Ibstock plc, Forterra PLC & Marshalls plc
Why Ibstock, Forterra and Marshalls deserve a closer look and why the timing might finally be right
This piece is a companion to our recent deep-dive on the housebuilders themselves Persimmon, Vistry, Taylor Wimpey and the rest. If you haven't read that first, the context here will make considerably more sense.
Dear reader,
Britain built fewer homes last year than at any point since 2016. It started fewer than at any point since records began in 1978. And yet the companies that manufacture the bricks, roof tiles and drainage systems for every one of those homes are, almost without exception, priced as though the slump will last forever. They won’t. The question is who is positioned when it doesn’t.
Ibstock, Forterra and Marshalls are three of the most direct proxies for UK residential construction activity on the London Stock Exchange. All three have seen their share prices collapse over the past two years. All three are now trading at or near multi-year lows. And all three, in their different ways, are pointing to the same thing: the worst is either behind them or close to it, the government is pushing hard on the policy levers that drive their revenues, and anyone willing to tolerate the near-term noise may be looking at some of the more asymmetric opportunities in the mid-cap UK market.
These are not simple recovery plays, and the picture deserves more than a summary. Let us start where the story really begins not in a factory in Staffordshire, but in the data on housing starts.
The hole they fell into
To understand why these stocks have been so badly punished, you need to understand just how severe the contraction in UK housebuilding has been. Not merely soft. Not merely cyclically weaker. Structurally, historically, almost unprecedentedly bad.
In 2024, construction began on just 107,530 homes across the UK, a collapse of 29.5% from the 150,370 starts recorded in 2023, and a 40% fall from the 182,070 in 2022. Completions, which lag starts by 12 to 18 months, fell a further 7.6% in 2025 to around 170,000, leaving England recording its lowest completion rate since 2016. To put that in historical context: starts in Q4 2023 hit their lowest quarterly level since official records began in 1978.
The causes are well-documented and interconnected. Mortgage rates jumped from near-zero to levels that made the arithmetic of a new-build purchase genuinely difficult for many buyers. The abolition of Help to Buy in March 2023 removed a subsidy that had been quietly underpinning private demand for a decade. Planning delays accumulated. Nutrient neutrality rules paralysed whole regions. And then the Autumn 2024 Budget injected a fresh dose of uncertainty into an already nervous market, with employer National Insurance contributions rising and the development sector’s own cost base moving against it.
For companies that make their money supplying the materials that go into every one of those homes, the arithmetic is straightforward and brutal. Fewer starts means fewer bricks ordered. Fewer completions means fewer roofing products, less block paving, less drainage infrastructure. The timing effect cuts twice: manufacturers see demand fall immediately when housebuilders pause, but they carry fixed costs, the kilns, the factories, the workforces regardless of how many orders come in.
This is the operating environment that produced the share price declines we are examining. It is worth knowing it was that bad before asking whether it is getting better.
Ibstock: the pure-play that got caught in the crossfire
Share price: ~102p | 52-week range: 101p – 200p | Forward PE: ~23x | Consensus target: 143p
Ibstock is the most direct exposure of the three. It manufactures clay bricks and concrete building products almost exclusively for the UK construction sector, with no diversification into roofing, landscaping or international markets. When UK housebuilding catches a cold, Ibstock gets pneumonia.
The 2025 full year results illustrated this bluntly. Revenue edged up 2% to £372 million, a number that looks acceptable until you drill into it. Adjusted EBITDA fell 10% to £71 million. Margins compressed 260 basis points to 19.1%. Statutory profit before tax collapsed from £21 million to £1 million, hit by a £19 million exceptional charge. The dividend was cut 25%. Adjusted EPS fell 26% to 5.7 pence.
What happened was a familiar industrial story: management moved too early. The first half of 2025 was encouraging new-build residential volumes improved and Ibstock sensibly reactivated mothballed capacity. Then the second half deteriorated sharply as budget uncertainty and poor weather caused housebuilders to pull back. Ibstock bore the fixed costs of recommissioning without the revenues to match.
That dynamic is now reversing. The Atlas factory is operational, delivering lower-cost production. Capex drops to £25-30 million in 2026, sharply lower than prior years, meaning cash generation improves even before volumes recover. Net debt at £120 million and roughly 2x EBITDA is manageable. Non-core disposals raised £30 million.
Recent trading is nuanced. The first four months of 2026 saw roughly 10% like-for-like revenue decline on poor weather and market softness. But brick volumes rose high single digits year-on-year in April, with momentum continuing into May. The investment case is not that the business is in good shape now it manifestly is not. It is that anyone who concluded from our housebuilder piece that Persimmon, Taylor Wimpey and Barratt are pointing toward a genuine recovery should recognise that Ibstock is the leveraged version of that trade.
Forterra: the better business, and it shows
Share price: ~185p | 52-week range: 150p – 215p | Forward PE: ~16x | Consensus target: 229p
If Ibstock is the purer bet, Forterra is the more convincing one. Both companies make clay bricks and concrete blocks, but Forterra’s 2025 results tell a meaningfully different story.
Revenue rose 12.1% to £386 million. Adjusted EBITDA grew 18.5% to £61.6 million. Brick deliveries outperformed the broader market’s 6% growth — meaning share gains. Net debt before leases fell from £84.9 million to £56 million, or just 1x EBITDA. A £20 million buyback was launched. CEO Neil Ash attributed the outperformance to a deliberate structural choice: an asset base weighted toward extruded brick, with exposure skewed toward new-build over repair and maintenance. Decisions made before the cycle turned.
The heavy lifting is done. A £27 million upgrade at Wilnecote and the first simultaneous operation of both Desford kilns expanded capacity by 22% spending that weighed on returns through the downturn but now sits ready to generate cash into a recovery. Capex drops to around £15 million in 2026, the sharpest reduction of the three, and free cash flow should follow sharply. Management's medium-term EBITDA target of £120 million is roughly double what the business earned last year and reflects normalised volume running through plant that is already built and paid for.
The statutory EBITDA number fell 10.6% after exceptional costs tied to exiting Formpave and Bison Bespoke Precast. The RMI market remained subdued. Neither point is trivial. At around 140p, the stock has been marked down to levels that imply the operational progress of 2025 simply did not happen. It now trades at roughly 11x forward earnings against a consensus target of 229p. The shares sit well below their 52-week low despite a set of results that was operationally strong. The market is discounting near-term volume uncertainty rather than reflecting the underlying business quality, and at 140p that discount has become difficult to justify.
Marshalls: the restructuring story within the recovery story
Share price: ~172p | 52-week range: ~140p – 230p | Forward PE: ~13x | Consensus target: 261p
Marshalls is the most complex of the three and carries the most risk, but also the most upside. Where Ibstock and Forterra are single-business cyclical plays, Marshalls is a diversified building products group mid-way through a painful transformation.
The 2025 numbers tell that story plainly. Revenue rose 2% to £632 million — the first increase since 2022. But pre-tax profit fell 55% to £17.7 million. Adjusted profit before tax fell 16% to £43.7 million. Restructuring and impairment charges of £14.1 million clouded things further.
Most of the damage came from Landscaping Products, historically the core business. Its operating profit fell 96.3% in H1 2025, to just £300,000. Full year landscaping operating margin: 0.2%. The culprit was a collision of subdued markets, worse product mix and the disruption of the restructuring itself. Management exited quarried natural stone processing, closed loss-making lines and renegotiated contracts. The plan is expected to deliver £11 million in annualised savings £3 million landed in 2025, meaning £8 million falls in 2026.
The rest of the business is better. Building Products grew 4% to £172 million. Roofing Products grew 4% to £194 million, led by Viridian Solar at +32% as Part L energy efficiency regulations drove demand. That solar business is the sleeper structurally supported by tightening building standards that have nothing to do with the housing cycle. The dividend has been cut 17% to 4.5 pence, yielding 3.2%, with analysts projecting EPS growth of 134% over three years as restructuring costs clear. If that trajectory holds, the yield looks cheap rather than stretched.
The macro backdrop: policy as a tailwind
The investment case for all three companies ultimately rests on a recovery in UK housing activity and that recovery is now a political project as much as an economic one.
The Labour government’s commitment to 1.5 million homes over the current Parliament is more than rhetoric. Planning reform has been substantive, with mandatory housing targets reinstated for local authorities after years of advisory drift. The Housing Delivery Test, which penalises councils that fall short of targets, is now back in operation. Major reform of the NPPF has strengthened the presumption in favour of sustainable development. And the government is actively exploring buyer stimulus, recognising that demand as much as supply is the binding constraint.
The numbers are starting to respond. Housing starts rose 12.4% in 2025 to an estimated 150,600, still 21% below 2019 levels, and well below what a genuine recovery would look like, but directionally important. Q4 2025 saw the highest private enterprise starts since 2023. The major housebuilders Persimmon, Taylor Wimpey, Barratt are increasing their site counts and forward sales guidance. That pipeline translates directly into brick orders, roof tile orders, drainage orders. There is typically an 18-24 month lag between starts and the peak in materials demand. The clock is ticking.
The risks to this recovery are real and should not be minimised. The Middle East conflict is feeding into energy prices and global supply chain costs Ibstock and Forterra flag this explicitly. Mortgage rates, while lower than their 2023 peak, remain elevated enough to constrain affordability for first-time buyers. The RMI market, which these companies also serve, remains subdued as homeowners continue deferring discretionary spending. And planning reform, however well-intentioned, takes time to translate into spades in the ground.
But the direction of travel is clear. The government has tied its political credibility to housing delivery in a way no administration has for a generation. The housebuilders, as we argued in our previous piece, are building their operational capacity accordingly. The question is whether you want to own the builders or the people who supply them (or both :) )
