had occurred on 1 January 2023, consolidated pro-forma revenue and profit for the year ended
31 December 2023 would have been £7.7 million and £1.6 million, respectively.
The fair values of acquired identifiable assets and liabilities are reported as provisional, pending final reviews. The valuations of these
assets and liabilities shall be completed prior to the end of the measurement period.
175
Ibstock Plc | Annual Report and Accounts 2023Additional informationGovernanceStrategic ReportFinancial Statements
Notes to the consolidated financial statements continued
28. Business combinations continued
On 29 July 2022, the Group acquired 75% of the share capital of Generix Facades Limited for cash consideration of £1.0 million, which
was paid during the prior year. Deferred consideration of £0.1 million was paid in July 2023. The values of acquired assets associated
with the acquisition were finalised during the current year with no updates to provisional value assigned, which were set out on page 190
of the Group’s 2022 Annual Report and Accounts.
In December 2023, the Group acquired the remaining 25% of share capital for a consideration of £0.3 million.
29. Group subsidiaries
Ibstock Plc had the following subsidiaries as at 31 December 2023:
Entity
Ibstock Building Products Limited1
Figgs Bidco Limited
Ibstock Telling GRC Limited2
Ibstock Group Limited
Forticrete Limited
Anderton Concrete Products Limited
Supreme Concrete Limited
Principal activity
Holding Company
Holding Company
Manufacturer and supplier of glass
reinforced concrete products
Holding Company
Manufacturer of concrete products
Manufacturer and supplier of precast
and prestressed concrete products
Manufacturer and supplier of precast
and prestressed concrete products
Ibstock Brick Holding Company Limited Holding Company
Brick manufacturer
Ibstock Brick Limited
Ibstock Manufacturing Services Limited Brick manufacturer
Dormant
Kevington Building Products Limited
Dormant
Ibstock Brick Leicester Limited
Dormant
Ibstock Brick Aldridge Limited
Dormant
Ibstock Brick Himley Limited
Ibstock Westbrick Limited
Dormant
Ibstock Brick Aldridge Property Limited Dormant
Dormant
Moore & Sons Limited
Dormant
Manchester Brick & Precast Limited
Dormant
Ibstock Brick Nostell Limited
Dormant
Ibstock Brick Roughdales Limited
Dormant
Ibstock Brick Cattybrook Limited
Dormant
Ibstock Hathernware Limited
Holding Company
Ibstock Bricks (1996) Limited
Dormant
Loopfire Systems Limited
Holding Company
Longley Holdings Limited
Manufacturer and supplier of precast
Longley Concrete Ltd
and prestressed concrete products
Manufacturer and supplier of facades
Dormant
Dormant
Manufacturer and supplier of precast
and prestressed concrete products
Holding Company
Generix Facades Ltd
Generix Facades International Limited
G-Tech Coper Limited2
Coltman Precast Concrete Limited
Valerie Coltman Holdings Limited
Registration
number
09329395
09332893
09415340
Country of
incorporation
UK
UK
UK
Proportion of
Ordinary Shares
held directly by
the parent
100%
100%
100%
Proportion of
Ordinary Shares
held by the
Group
100%
100%
100%
00984268
00221210
01900103
01410463
00784339
00063230
12292985
02122467
00106667
00614225
00092769
01606990
00251918
00118818
02888297
00531826
00598862
00011298
00424843
00246855
04105160
02027916
00440463
08432030
09777110
00888875
01032721
06824310
UK
UK
UK
UK
UK
UK
UK
UK
UK
UK
UK
UK
UK
UK
UK
UK
UK
UK
UK
UK
UK
UK
UK
UK
UK
UK
UK
UK
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
All entities have a place of business in the UK. The registered office address for all entities is the same as for the ultimate Parent
Company, Leicester Road, Ibstock, Leicestershire, LE67 6HS.
All subsidiary undertakings are included in the consolidated financial statements. The proportion of the voting rights in the subsidiary
undertakings held directly by the Parent Company do not differ from the proportion of Ordinary Shares held. At 31 December 2023,
the Parent Company does not have any shareholdings in the preference shares of subsidiary undertakings included in the Group.
1 Ibstock Building Products Ltd is owned directly by Ibstock Plc. All other companies are indirectly owned.
2 Longley Precast Limited was renamed as G-Tech Coper Limited on 12 June 2023.
176
Ibstock Plc | Annual Report and Accounts 2023 30. Related party transactions
Balances and transactions between Ibstock Plc (the ultimate Parent) and its subsidiaries (listed in Note 29), which are related parties,
are eliminated on consolidation and are not disclosed in this note.
See Note 7 for details of Director and key management personnel remuneration.
There are no further material related party transactions nor any related party balances in either the 2023 or 2022 financial years.
31. Dividends paid and proposed
Cash flows from operating activities
Declared and paid during the year
Equity dividends on Ordinary Shares:
Final dividend for 2022: 5.5 pence (2021: 5.5 pence)
Interim dividend for 2023: 3.4 pence (2022: 3.3 pence)
Proposed (not recognised as a liability as at 31 December)
Equity dividends on Ordinary Shares:
Final dividend for 2023: 3.6 pence (2022: 5.5 pence)
31 December
2023
£’000
31 December
2022
£’000
21,566
13,341
34,907
20,438
13,263
33,701
14,123
14,123
21,560
21,560
At the beginning of 2024, the Directors proposed a final dividend in respect of the financial year ended 31 December 2023 of 3.6 pence
(2022: 5.5 pence) per Ordinary Share, which will distribute an estimated £14.1 million (2022: £21.6 million) of shareholders’ funds. Subject to
approval at the Annual General Meeting, this will be paid on 31 May 2024, to shareholders on the register at the close of business on 10 May 2024.
32. Post balance sheet events
Except for the proposed dividend (see Note 31), no further subsequent events requiring further disclosure or adjustment to these financial
statements have been identified since the balance sheet date.
177
Ibstock Plc | Annual Report and Accounts 2023Additional informationGovernanceStrategic ReportFinancial Statements Company balance sheet
(prepared in accordance with UK GAAP – FRS 102)
Company number: 09760850
As at 31 December 2023
Fixed assets
Investments
Current assets
Debtors
Cash at bank and in hand
Creditors – amounts falling due within one year
Net current liabilities
Total assets less current liabilities
Creditors – amounts falling due after more than one year
Net assets
Capital and reserves
Called-up share capital
Share premium
Own shares held
Profit and loss account
Total equity
31 December
2023
£’000
31 December
2022
£’000
Notes
4
5
6
7
9
628,049
626,556
8,835
287
9,122
5,075
300
5,375
(262,340)
(253,218)
374,831
(213,471)
(208,096)
418,460
(98,992)
(99,769)
275,839
318,691
4,096
4,458
(30,514)
297,799
275,839
4,096
4,458
(31,589)
341,726
318,691
The notes on pages 178 to 181 are an integral part of these financial statements. As permitted by Section 408 of the Companies Act 2006,
the Parent Company’s profit and loss account has not been presented in these financial statements. The Parent Company’s loss after tax
for the year was £10.3 million (year ended 31 December 2022: loss of £10.8 million).
These financial statements were approved by the Board and authorised for issue on 5 March 2024. They were signed on its behalf by:
J Hudson
Director
C McLeish
Director
178
Ibstock Plc | Annual Report and Accounts 2023
Company statement of changes in equity
At 31 December 2023
Notes
Balance as at 1 January 2023
Loss for the year
Total comprehensive expense for the financial year
Transactions with owners:
Share based payments
Equity dividends paid
Issue of share capital on exercise of share options
Transactions with owners
Balance at 31 December 2023
At 31 December 2022
Notes
Balance as at 1 January 2022
Loss for the year
Total comprehensive expense for the financial year
Transactions with owners:
Share based payments
Equity dividends paid
Purchase of own shares
Issue of share capital on exercise of share options
Transactions with owners
Balance at 31 December 2022
Share
capital
£’000
4,096
–
–
–
–
–
–
4,096
Share
capital
£’000
4,096
–
–
–
–
–
–
–
4,096
Share
premium
£’000
4,458
–
–
–
–
–
–
4,458
Share
premium
£’000
4,458
–
–
–
–
–
–
–
4,458
Retained
earnings
£’000
341,726
(10,253)
(10,253)
2,308
(34,907)
(1,075)
(33,674)
297,799
Retained
earnings
£’000
383,862
(10,830)
(10,830)
2,547
(33,701)
–
(152)
(31,306)
341,726
Own shares
held
£’000
(31,589)
–
–
–
–
1,075
1,075
(30,514)
Own shares
held
£’000
(1,741)
–
–
–
–
(30,000)
152
(29,848)
(31,589)
Total
equity
£’000
318,691
(10,253)
(10,253)
2,308
(34,907)
–
(32,599)
275,839
Total
equity
£’000
390,675
(10,830)
(10,830)
2,547
(33,701)
(30,000)
–
(61,154)
318,691
The notes on pages 178 to 181 form an integral part of these financial statements.
179
Ibstock Plc | Annual Report and Accounts 2023Additional informationGovernanceStrategic ReportFinancial Statements Notes to the Company financial statements
1. Authorisation of financial statements
The Parent Company financial statements of Ibstock Plc
(the ‘Company’) for the year ended 31 December 2023 were
authorised for issue by the Board of Directors on 5 March 2024
and the balance sheet was signed on its behalf by J Hudson
and C McLeish.
treated as a capital contribution). Any recharge in excess of the
capital contribution is recognised within the Company income
statement. The amount to be recognised over the vesting period
is determined by reference to the fair value of share based payments.
For further details of share based payments, see Note 25 of the
Group financial statements.
Ibstock Plc is a public company limited by shares, which is
incorporated and domiciled in England whose shares are
publicly traded. The Company’s Ordinary Shares are traded
on the London Stock Exchange. The registered office is
Leicester Road, Ibstock, Leicestershire LE67 6HS and the
Company registration number is 09760850.
2. Summary of significant accounting policies
The financial statements have been prepared in accordance with
applicable accounting standards, the Financial Reporting Standard
applicable in the United Kingdom and Republic of Ireland (FRS 102)
and the Companies Act 2006. As a qualifying entity, as defined
by FRS 102, the Company has elected to adopt the reduced
disclosure exemptions set out with paragraph 1.12 of FRS 102,
as described below.
These financial statements are prepared on a going concern basis,
under the historical cost convention.
The Company has not disclosed the information required by
regulation 5(1)(b) of the Companies (Disclosure of Auditor’s
Remuneration and Liability Limitation Agreements) Regulations
2008 as the Group accounts of the Company are required to
comply with regulation 5(1)(b) as if the undertakings included
in the consolidation were a single group.
Going concern
The Directors reviewed detailed cash flows and forecasts
of financial performance and stress-tested the projections.
The forecasts include estimates of trading performance,
operational and capital expenditure and debt requirements
within the period to 30 June 2025.
Despite the net current liability position of the company, the
Company is forecast to be able to meet its liabilities as they fall
due throughout the reviewing period. Therefore, having assessed
the principal risks and all other relevant matters, the Directors
consider it appropriate to adopt the going concern basis of
accounting in preparing the financial statements of the Parent
Company. The Group going concern assessment can be found
in Note 1 of the Group financial statements.
Fixed asset investments
Investments in subsidiaries are included at cost stated at the
historical value at the time of investment less any provisions
for impairment and net of merger and Group reconstruction
relief available.
Share based payments
The Company operates a number of equity-settled share based
compensation plans on behalf of the Group. The fair value of
the employee services received under such plans is capitalised
as an investment in the Company’s subsidiary until such time as
intra-Group recharges are levied by the Company to recover this
cost from its subsidiaries. Upon recharge, the amounts recharged
are treated as a return of capital contribution and recorded as a
credit to equity (up to the value of the initial share based payment
Dividend distribution
Dividend distributions to Ibstock’s shareholders are recognised in
the Company’s financial statements in the periods in which the
final dividends are approved in the Annual General Meeting,
or when paid in the case of an interim dividend.
Financial instruments
(i) Objectives and policies
The Company, in common with its Group subsidiaries, must comply
with the Group’s finance guidelines that set out the principles and
framework for managing Group-wide finances. Further information
on the Group’s policies and procedures is available in the Group
financial statements. The Company does not enter into speculative
treasury arrangements.
(ii) Foreign exchange, credit, liquidity and financial risks
Foreign exchange risk management
The Company primarily transacts in Sterling and therefore
exposure to foreign exchange risk is regarded as low.
Credit risk management
For the Company, this risk arises from cash and cash equivalents
and deposits with banks. This is managed on a Group basis and
there are a number of initiatives underway to mitigate this risk.
These include concentrating activities with a group of banks that
have strong, independently verified credit ratings. For each bank,
individual risk limits are set based on its financial position, credit
ratings, past experience and other factors.
Liquidity planning, trends and risks
The Company has sufficient committed borrowing facilities to
meet planned liquidity needs with headroom, through facilities
provided by the Group.
The Company has adopted IAS 39 for recognition and
measurement of financial instruments.
(iii) Financial assets
Financial assets, including trade and other receivables, loans
to fellow Group companies and cash and bank balances, are
initially recognised at fair value.
Such assets are subsequently carried at amortised cost using
the effective interest method.
(iv) Financial liabilities
Financial liabilities, including trade and other payables and loans
from fellow Group companies, are initially recognised at fair value.
Debt instruments are subsequently carried at amortised cost, using
the effective interest rate method in accordance with IAS 39.
Taxation
Taxation expense for the year comprises current and deferred tax
recognised in the reporting year. Tax is recognised in the profit and
loss account, except to the extent that it relates to items recognised
in other comprehensive income or directly in equity. In this case
tax is also recognised in other comprehensive income or directly
in equity respectively.
180
Ibstock Plc | Annual Report and Accounts 2023 During the ordinary course of business, there are transactions
and calculations for which the ultimate tax determination may be
uncertain. The calculation of the tax charge therefore necessarily
involves a degree of estimation and judgement. The tax liabilities are
based on estimates of whether additional taxes will be due and tax
assets are recognised on the basis of probable future recoverability.
This requires management to exercise judgement based on its
interpretation of tax laws and the likelihood of settlement of tax
liabilities or recoverability of tax assets. To the extent that the final
outcome differs from the estimates made, tax adjustments may be
required which could have an impact on the tax charge and profit
for the period in which such a determination is made.
(i) Current tax
Current tax is the amount of income tax payable in respect of the
taxable profit for the year or prior years. Tax is calculated on the
basis of tax rates and laws that have been enacted or substantively
enacted by the year end.
Management periodically evaluates positions taken in tax returns
with respect to situations in which applicable tax regulation is
subject to interpretation. It establishes provisions where appropriate
on the basis of amounts expected to be paid to the tax authorities.
(ii) Deferred tax
Deferred tax arises from timing differences that are differences
between taxable profits and total comprehensive income as
stated in the financial statements. These timing differences arise
from the inclusion of income and expenses in tax assessments
in periods different from those in which they are recognised
in financial statements.
Deferred tax is recognised on all timing differences at the reporting
date. Unrelieved tax losses and other deferred tax assets are only
recognised when it is probable that they will be recovered against
the reversal of deferred tax liabilities or other future taxable profits.
Deferred tax is measured using tax rates and laws that have been
enacted or substantively enacted by the year end and that are
expected to apply to the reversal of the timing differences.
Share capital
Ordinary Shares are classified as equity. Incremental costs directly
attributable to the issue of new Ordinary Shares or options are
shown in equity as a deduction, from the proceeds.
Related parties
The Group discloses transactions with related parties which are
not wholly owned within the same Group. Where appropriate,
transactions of a similar nature are aggregated unless, in the
opinion of the Directors, separate disclosure is necessary to
understand the effect of the transactions on the Group
financial statements.
Disclosure exemptions
In preparing the Parent Company financial statements, the Company
has elected to adopt the reduced disclosure exemptions set out in
paragraph 1.12 of FRS 102, because the Company prepares Group
consolidated financial statements, as described below:
(a) Under FRS 102 (Section 1.12(b)), the Parent Company is exempt
from the requirements to prepare a cash flow statement on the
grounds that its cash flows are included within the Ibstock Plc
Group consolidated financial statements.
(b) The Parent Company is a qualifying entity and has taken
advantage of the exemption from disclosing key management
compensation (other than Directors’ emoluments) under
FRS 102 (Section 1.12(e)), as it is a Parent entity whose
separate financial statements are presented alongside
the consolidated financial statements, which contain
the requisite equivalent disclosures.
(c) The Parent Company is a qualifying entity and has taken
advantage of the exemption from disclosing certain financial
instrument disclosures under FRS 102 (Section 1.12(c)), as it
is a Parent entity whose separate financial statements are
presented alongside the consolidated financial statements,
which contain the requisite equivalent disclosures.
(d) The Company has elected to avail itself of the disclosure
exemption within FRS 102 (Section 1.12(d)) in relation to
certain share based payment disclosure requirements as it
is a Parent entity whose separate financial statements are
presented alongside the consolidated financial statements,
which contain the requisite equivalent disclosures.
(e) The Company has taken advantage of the reduced
disclosure exemption under FRS 102 (Section 1.12(a))
and is not required to follow the requirements of paragraph
4.12(a)(iv) of FRS 102 and as such only discloses a reconciliation
of shares outstanding between the beginning and end of the
year and not the prior year.
In addition, the Company has taken the exemption within Section
33 of FRS 102 from disclosing intra-Group transactions with wholly
owned subsidiaries.
Critical accounting judgements and estimation uncertainty
In applying the Company’s accounting policies, as described
above, the Directors are required to make judgements (other
than those involving estimations) that have a significant impact on
the amounts recognised and to make estimates and assumptions
that affect the reported amounts of assets, liabilities, income and
expenses. Due to the inherent uncertainty in making these critical
judgements and estimates, actual outcomes could be different.
There are no critical accounting judgements or estimates were
made in applying the Company’s accounting policies in current
and prior year.
3. Employee information
The Company has no employees. Non-Executive Directors of the
Company are employed under letters of appointment. Full details
of Executive and Non-Executive remuneration is disclosed in the
Annual Report on Remuneration on pages 99 to 116. For further
details of Directors’ remuneration, refer to Note 7 of the Group
financial statements.
181
Ibstock Plc | Annual Report and Accounts 2023Additional informationGovernanceStrategic ReportFinancial Statements Notes to the Company financial statements continued
4. Fixed asset investments
Cost
At 1 January 2022
Additions – fair value of share incentives issued to Group employees
At 31 December 2022
Additions – fair value of share incentives issued to Group employees
At 31 December 2023
The Company holds 100% of the issued share capital of Ibstock Building Products Limited.
5. Debtors
Amounts owed by subsidiary undertakings
Deferred tax asset
Other tax asset
Prepayments and other debtors
Amounts owed by subsidiary undertakings are unsecured, repayable on demand and interest free.
6. Creditors – amounts falling due within one year
Trade creditors
Amounts owed to subsidiary undertakings
Borrowings
Accruals and other creditors
Corporation tax
Investment in
subsidiary
undertakings
£’000
625,581
975
626,556
1,493
628,049
31 December
2023
£’000
8,164
258
–
413
8,835
31 December
2022
£’000
2,925
267
2
1,881
5,075
31 December
2023
£’000
258
230,651
25,496
3,662
2,273
262,340
31 December
2022
£’000
318
208,301
436
4,344
72
213,471
Amounts owed to subsidiary undertakings are unsecured, repayable on demand and interest free. The Group has a cash pooling
arrangement with its transactional bank.
7. Creditors – amounts falling due after more than one year
Borrowings
31 December
2023
£’000
98,992
98,992
31 December
2022
£’000
99,769
99,769
In November 2021, the Company issued £100 million of private placement notes to Pricoa Private Capital, with maturities of between
seven and twelve years and an average total cost of funds of 2.19% (range 2.04% – 2.27%).
Additionally, at the same time the Company entered into a £125 million Revolving Credit Facility (RCF) provided by a syndicate of five
banks for an initial four-year period, with a one-year extension option, which has been enacted. At 31 December 2023, the Group had
drawn £25 million (2022: £nil) under this facility.
Further details of the Private Placement and RCF are provided in Note 18 of the Group financial statements.
The carrying value of financial liabilities have been assessed as materially in line with their fair values, with the exception of £100 million
of private placement notes. The fair value of these borrowings has been assessed as £88.3 million (2022: £86.4 million).
No security is currently provided over the Company’s borrowings.
182
Ibstock Plc | Annual Report and Accounts 2023 8. Financial instruments
The Company has the following financial instruments:
Financial assets that are debt instruments measured at amortised cost:
Amounts owed by subsidiary undertakings
Cash and bank balances
Financial liabilities measured at amortised cost:
Trade creditors
Amounts owed to subsidiary undertakings
Borrowings
Accruals and other creditors
Loans and receivables
31 December
2023
£’000
31 December
2022
£’000
8,164
287
8,451
2,925
300
3,225
Loans and payables
31 December
2023
£’000
31 December
2022
£’000
258
230,651
124,488
3,662
359,059
318
208,301
100,205
4,344
313,168
In the current and prior year there are no material differences between the fair values and the book values stated above with the
exception of £100 million of private placement notes within borrowing. The fair value of these borrowings is assessed as £88.3 million
(2022: £86.4 million), which was determined using discounted cash flows based on observable market data.
9. Called-up share capital
Number of
shares
Share
capital
£’000
Issued, called-up and fully paid:
At 1 January 2023 and 31 December 2023
Ordinary Shares of £0.01 each
409,631,594
4,096
There was no share capital movement in the current and prior year.
10. Contingent liabilities
The Company has guaranteed all Group bank borrowings as detailed in Note 18 of the Group financial statements. As part of the Group’s
joint and several liability, the Company is a party to the guarantee of the Group’s VAT liability.
11. Related party transactions
The Company is exempt from disclosing related party transactions with other companies that are wholly owned within the Group.
See Note 29 of the Group financial statements.
The ultimate Parent Company and the smallest and largest group to consolidate these financial statements is Ibstock Plc.
Share awards to key management personnel resulted in an amount of £0.5 million in the year ended 31 December 2023 (year ended
31 December 2022: £1.0 million), which has been taken to the fixed asset investment. See Note 25 of the Group financial statements
and the Directors’ Remuneration Report on pages 99 to 116 for further details of share based payments.
12. Post balance sheet events
A final dividend of 3.6 pence (2022: 5.5 pence) per Ordinary share is proposed in respect of the financial year ended 31 December 2023.
See Note 31 of the Group financial statements.
See Note 32 of the Group financial statements for details of other post balance sheet events.
183
Ibstock Plc | Annual Report and Accounts 2023Additional informationGovernanceStrategic ReportFinancial Statements Group five-year summary
Results summary
Continuing operations
Revenue
Adjusted EBITDA1
Exceptional items1 impacting EBITDA
Depreciation and amortisation
Operating profit/(loss)
Exceptional finance costs
Net finance costs
Year ended 31 December
2019
2020
2021
2022
2023
409,257
316,172
408,656
512,886
405,839
122,265
(2,833)
(35,409)
84,023
52,122
(35,257)
(36,477)
(19,612)
103,053
5,230
(38,349)
69,934
139,667
6,278
(38,518)
107,427
107,357
(30,762)
(41,564)
35,031
–
(2,032)
(414)
(3,914)
–
(4,992)
–
(2,663)
–
(4,964)
Profit/(loss) before taxation
81,991
(23,940)
64,942
104,764
30,067
Taxation
(15,516)
(4,081)
(33,129)
(17,884)
(9,007)
Profit/(loss) from continuing operations
66,475
(28,021)
31,813
86,880
21,060
Profit/(loss) from discontinued operations
(383)
–
–
–
–
Profit/(loss)
Profit/(loss) attributable to owners of the Company
Profit/(loss) attributable to non-controlling interest
66,092
66,092
–
(28,021)
(28,021)
–
31,813
31,813
–
86,880
86,908
(28)
21,060
21,060
–
Employment of capital
Goodwill and intangible assets
Property, plant and equipment
Right-of-use assets
Non-current assets
Inventories
Receivables
Current tax recoverable
Assets held for sale
Current assets
Payables
Lease liabilities
Other liabilities excluding debt
Net assets excluding pension and debt
Net debt1
Pension
Derivative financial instruments
Total net assets
Called-up share capital
Reserves
Equity attributable to owners of the Company
Equity attributable to non-controlling interest
Total equity
2019
102,594
386,255
30,479
519,328
84,327
58,088
–
1,186
143,601
(88,150)
(30,361)
(83,922)
460,496
(84,851)
88,656
–
464,301
4,093
460,208
464,301
–
464,301
2020
95,163
371,395
26,653
493,211
63,386
58,906
–
1,186
123,478
(85,423)
(29,076)
(78,711)
423,479
(69,184)
43,576
–
397,871
4,096
393,775
397,871
–
397,871
At 31 December
2021
94,625
375,800
25,114
495,539
72,821
64,756
3,199
875
141,651
(103,132)
(27,184)
(102,527)
404,347
(38,872)
57,754
–
423,229
4,096
419,133
423,229
–
423,229
2022
90,242
409,091
31,478
530,811
94,275
65,935
1,717
–
161,927
(120,003)
(33,104)
(93,261)
446,370
(45,922)
15,194
567
416,209
4,096
412,062
416,158
51
416,209
2023
82,017
440,400
39,831
562,248
119,189
37,919
1,171
–
158,279
(80,526)
(43,833)
(105,493)
490,675
(100,616)
9,832
(24)
399,867
4,096
395,771
399,867
–
399,867
1 Alternative performance measures are described in Note 3 to the consolidated financial statements.
184
Ibstock Plc | Annual Report and Accounts 2023 Business ratios
Adjusted EBITDA1 margin
Interest cover (times)
Net debt to adjusted EBITDA1
Return on capital employed1
Adjusted operating cash flow1, (£m)
Capital expenditure (£m)
Adjusted free cash flow1,2 (£m)
Statutory basic earnings per share
Adjusted basic earnings per share1
Interim dividend per share
Final dividend per share
Supplementary dividend per share
Total dividend per share
Closing share price
Closing market capitalisation (£m)
2019
29.9%
37x
0.74x
19.3%
72
(39)
33
16.3p
18.3p
3.2p
–
5.0p
3.2p
315p
1,289.3
2020
16.5%
10x
1.53x
3.7%
50
(24)
26
(6.8p)
4.0p
–
1.6p
–
1.6p
207p
846.2
At 31 December
2021
25.2%
21x
0.41x
15.8%
76
(25)
51
7.8p
13.9p
2.5p
5.0p
–
7.5p
204p
834.8
2022
27.2%
51x
0.35x
23.5%
108
(58)
49
21.4p
22.7p
3.3p
5.5p
–
8.8p
154p
630.8
2023
26.5%
29x
1.06x
13.4%
50
(65.7)
(16)
5.4p
13.9p
3.4p
3.6p
–
7.0p
152p
594.0
1 Alternative performance measures are described in Note 3 to the consolidated financial statements.
Cautionary Statement
This Annual Report and Accounts has been prepared for, and only for, the members of the Company, as a body, and no other persons.
The Company, its Directors, employees, agents or advisors do not accept or assume responsibility to any other person to whom this
document is shown or into whose hands it may come and any such responsibility or liability is expressly disclaimed. By their nature,
the statements concerning the risks and uncertainties facing the Group in this Annual Report and Accounts involve uncertainty, since
future events and circumstances can cause results and developments to differ materially from those anticipated. The forward-looking
statements reflect knowledge and information available at the date of preparation of this Annual Report and Accounts and the Company
undertakes no obligation to update these forward-looking statements. Nothing in this Annual Report and Accounts should be construed
as a profit forecast.
185
Ibstock Plc | Annual Report and Accounts 2023Additional informationGovernanceStrategic ReportFinancial Statements Shareholder Information
Group Company Secretary
Becky Parker
Registered office
Leicester Road
Ibstock
Leicestershire
LE67 6HS
United Kingdom
Tel: +44 (0)1530 261 999
Company registration number
09760850
Auditor
Deloitte LLP
Four Brindleyplace
Birmingham
B1 2HZ
Joint corporate brokers
UBS AG London Branch
5 Broadgate
London
EC2M 2QS
Peel Hunt LLP
100 Liverpool Street
London
EC2M 2AT
Financial PR
Citigate Dewe Rogerson
8th Floor
Holborn Gate
26 Southampton Buildings
London WC2A 1AN
Registrar
Link Group
Central Square
29 Wellington Street
Leeds
LS1 4DL
0371 664 0391
From overseas call +44 (0)371 664 0391.
Calls are charged at the standard
geographical rate and will vary by provider.
Calls outside the United Kingdom will be
charged at the applicable international rate.
Open between 09:00–17:30, Monday to Friday
excluding public holidays in England and Wales
or email Link at shareholderenquiries@linkgroup.co.uk.
Website
www.ibstock.co.uk
Analysis of shareholders – 31 December 2023
2023
1-1,000
1,001–5,000
5,001–10,000
10,001–50,000
50,001–Highest
Total
Holder type
Individuals
Nominee and institutional investors
Total
186
Number of
holdings
345
328
83
124
221
1101
Number of
holdings
715
386
1101
%
31.34
29.79
7.54
11.26
20.07
100
%
64.94
35.06
100
Balance as at
31 December 2023
110,768
755,221
612,572
2,776,069
405,376,964
409,631,594
Balance as at
31 December 2023
1,892,017
407,739,577
409,631,594
%
0.03
0.18
0.15
0.68
98.96
100
%
0.46
99.54
100
This report is
Consultancy, design and production
www.luminous.co.uk
printed on 100%
recycled paper,
which is certified
carbon balanced by
World Land Trust Ltd.
Design and production
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Ibstock Plc | Annual Report and Accounts 2023 187
Ibstock Plc | Annual Report and Accounts 2023 188
Ibstock Plc | Annual Report and Accounts 2023 Ibstock Plc
Leicester Road
Ibstock
Leicestershire
LE67 6HS
United Kingdom
+44 (0)1530 261 999
ibstock.co.uk