Ibstock holders to get pounds 60m

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The Independent Online
IBSTOCK, the UK's second largest building materials producer, is planning to reward its long-suffering shareholders with a cash handout worth up to pounds 60m.

The company is looking at a number of options, including a special dividend and a share buyback.

Philip Mengel, Ibstock chief executive said: "We are reviewing our capital structure because we believe that our share is undervalued, cash-generation is strong and growing, and gearing has been reduced."

City analysts welcomed the return of cash, saying that the move would be a partial compensation for the recent collapse in the company's share price. Ibstock touched a four-year low of 39.5p on Friday, well below the 63.5p reached in March.

"Building materials companies have had a poor track record on the acquisition front," said one analyst. "I think it is absolutely right that Ibstock should be giving money back to shareholders."

News of the return of cash came as uncertainty continues to surround the intentions of Brierley Investment Limited (BIL), Ibstock's largest shareholder. The New Zealand-based investment fund has announced plans to scale back its European exposure, and analysts have speculated that Ibstock could be on BIL's sale list. However, Mr Mengel said yesterday that BIL remained "a long-term investor in Ibstock."

His comments came after Ibstock reported a 80 per cent in interim pre- tax profits before exceptionals to pounds 15.3m on turnover up 8.2 per cent to pounds 157.6m. The shares firmed 31/2p to 43p.

Mr Mengel said he did not see any sign of the widely-predicted economic slowdown.

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