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magazineCalling time on Ibstock's building share price
Ibstock (IBST) 232.4p
Gain to date: 28.8%
Original entry point: Buy at 180.5p, 26 January 2017
Our positive call on brick manufacturer Ibstock (IBST) is being rewarded and first half results (10 Aug) suggest the momentum is being maintained. Revenue was up 9% to £228m and pre-tax profit before one-off items hit £43.3m, a 14.4% increase on the first six months of 2016. The dividend was hiked 8% to 2.6p.
This strong showing is supported by continuing strong demand from the housebuilding sector with a previous oversupply of brick stocks no longer a headwind for the industry.
The main negative was an increase in net debt from £133m at the beginning of 2017 to £160m. And with reports the Help to Buy scheme for prospective home buyers may be scrapped early and signs of a slowing housing market in the UK it may be prudent to book some profit.
The stock, which traded on 10.4 times 2017 consensus forecast earnings when we first flagged its attractions, is now on a less attractive looking multiple of 13 times.
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