Good morning, everyone. Nice to see everybody.

Great. Good morning and welcome to Ibstock's 2025 full-year results presentation.

Joining me today is Simon Bedford, our interim CFO. Turning to the agenda: after I provide an overview and market context, Simon will walk us through the financials and cover divisional performance.

I'll then focus on how we're thinking about shareholder value creation, specifically through the lens of five strategic drivers. Having covered the summary and outlook, Simon and I will then be very happy to answer your questions.

Turning first to the overview. As you'll know, 2025 was a tough year.

We started well with strong volume growth in the first half, coming mainly from new build residential demand. Market uncertainty in the second half resulted in progressively tougher conditions.

Revenues for the group increased by 2% to £372 million, with EBITDA at £71 million, in line with the guidance issued in Q4 '25, but a reduction of around 10% versus '24. Despite the challenges in the market, this is a business that does not stand still, and I'm proud of the progress our teams have made at our major investment projects at Atlas and Nostell, both of which are now coming to their conclusion.

At the same time, we've taken decisive action on costs and flexed capacity where needed. We've also remained disciplined in how we allocate capital.

In Q4, we made the decision to dispose of our Forticrete roofing sites, and we've now completed a number of land disposals, releasing about £30 million of capital. With major capex programs largely complete, volume recovery and continued opportunities to release capital from our land bank will lead to an acceleration in free cash flow.

This will provide optionality on growth opportunities and shareholder returns as we move forward. Before handing over to Simon and to provide a bit more context on our financial results, I'd like to recap on how our markets developed in 2025.

As we entered 2025 with market momentum continuing from Q3 in '24, we took steps to reactivate network capacity to meet the recovering demand. There was promising double-digit growth volume in the first two quarters, followed by a deceleration to 4% growth in quarter three.

As you can see from the chart, the final three months were challenging, with brick volumes actually falling by 2% year-on-year. Ultimately, with the initial momentum proving a false dawn, our capacity moved ahead of demand, and looking back, I acknowledge that we went too early on this.

Given the progressively tougher market demand dynamics in the third quarter, we readjusted capacity and acted on costs, which will position us better for the near term. Overall in 2025, the total brick market grew 6% to 1.83 billion, and encouragingly, our market share was ahead of the market and ahead of the prior year.

With that context, let me now hand you over to Simon to go through the financials.

Thanks, Joe, and good morning. Turning to cover the financial summary, with Joe having already covered detail on our revenue and adjusted EBITDA performance, I will focus on the three key metrics.

Looking first at our EBITDA margin, this has reduced by 260 basis points to 19.1% as a result of inflationary pressure and increased costs as capacity is reactivated in clay. In addition, we experienced adverse product mix with lower volumes in higher-margin concrete categories of rail and infrastructure.

EBITDA margin improved in H2 to around 20% as incremental costs from bringing capacity back tapered and also decisive cost management started to kick in. Now considering the balance sheet strength, although leverage has increased marginally from a year ago to 2 times, net debt of £120 million has reduced both marginally from last year and significantly from the June position despite the trading environment.

This is a result of our disciplined approach to capital allocation and a focus on priority markets, generating around £30 million of proceeds through the disposal of non-core assets. Return on capital employed, at 5.8%, remains well below our targeted level and reflects recent capital invested in both core and diversified platforms, combined with earnings that continue to be impacted by markets well below normalized levels.

With recovering market demand, combined with anticipated returns from our growth investments, we expect return on capital employed to revert to our targeted level of at least 20% over the medium term. Finally, the board has recommended a final dividend of 1.5 pence, bringing the total dividend to 3 pence, which is a payout ratio of 53%, in line with the prior year.

We set out on this slide group revenues compared to the comparative figures in 2024. Group revenue for the year was up 2% to £372.1 million.

Within this context, clay revenues increased by 5% to £260 million, driven by strong new build growth in H1, with H2 flat year-on-year. However, these numbers mask the contrast between the quarters as the year progressed, which I won't go through again.

However, we also saw regional variation, with growth more concentrated in the Midlands and the North, with the London and South East markets more subdued. Futures delivered revenues of £9 million compared to £10 million in the prior period as a result of our glass reinforced concrete business being closed in Q1 2025.

Concrete revenue of £117 million was 5% below the comparative period, largely as a result of the weakness in the UK rail infrastructure market. Turning to cover the divisional financial performance in more detail, starting with the clay division.

As already seen, the clay division delivered a resilient performance against a tough market backdrop. We saw growth in wire cut bricks, which are favored in new build housing markets, whilst demand for our soft mud bricks, which are more exposed to RMI and specification markets and more concentrated in the South East and London regions, was more muted.

A more competitive environment constrained pricing, which together with a negative shift in sales mix, led to average pricing slightly below the comparative period. We took the decision to reactivate parts of the clay factory network during the first half of 2025, and whilst this has led to higher-than-expected incremental costs in the period, we saw these costs taper in the second half.

This, combined with the cost actions taken, meant margins improved in H2. The facades product categories within Ibstock Futures moved forward with broad-based growth across the portfolio.

We expect EBITDA to build from 2027 after a year of ramp-up in 2026 as our major investment in Nostell starts to deliver positive returns. Turning to cover concrete.

Here revenues decreased by 5% to £112 million. Overall residential new build sales volumes were tempered by lower growth in the RMI market and falling infrastructure sales volumes, as the UK rail infrastructure markets continue to be impacted by control period spending constraints.

Similar to clay, we saw strong volume growth in many of the residential product categories in H1, partly offset by lower infrastructure volumes. In H2, market uncertainty resulted in progressively tougher conditions, with flooring and infrastructure categories particularly affected.

Sales pricing in the residential categories mirrored the market dynamics seen in the clay brick division. It is important to note that spending in the UK rail network has reduced to historically low levels.

We have seen some pick-up recently, but this constitutes a high-margin part of the concrete division, adversely impacting both mix and profitability. Whilst EBITDA margins remain well below historic levels achieved within our concrete business, as markets recover, we believe the division is well positioned to benefit, with strong growth in both volumes and margin over the medium term.

Moving now to cover cash flow performance. Inventory levels grew as demand weakened in the second half of the year, resulting in a net working capital outflow of around £14 million.

Capital expenditure was in line with last year, with £21 million on growth projects and around £24 million on sustaining spend. With major capital expenditure programs largely complete, we expect total capex to fall to around £25 to £30 million in 2026.

It is important to note that the non-core disposals of around £30 million proceeds are treated as exceptional and are therefore not included in the adjusted free cash flow. Moving to the balance sheet.

Net debt reduced marginally to £120 million by the year end, resulting in a leverage of 2 times, up on the prior year. The group has £225 million of committed borrowings, comprising the £100 million private placement loan notes and a £125 million revolving credit facility, which we successfully refinanced in Q4 at improved terms.

These borrowings contain leverage covenants of no greater than 3 times, tested semi-annually. Based on the covenant definition, leverage at the 31st of December 2025 totaled 1.7 times, and the group had over £100 million of available liquidity.

I will now outline the refinements we've made to our capital allocation framework to better reflect our choices for excess cash after considering balance sheet strength, organic investment considerations, and dividends. This shows the balanced choice between inorganic investment and shareholder returns in accordance with our strategic and financial investment criteria, and they are, of course, not mutually exclusive.

With our major capital expenditure programs now largely complete, a high cash drop-through on incremental volumes, and strategic options which Joe will discuss later, this will provide significant optionality with respect to excess cash and capital allocation. For those looking for the technical guidance for 2026, this is now included in the appendix, with Joe covering how we see 2026 developing in the summary and outlook section.

With that, Joe, I'll hand back to you.

Thanks, Simon. Turning now to our market drivers and strategic progress.

As set out on the screen, we see continuing shareholder value creation being built around these five clear strategic levers. You can see here that our leadership in our core markets remains key and has significant bearing on our financial performance.

However, crucially, the remaining four levers are more within our control and are already driving progress through new market sectors, product innovation, operational efficiencies, and the strategic value embedded in our land and clay reserves. This unique balance gives us resilience today and will be important in underpinning our midterm targets.

I'll now walk through each in turn. With a 200-year heritage, we enjoy a leadership position in our core markets, and over recent years, we've deliberately brought our brands, people, and capabilities together under a single unified Ibstock.

That wasn't a branding exercise; it was about how we show up for our customers. Today, that leadership position allows us to support customers across clay, concrete, and specialist building products, alongside our design and technical services, supporting national and regional housebuilders, the RMI market, and increasingly infrastructure and non-residential applications.

I've talked in the past about engaging with customers across multiple categories, and that shift has picked up momentum in the last 18 months, as both national and regional customers have seen the breadth of our offer and our technical capabilities. Looking ahead, we also see clear opportunities to grow in the 10% infrastructure and other sectors, where our capabilities, assets, and relationships position us well.

That sector represents a significant share of the overall construction market, where we are underrepresented today, and it is a space that lends itself to innovation in new products and new solutions. I'll give more details on this later.

Before I come on to the other four areas, let's look at those core markets and what we're seeing on the ground. At a structural level, the long-term fundamentals that underpin demand in these housing and RMI markets remain firmly intact.

The UK continues to face a significant housing shortage. Household formations have been outstripping housebuilding for years, and we've an aging housing stock that requires ongoing investment and renewal.

Demand for social and affordable housing remains strong, supported by promising new funding allocations. Against that backdrop, we're starting to see some more supportive signals emerging.

Inflation is easing from its peak, and expected mortgage rate cuts should, over time, help improve confidence. Government reforms and planning initiatives are also welcome steps.

However, the pace of delivery and affordability, especially for the first-time buyer, are major issues. We're set to have a third year below 150,000 housing starts, way off the run rate of getting to 1.5 million homes.

Even where starts are improving, build-out rates remain firmly controlled. Housebuilders are prioritizing cash and aligning build programs to sales rates.

As a result, we continue to take a cautious view in the near term, with industry forecasts, including those from the CPA, pointing to a continued subdued market conditions over the short term, and that remains consistent with what we're seeing. However, the market will turn at some point, and importantly, we don't need to get to 300,000 housing starts to see a material improvement for our business.

As a reminder, the UK brick fully installed capacity is around 2.1 billion, even when we get close to this range, which equates to around 170,000 housing starts, we'll see a big improvement in industry utilization levels. This slide shows why we're well placed to capture volume recovery by looking at our clay capacity evolution.

As you can see on the slide, we break out the total network into three components: volumes manufactured in the period, further active capacity available—that's incremental volumes available through higher push rates or increasing shift patterns—and finally, inactive capacity, where capacity is mothballed or idled. As we've outlined, the progressively tougher market conditions we saw in 2025 meant we built inventory, and therefore in 2026, we'll be actively managing production and inventory.

This will give a margin headwind, but benefits overall cash flow generation. We've done that by adjusting soft mud capacity at our Leicester sites, which have much more operational flexibility.

However, our active clay network gives us the ability to ramp up by more than 20% with very low-cost additions, and therefore compelling drop-through to the bottom line. With this network and stock levels, we're very well positioned to capture the upside as the market conditions improve.

Outside of our core market exposure, there's significant medium-term opportunity in other construction market sectors. Ibstock is increasingly aligning with three growth market sectors: infrastructure, social and affordable housing, and mid- to high-rise buildings that require cladding remediation.

We're doing this by developing tailored sector solutions, broadening both our existing and new product ranges, and working directly with the contractors delivering these major projects. The challenge is well understood that the UK is underinvested in recent years in schools, hospitals, and public sector buildings, and that's why the government's 10-year infrastructure strategy includes an identified £725 billion pipeline covering work in departments such as the MoD, Department of Education, and Ministry of Justice.

Now that's not just theoretical opportunity for us. Over the last 12 months, we've undertaken additional product testing and assurance to enable delivery into these programs.

That includes testing new products for the MoD's £3 billion a year work program, as well as other key public sector customers, including the £15 billion schools capital investment program. Around half of the £39 billion in social housing is expected to be delivered through Homes England land.

Housing associations are partnering with developers to unlock wider schemes, and we're already seeing this translate into activity. For example, we've received initial orders on a regeneration project in Birmingham, a £1 billion long-term master plan that will ultimately deliver about 3,500 homes.

In addition, challenges around the cladding remediation and the Building Safety Act requirements are creating new opportunities where Ibstock is exceptionally well positioned. Our high-quality, high-performing products in both our established ranges as well as the new innovations coming through at Nostell directly support safe, compliant, and even more sustainable construction.

With that context, let me move on to our new product development pipeline and investment, and how that positions us for future growth. You can see on the screen that over the last eight years, an increasing proportion of our revenue now comes from new and sustainable products.

This creates real value for our customers and helps sustain our margins. By working closely with our key customers, it's important to understand their strategic priorities, whether it's speed of build, low carbon, design flexibility, or efficiency, and we focus our innovation on helping them to deliver against those aims.

Alongside our major strategic projects, we continue to strengthen and modernize our core clay and concrete product ranges through continuous product development and performance improvements. Today, I'll just focus on the Nostell redevelopment and on Fastwall, which you'll have seen in the opening video.

Fastwall has been designed to support both existing and new markets. For existing customers, particularly housebuilders investing in panelized construction and timber frame, it delivers higher productivity and reduced weight, both critical drivers for customers adopting modern methods of construction.

Alongside Fastwall, our new ceramic facades facility at Nostell is creating a further wave of innovation, delivering new facade solutions with a greatly expanded architectural range and almost unlimited design flexibility. It's the first facility of its kind to bring all of these things together in one place, and an initial customer interest has been really positive.

We see these solutions as complementary, not competing with our core products. If there are skill gaps to meet the challenges of growing construction targets, this will be part of the answer.

To fully appreciate it, you have to really see it in operation, and we look forward to hosting another factory event similar to the one we did in Atlas last year, and we'll share more details about that soon. Moving now to focus on our factory estate.

Over the last eight years, and as already alluded to, we've invested more than £325 million across our clay and concrete manufacturing network, creating a safer, more automated, more efficient, and lower-cost estate. The Atlas factory is the latest of these investments and will add 105 million bricks per year at full capacity, strengthening reliability, reducing cost, and delivering the same high-quality, high-performing, but more sustainable products the way that we manufacture today.

In addition, having done two capital investment projects in our concrete division recently, we see further options to invest in process automation to reduce cost. These projects are relatively capital-light, with quick payback.

Our new multi-year operational excellence program is also well underway at our pilot factory at Aldridge, and will drive further competitive advantage, improving operational performance and strengthening our ability to service our customers. A more efficient, modernized asset base positions us for higher margins, stronger cash generation, and greater operating leverage as the market recovers.

You'll see me reference this later, as the network efficiencies are a key underpin for our midterm targets. Moving on now to look at our fifth strategy lever, which delivers further optionality and centers on our land and clay reserves.

To give some context, we manage over 2,700 acres of land across the UK, spanning our factory estate, clay quarries, and significant natural estate. From an Ibstock perspective, a large part of this asset base is not fully utilized.

We then have options to drive value through three complementary routes. Firstly, calcined clay commercialization.

This is now a proven low-carbon cementitious replacement capable of materially reducing embodied carbon when used in blended cements and concrete. You'll know we've been exploring the commercialization of calcined clay at scale, turning an existing asset into a strategic growth option.

I'm pleased to confirm that commercial discussions with a preferred partner to get to an agreement is well advanced, and we expect to share a further update on this the half year. Secondly, as noted before, our disciplined land disposal program will ensure capital is released where land no longer supports long-term strategic or operational priorities.

To that end, we expect to generate £20 to £30 million in the next three to five years. Thirdly, the expansion of our existing land-based income streams.

Our land already generates material long-term revenue alongside core manufacturing, with land-based income from quarry restoration through landfill delivering approximately £2 to £3 million per year. This demonstrates the commercial value of well-managed non-operational land.

Taken together, these three routes create a diversified platform for value creation. To conclude, these five levers together define our value creation strategy.

While market conditions will continue to influence near-term performance, the actions were taken across these levers are firmly within our control. In 2026, we're focused on the execution of our customer experience work, expanding into new market segments, progressing operational excellence, including the pilot at our Aldridge site, fully commissioning Nostell, and finalizing our calcined clay project.

Bringing that all together. As you can see on this slide, we have the potential for significant earnings growth over the coming years.

As I've said, to a large extent, this will be driven by a market recovery, but it will also be supported by our market-independent initiatives, including the points we've made today. We remain confident that a revenue target of £600 million when markets recover to historic levels is achievable.

This should drive margins up from 19% today to 28% in the future. These dynamics should ensure strong earnings growth in the years ahead.

As Simon has said earlier, the improved cash flow from improved earnings, the strategic land disposal program, and lower capital investment will provide more optionality for value creation for shareholders. Finally, taking a look at the outlook.

After a weather-impacted start to 2026, near-term demand remains challenging. We expect modest year-on-year volume growth in H2 2026, with volume recovery in new build and RMI markets dependent on activity gaining momentum in the spring.

Price increases implemented in February 2026 should enable us to offset anticipated cost inflation for the year. Although the timing of the market recovery is uncertain, we're confident that the long-term market fundamentals are intact.

Therefore, with a well-invested, lower-cost, more efficient, and sustainable network, we expect to benefit from meaningful operational leverage and cash generation across the business. With that said, Simon and I will be happy to take your questions.

If you could state your name and institution before asking the questions.

Thanks. Morning, Aynsley Lammin from Investec.

Just two from me, please. On the production and kind of management and stock level management for this year, maybe if you could elaborate on that a bit more, where stock levels are, where you'd like them to be, and would you be kind of thinking of mothballing any plants or is it just stopping production and therefore that's why you get the kind of margin headwind?

Then secondly, I guess just on the energy side, I think you saw that 80% hedged, when does that become a concern if tensions in the Middle East continue and natural gas prices remain elevated? Are you pretty confident for the next six, nine months, for example?

Yeah. Look,

we will be managing stock this year quite carefully. We're not anticipating to mothball any other sites at this stage.

We've got part of the reason for the sort of headwind on the margins is the overhead recovery. We've got more shutdowns, you just don't get the leverage.

We produced around 40 to 50 million bricks more than we needed at the end of last year, we're going to manage that carefully this year. Obviously, we've got stockyards are limited as well, we've done this obviously, we've had a bit of a pattern of this in the last few years, we sort of know how to do things, and I think we're well positioned.

The main thing is if the market comes back faster, we can respond very, very quickly. Energy, do you want to take energy, Simon?

Energy, yeah. In terms of energy, we've said in the statement we're about 80% hedged.

That is actually more front-end loaded, the first three quarters we're hedged higher than that, really we're more exposed in Q4. We don't see at the moment an issue with that, and we have other options when we actually get to Q4.

Yeah. Okay.

Thank you. Priyal Woolf here from Jefferies.

I've just got two questions. Firstly, you've talked about price increases, I think, from February.

I think one of the issues we've had in previous years is different players going at different times and sort of having to reverse on that. Do you have any color on whether the magnitude and the timing across the market has been fairly consistent so far this year?

Then the second question is just the whole shift from soft mud to wire cut last year. Do you think that's done, or is there sort of more to go as an incremental headwind?

Thank you.

Good. I think we're in a better place this year, for sure, on pricing.

Last year was difficult. People went at different times, and—and frankly, it didn't stick.

This year, most of the industry went in February, the 1st, and we think that there's there's been a lot more discipline in in that approach. We we're confident that we can cover inflation this year with our price increases, around sort of 3%-ish margins.

Then soft mud wire cut dynamics. Obviously, as you had greater new build residential growth last year and more subdued RMI, there was a mix shift, probably about the industry is about 70% wire cut, 30% soft mud.

We're obviously We're obviously great have a greater weighting towards soft mud ourselves. I don't think that's a a long-term structural change.

I think it's largely because of the fact that the RMI market's subdued, and the South East and London are very, very weak. I think I think, as I said earlier on, you've got an industry that's only can only when it's when all the mothballed capacity is back on, you can only produce 2.1 billion bricks anyway, all of the brick capacity will be used, soft mud and wire cut in the UK.

Over there. Who was next?

Clyde Lewis at Peel Hunt. I think I've got four, apologies.

I'll do them one at a time. Could you update us as to where you think sort of merchant levels are in terms of sort of brick stocks?

Second one, again, would be useful to get an update on imports as to what you're seeing on that front. Third was on, I suppose, Ibstock Futures and slips within that as to how you're seeing the market develop for those products, and particularly the slips, how much activity is going on there with architects and designers in particular.

Then the last one was on rail. Obviously, a tough year last year.

How does the rail outlook look for 2026?

I'll let you take the rail one. Merchant stocks at the moment, I think, are quite healthy.

Merchants, most merchants that we talk to are managing their balance sheets carefully, and they know they can call on stocks from the manufacturers when needed. I'd say they're not overstocked.

There's a normalized stock level at the moment, but certainly not stocking up at this stage. Imports last year were about 350 million, they actually if we went ahead by about 8%, the imports went ahead by a little bit more than that.

Actually, if you look at import brick levels, they're quite consistent. They're about 19%.

I think they went to about 22% in 2022, but they've been about 18 to 19% consistently. We do need imported bricks when the market comes back, and I think a lot of importers, including a major player here, has mothballed a bit of capacity and has got a pan-European strategy, are bringing a bit more of the bricks in still.

Obviously, they're still quite sticky. They want to maintain a position, and there's not much going on in Europe, they've been a little bit more competitive last year.

I think we're excited about the growth in slip systems, ceramic facade systems. It's still coming from a low base, but the CAGR is very good.

The growth is very good. Whether it's mechanical rainscreen buildings, high-rise going up, whether it's panelized construction, volumetrics with bricks going on the outside, or whether it's some of the stuff like Fastwall we alluded to there on, there's a lot more change in that.

We see our own, this year we expect about a 40% uplift in our volumes, and in 2 to 3 years' time, we expect that to triple. I think this year at Nostell, obviously we're commissioning the factory.

There's a longer lead time for these products because they're specified and their systems, they have to be tested, and there's a specification period from the time it's signed up by the developer and the architect to when it actually a project gets delivered. It's not like a brick just going off the yard, there's a bit of a lead time there, which is probably about, I'd say, 8 to 12 months.

We're excited about it. That's why we're invested in it.

We think it's not going to cannibalize our core business. We think these products are going to be what brings additionality to get you to the higher build rates that we need to do given the skill shortages.

We think there's room for both the cavity wall and traditional building as well as some of these new systems. We're very excited.

The infrastructure sector as well is very excited by them. They're more open to sort of faster change, we're working with a lot of the big contractors, infrastructure people.

Rail?

If I just pick up rail. We've suffered with rail volumes over the last few years.

We've reached a historical low level in 2025. We have seen recent data points which suggest that is actually turning, and therefore we would expect some growth in 2026.

It's off a low base, but is also a high-margin business for the concrete business.

Hi. Robert Chantry at Berenberg.

Thanks for the presentation. Just three questions from me.

Firstly, on on the concrete business, could you just give us an update on the weighting towards the different subdivisions within that and that the margin profile, i.e., kind of what are we actually taking? Have you on in the next two to three years around what's going to drive a recovery there?

Secondly, affordable housing. I know a lot of the contractors have talked about building up big mixed-use development pipelines, looking at affordable housing as a huge driver the next few years.

Some of the contractors this week, last week saying it's been quite slow, but it's starting to pick up. Just what's your kind of on-the-ground experience of affordable housing build rates dynamics?

Then thirdly, obviously the South East London market's been exceptionally weak in terms of new starts and volume, a lot of discussion around gateway, other planning type of regulation. Again, can you give us some on-the-ground insight around around, quite the bottleneck there from your point of view and if that is looking to be released at any point?

Thank you.

Good. Our concrete business has got quite diversified.

As we divested the roofing business. That was a relatively small part and lower market share, but we have leading positions in most of our other categories.

We have walling stone, which is a reconstituted sort of natural stone that goes into a lot of areas, reasonably good margins there, double-digit margins. We've got a leading fencing and building business, landscaping business, with very, very good margins.

We've got rail and infrastructure business, which has suffered, but again is very high margins with leading positions. What else have we got, Simon?

I think that covers it.

That's the main focus of it. We've got a large flooring business, we've got about 25% market share of the flooring business.

We think that when you put the concrete business with some of the brick business, we're seeing a lot more uptake from especially contractors and people interested in these big infrastructure projects, schools, prisons, hospitals, because we can do hollowcore floors, we can do the walls, we can do lots of retaining walls, applications like that. It's quite complementary as well, our concrete business.

Affordable housing, everyone's talking about this £39 billion, and it being back-end loaded. There was some news at the beginning of this year around funding allocations of about £2 billion, that's promising.

We're doing a lot of work with housing associations themselves and getting quite close to them. It is going to take time, but if you look at the stats this year, public housing has got sort of a slightly higher growth rate than the private housebuilding.

We're seeing some momentum there already. It's again how much, how quick, it's not going to go crazy this year, but I do think that a sustained improvement in social housing in the UK is much needed, and it's going to create a much flatter, sort of, less oscillation in cyclicality for us.

The South East and London, I think there are a lot of things that are causing issues around the South East and London. The main one is affordability and building safety.

I think the Building Safety Regulator has got much more proactive approach. They're releasing projects much faster now, and I think that will start to unwind much faster this year.

Affordability is a big issue. If you think about buying a house in London and the South East compared to other parts of the country, there's a real issue there, and I think that's where we need some support.

I think it'll get a little bit better this year, but I don't think it's going to improve until we see some support for the first-time buyer. Okay.

Whoever the mic is closest?

Morning. Ben Valley from RBC.

I'll do three as well, please. First on guidance in terms of volumes, understand that it's H2 weighted, I guess what gives you confidence in that at the moment and the sort of spring selling season picking up?

Second is on Forticrete, the disposal there, can you give a bit more color and if there's anything else in the portfolio that could go the same way? Infrastructure, just so I understand correctly, is that mainly then focused on the concrete side of the business and do you need any investment there, how big could that be for the group?

Thanks.

Good. Do you want to do the guidance one?

Just talk a bit about volumes. With the weather-impacted first couple of months, we're sort of seeing the first half of the year to be more in line with the H2 2025 volumes.

That would mean slightly down on the comparative period, H1 '25, and then more growth in H2 2026. Based on the spring selling season, the elements which give us confidence is affordability metrics are looking better.

Inflation is stabilizing, and we could look at further interest rate cuts. That gives us confidence that the macro looks better.

Then some of the housebuilders are giving more positive updates on what their site visits are, how that's looking, we have confidence based on the sort of demand dynamics in quarter two, the spring period, getting better, and therefore growth will be realized in the second half of the year.

I think if you look at last year, we had this wonderful consumer confidence crisis with what's going to happen to tax, what's going to happen to the budget. The budget was pushed out.

I think that the budget was a bit of a clearing event, and I think you'll see more clarity going forward unless we get further noise from that side. I think there'll be more confidence, and people will be building a bit more this year.

It'll take some time because the second half of last year affects the first half of this year in particular, but I think you'll start to see improving build rates. Let's see what the spring selling season does.

Look, we always look at capital allocation and what a business needs in terms of capital going forward. Our Forticrete business was a very good business, but we had some performance challenges that I gave them some time to look at.

On the low volumes where it was at the moment, we felt that was someone else who could be a better custodian of that business. It's relatively low market share, and we want to have positions where we have high market share, leading number one or two positions.

We felt it was the right thing to do, and there's not really anything else that we're thinking about right now at the moment other than land disposals, as I've mentioned. Then on the infrastructure stuff, it's not just concrete.

Actually, when you look at it, it's concrete, it's the facades, and it's bricks. When we're going to talk to contractors, they're looking at the whole package now, and that's what's quite exciting about it.

It's not just that. The construction infrastructure market is about £35, £40 billion in this country.

It's something that we really need to be more aggressive, and I'd like to see that donut 10% going to 20% very soon. Alastair at the back there?

Alastair Stewart, pardon me, Progressive. A couple of related questions.

You displayed refreshing candour, if I might say so, for a CEO in personally acknowledging you moved too quickly last year. In terms of this year, irrespective of you're saying you're able to ramp up capacity, is there a psychological, as of, once bitten, twice shy feeling?

You're going to have to wait longer to see positives from the housebuilder before moving today. That's question one.

Question two, related to that, on slide 17, the production volumes and the active capacity available, how quickly would it take to turn that grey into blue should the market pick up more convincingly?

Good. Thanks, Alastair.

I thought all CEOs were very candid, are they not? Look, I think you have to be honest, and we're dealing with very tough market situations, and I think we've got a lot of trust from shareholders and this community, and you've got to be open about things.

I think look, you saw the graphs, yeah? You saw the movements, and then you saw [whoosh].

Would I have changed my mind? I think we made the decision we felt was right at the time.

Of course, I'll be very cautious about bringing new capacity back and new cost back, especially with this market. The good thing is that grey area, we can convert that very quickly.

Even the blue area on that graph, which is 65% utilization, that's got shutdowns in it. Yeah?

If the market comes back, we can produce a lot more. Also, we've got plenty of stock on the ground.

The industry levels at the moment, they're about 550 million bricks, which is not massive, but it's healthy, and we've got a healthy share of that. We can deploy that stock very quickly, which will be great for free cash flow generation.

We'll eat into the stock first, then we'll reduce shutdowns, and then we'll bring on a bit more capacity. Okay.

At the front? Oh, sorry, you've got one, okay.

Max from Oberon Asset Management. Just a regional outlook.

You see London and the South East potentially being weaker in 2026 than the rest of the country. Is that correct?

London and the South East have been weaker from a residential housing point of view for some time. I think, as I mentioned earlier on, there are some reasons for that.

Some of them are building safety, but the main one is affordability. I think it'll get better, but I think until we sort out the affordability issue, that's both for buying and for costs for builders to build with land and things like Section 106, it'll stay behind other areas in terms of growth.

I think it will improve a little bit this year.

The outlook for RMI then is slightly weaker than residential construction. Is that also correct?

Because I'm looking at the market UK construction forecasts.

Yeah. We go on what the CPA say.

At this stage, it looks like there's a bit of a decline this year of about 1% on RMI markets.

Just quickly, what do you think is causing that on the RMI side? Is it the interest rates just being high?

RMI is really around consumer confidence. Let's go to Stephen, and then...

Hi. Stephen Rawlinson from Applied Value.

Two for me if you don't mind. Firstly, with regard to routes to market, could you just talk us through the way in which the channels to sites are altering and how that might play through in the next few years with particular reference to your own margins?

I.e., what's going through merchants, what's actually going direct to site, and the implications for margin that might have happened over the last few years and are present in these numbers, but potentially how they may progress in the future? The second question is with regard to brick slips, off-site construction.

Do you anticipate that you'll be doing that yourselves or as an industry emerging, you believe can absorb the capacity that you're creating for the slips production such that actually you will be able to satisfy that demand? How is that going to play out?

Is that something that's going to be at your cost, on your sites, or is there an industry emerging that's satisfactory from your point of view to actually absorb the capacity you've created?

Good. Our routes to market, look, I think with infrastructure, there's definitely people are coming to talk to us because they looking at the whole package.

I think you might see a little bit of a shift in more direct relationships with contractors than we have in the past. The merchant industry, for example, creates a great sort of service for the UK because it stocks and it takes credit risk, and it redistributes and breaks bulk.

We think there's a real value in that route to market and that supply chain. We've got great partnerships with merchants.

We've got great margin with brick specialists, and we've got direct relationships with housebuilders. There's no doubt more people want to talk to us directly because they're seeing now, as we've been marketing all of our product capabilities, not just bricks, "Oh, well, we'd like to have all of this as a package, please."

That's where we see probably more direct relationships coming forward. We have to think about cost to serve as well, we're not going to have a myriad of millions of relationships.

We going to think about that. Then the whole ceramic facades, there's a whole ecosystem there where you've got installers, you've got contractors, subcontractors.

We won't be doing that install ourselves. We want to provide the products and the solutions that go with the installers, the developers, and the contractors.

We're not going to start installing ourselves. That's not our core business.

It's not something I'd get into. We don't know enough about the risk factors and all that side of the market.

They are waiting to see this Nostell factory. They're waiting to see it because they've never seen it before.

That's why it's going to pick up momentum, and we've got the capability to really make a big sea change, I think, in MMC in the UK with that factory. He's had his hand up for ages, he's got it.

Thanks very much. Christen Roos from Deutsche Bank.

Two, hopefully pretty quick ones. Just on net debt, you normally see that increase as you move to the half one stage with working capital investment, but sounds like you're quite well invested in inventory.

Just a sense of what we should expect in terms of net debt as we move through H1. Then second, I suppose following up on the volume phasing piece, what was your current thinking around the EBITDA phasing H1, H2, because there's a few moving parts in terms of capacity and things like that?

Those are the two for me, please. Thanks.

Okay. In terms of net debt, we would see a normal seasonal working capital build, but less so in inventory.

It'll be more debtors-related as we have more sales in those periods versus a November-December last year. We'd see that.

Then in terms of EBITDA, yeah, I think we're going to be more weighted to the second half. We've got production shutdowns and producing less inventory in the first half of the year, which gives us that margin headwind.

We're thinking about our weighting probably being between 40 and 45% in the first half of the year.

Just behind you.

Thank you. Harry Dow from Rothschild & Co.

I think just two questions, if possible. Just first on the concrete business, how should we think about the operating leverage as that kind of volume recover, maybe if railway comes back?

I think the drop-through this year was quite high in terms of I think we lost £5 million revenue and then £5 million EBITDA. Maybe also just what happened in 2025 for such a high drop-through maybe?

Then just also just a comment on other operating costs, sort of expected wages inflation or distribution costs, things like that. Thank you.

I think operating leverage in the rail business has quite a big bearing on our margins, and that moving forward will really help margin improvement this year. Concrete's a little bit different to clay.

Clay, you've got high fixed costs and you know the deal. Concrete's more of a batch you've got more flexibility with it, really it's around volumes and it's around margin in specific categories, and that's why we believe there's reasonable momentum in concrete this year.

Other costs, Simon, do you want to talk about that? Yeah.

Our major cost really is around labor, we'd expect a low single-digit sort of impact around that, which is in line with the industry and the wider positions. Then in terms of variable costs, we'd expect a similar number.

We'll wait to see how things like oil pans out, how's that working, how that feeds through to say haulage costs, but I think we've got a little while to see how that's actually going to pan through.

Good. Charlie.

Sorry, thanks. Charlie Campbell at Stifel.

Just one. You haven't really mentioned planning as a potential opportunity this year.

Clearly, there is hope that after two years the planning system might start to free up a bit. Just wondering what your view on that is, and whether you've noticed any change in the rate of site openings maybe in the last few months or projections in the next few months.

Thank you.

Planning's still not great, if I'm honest. I think what is promising is that there's a focus on it, and where we have seen improvements is if there's a decision on a large site, there are people coming from above saying, "Let's do it."

We still have a too long a time gap from planning permission to build-out rates. It's really taking too long.

I think it's an opportunity. There's definitely proactivity from the government getting involved to make decisions about it, but we haven't seen any major changes in terms of site openings in the last few months.

Okay. Do we have any questions from the ether?

No?

Good. Thanks, everyone.

Look, it's a crazy time in the world. It's a difficult market that we're navigating carefully, but this is a real high-quality business, 200 years old, and we will get some recovery soon.

When it comes, we're really well positioned, and I'm excited about that, and I'm looking forward to it greatly. Really good to see you, and we can have a chat afterwards, but thanks very much for coming today.