UK Bricks - Further FY26 de-risking, but compelling cash story intact

Research evidence excerpt

UK Bricks - Further FY26 de-risking, but compelling cash story intact

UK | Building, Construction &

Housebuilders EquityMayResearch22, 2026

KEY STOCKS FEATURED INCLUDE:UK Bricks - Further FY26 de-risking, but

TICKER RATING PRICE TARGETcompelling cash story intact

FORT LN BUY 177.00p

With this week's updates showing a more difficult than expected IBST LN BUY 115.00p

1Q26 despite known weather headwinds, and increasing likelihood of a

challenging backdrop persisting into 2H26, we have cut EBITDA in the

sector by another c.10% pa to reflect lower FY26 volumes. While we

KEY CHANGES INCLUDE:

recognise the strong leverage to an eventual UK recovery may gain limited

traction among investors for now, extra cash return potential remains intact TICKER RATING PRICE TARGET

and compelling despite our cuts. FORT LN BUY 177.00p (204.00p)

IBST LN BUY 115.00p (127.00p)

JEFe EBITDA cut c.10% pa. In what marks the second cross-sector cut in our brick coverage

since the onset of the Iran War, we have cut JEFe EBITDA by a further c.10% pa for both

FORT and IBST. This is driven by lower FY26 volume assumptions (now c.-5% YoY from flat Exhibit 1 - Forterra - Changes to JEFe

previously) and the subsequent margin impact from operating leverage. Although weather £ m 2026E 2027E 2028E

Sales 375 392 412

was a known headwind in Jan-Feb, with both stocks reporting 4m26 LfL sales c.-11% YoY, % change -2.1% -2.1% -2.1%

1Q26 was weaker than expected. Reflecting this, we have cut our 1H26 volume forecasts Adj. EBITDA 57 61 66

(now down high-single digits YoY), albeit Ibstock reporting high-single-digit growth in April/ % change -9.2% -8.8% -8.5%

May could suggest slight upside to this. We have also de-risked 2H26 volumes to show flat Adj. EBITDA margin 15.1% 15.5% 16.0%

Previous 16.3% 16.6% 17.1%