Latest news with #Ibstock
Yahoo
2 days ago
- Business
- Yahoo
Would investors be mad to consider these UK shares at P/E ratios above 30?
Despite a reputation for trading at a discount to their US counterparts, some UK shares trade at very high price-to-earnings (P/E) multiples. But these can often be better value than they look. There are a couple of stocks from the FTSE 100 and the FTSE 250 that currently trade at P/E ratios above 30. But – for different reasons – I think both are worth considering. Informa's (LSE:INF) in the business of running trade shows and conferences. Its biggest competitive strength is the popularity of its events, which are leaders in their various industries. The firm also leases – rather than owns – the venues that host its events. As a result, it has relatively little in the way of physical assets, which makes for low maintenance costs. A consequence of this is that Informa's free cash flow is consistently higher than its net income. In 2024, net income was around £407m, while free cash flow was £771m. The company's cash flow statement indicates that a lot of the difference is due to amortisation costs. Some of these relate to the firm's acquisition of Ascential in 2024. There are some important risks to consider. One of the most obvious is the possibility of a trade war, which is especially live at the moment and could be significant. Importantly though, I don't think the stock's as expensive as its P/E multiple suggests. On a free cash flow basis, it trades at a multiple of 13 and this seems much more reasonable. Shares in FTSE 250 brick manufacturer Ibstock (LSE:IBST) currently trade at a P/E ratio of almost 50. But there's a very clear reason for this. According to the Office for National Statistics (ONS) the number of housing completions has been falling since 2021. And that has been weighing on demand for bricks. There's reason to believe though, that the long-term picture's much more positive. The UK has a shortage of housing that might well lead to strong demand over the next decade and beyond. If this causes Ibstock's earnings to get back to where they were at their peak, the current share price implies a P/E ratio of around 8. I think that means the stock might not be as expensive as it looks. Ongoing developments in housing construction are a potential risk for the firm. Some new building techniques require fewer bricks than traditional ones and this is worth paying attention to. Investors therefore shouldn't be complacent when it comes to the stock. But they also shouldn't take a high P/E ratio at face value as a sign the company's shares are overvalued. Valuing a stock isn't just about looking at the multiples it trades at. A high P/E ratio says more about investor expectations than the underlying business. With Informa, the business generates more cash than its net income indicates. And Ibstock's profits should gather momentum in the event of UK housebuilding picking up in the future. I don't think investors would be mad to consider buying either at today's prices. I see both as reasons to look past the headline multiples when it comes to evaluating stocks. The post Would investors be mad to consider these UK shares at P/E ratios above 30? appeared first on The Motley Fool UK. More reading 5 Stocks For Trying To Build Wealth After 50 One Top Growth Stock from the Motley Fool Stephen Wright has no position in any of the shares mentioned. The Motley Fool UK has recommended Ibstock Plc. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors. Motley Fool UK 2025 Se produjo un error al recuperar la información Inicia sesión para acceder a tu portafolio Se produjo un error al recuperar la información Se produjo un error al recuperar la información Se produjo un error al recuperar la información Se produjo un error al recuperar la información
BBC News
28-05-2025
- General
- BBC News
Leicestershire Police officer reunited with hat after 23 years
When PC Paul Allen lost his police hat more than 20 years ago, he assumed he would never see it again. However, the now superintendent had a call this month to say it had been found - in a hat was discovered by a member of the public at Ibstock Quarry, 14 miles (22.5km) away from where Supt Allen last saw it in Leicester city said the hat was in "really good condition", and added "it really is a prized possession". Supt Allen said: "I was out on patrol one Saturday night all those years ago."Me and a colleague were sent to an incident in the city centre and we ended up sitting a young lad in the back of the car."We got back to the station at about three o'clock in the morning and realised the hat was gone. It seemed someone wanted to have a souvenir of their night."More than 20 years had passed when Allen got the call to say his hat had been found - in fact it had been so long that he did not realise at first that it was his long-lost hat. "I got a phone call to say they had found a hat in an Ibstock quarry with PC429 and Allen wrote on it, but we have lots of hats over the years so the penny didn't drop," he said."It has the old badge which we don't have anymore. It doesn't seem like it's been outside for very long."It is special, when I joined we were moving to all new equipment so it's nice to have something from that time back."We might hand it over to our archivist because this story is probably worth telling again when I retire but for now it is sitting on the shelves in my office."
Yahoo
26-05-2025
- Business
- Yahoo
Is Ibstock plc (LON:IBST) Trading At A 41% Discount?
Ibstock's estimated fair value is UK£3.21 based on 2 Stage Free Cash Flow to Equity Ibstock's UK£1.91 share price signals that it might be 41% undervalued Analyst price target for IBST is UK£2.07 which is 35% below our fair value estimate Today we'll do a simple run through of a valuation method used to estimate the attractiveness of Ibstock plc (LON:IBST) as an investment opportunity by estimating the company's future cash flows and discounting them to their present value. The Discounted Cash Flow (DCF) model is the tool we will apply to do this. There's really not all that much to it, even though it might appear quite complex. We would caution that there are many ways of valuing a company and, like the DCF, each technique has advantages and disadvantages in certain scenarios. If you still have some burning questions about this type of valuation, take a look at the Simply Wall St analysis model. AI is about to change healthcare. These 20 stocks are working on everything from early diagnostics to drug discovery. The best part - they are all under $10bn in marketcap - there is still time to get in early. We are going to use a two-stage DCF model, which, as the name states, takes into account two stages of growth. The first stage is generally a higher growth period which levels off heading towards the terminal value, captured in the second 'steady growth' period. To begin with, we have to get estimates of the next ten years of cash flows. Where possible we use analyst estimates, but when these aren't available we extrapolate the previous free cash flow (FCF) from the last estimate or reported value. We assume companies with shrinking free cash flow will slow their rate of shrinkage, and that companies with growing free cash flow will see their growth rate slow, over this period. We do this to reflect that growth tends to slow more in the early years than it does in later years. A DCF is all about the idea that a dollar in the future is less valuable than a dollar today, and so the sum of these future cash flows is then discounted to today's value: 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 Levered FCF (£, Millions) UK£18.3m UK£49.4m UK£59.0m UK£66.2m UK£72.4m UK£77.6m UK£82.2m UK£86.2m UK£89.8m UK£93.1m Growth Rate Estimate Source Analyst x4 Analyst x5 Analyst x3 Est @ 12.19% Est @ 9.29% Est @ 7.27% Est @ 5.85% Est @ 4.86% Est @ 4.16% Est @ 3.67% Present Value (£, Millions) Discounted @ 7.9% UK£17.0 UK£42.4 UK£47.0 UK£48.8 UK£49.5 UK£49.2 UK£48.2 UK£46.9 UK£45.2 UK£43.5 ("Est" = FCF growth rate estimated by Simply Wall St)Present Value of 10-year Cash Flow (PVCF) = UK£438m We now need to calculate the Terminal Value, which accounts for all the future cash flows after this ten year period. The Gordon Growth formula is used to calculate Terminal Value at a future annual growth rate equal to the 5-year average of the 10-year government bond yield of 2.5%. We discount the terminal cash flows to today's value at a cost of equity of 7.9%. Terminal Value (TV)= FCF2034 × (1 + g) ÷ (r – g) = UK£93m× (1 + 2.5%) ÷ (7.9%– 2.5%) = UK£1.8b Present Value of Terminal Value (PVTV)= TV / (1 + r)10= UK£1.8b÷ ( 1 + 7.9%)10= UK£830m The total value, or equity value, is then the sum of the present value of the future cash flows, which in this case is UK£1.3b. To get the intrinsic value per share, we divide this by the total number of shares outstanding. Compared to the current share price of UK£1.9, the company appears quite undervalued at a 41% discount to where the stock price trades currently. The assumptions in any calculation have a big impact on the valuation, so it is better to view this as a rough estimate, not precise down to the last cent. We would point out that the most important inputs to a discounted cash flow are the discount rate and of course the actual cash flows. If you don't agree with these result, have a go at the calculation yourself and play with the assumptions. The DCF also does not consider the possible cyclicality of an industry, or a company's future capital requirements, so it does not give a full picture of a company's potential performance. Given that we are looking at Ibstock as potential shareholders, the cost of equity is used as the discount rate, rather than the cost of capital (or weighted average cost of capital, WACC) which accounts for debt. In this calculation we've used 7.9%, which is based on a levered beta of 1.047. Beta is a measure of a stock's volatility, compared to the market as a whole. We get our beta from the industry average beta of globally comparable companies, with an imposed limit between 0.8 and 2.0, which is a reasonable range for a stable business. Check out our latest analysis for Ibstock Strength Debt is not viewed as a risk. Weakness Earnings declined over the past year. Dividend is low compared to the top 25% of dividend payers in the Basic Materials market. Opportunity Annual earnings are forecast to grow faster than the British market. Trading below our estimate of fair value by more than 20%. Threat Dividends are not covered by earnings and cashflows. Revenue is forecast to grow slower than 20% per year. Valuation is only one side of the coin in terms of building your investment thesis, and it ideally won't be the sole piece of analysis you scrutinize for a company. The DCF model is not a perfect stock valuation tool. Instead the best use for a DCF model is to test certain assumptions and theories to see if they would lead to the company being undervalued or overvalued. If a company grows at a different rate, or if its cost of equity or risk free rate changes sharply, the output can look very different. Why is the intrinsic value higher than the current share price? For Ibstock, there are three fundamental factors you should further research: Risks: For instance, we've identified 1 warning sign for Ibstock that you should be aware of. Future Earnings: How does IBST's growth rate compare to its peers and the wider market? Dig deeper into the analyst consensus number for the upcoming years by interacting with our free analyst growth expectation chart. Other High Quality Alternatives: Do you like a good all-rounder? Explore our interactive list of high quality stocks to get an idea of what else is out there you may be missing! PS. Simply Wall St updates its DCF calculation for every British stock every day, so if you want to find the intrinsic value of any other stock just search here. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
Yahoo
15-04-2025
- Business
- Yahoo
Ibstock Full Year 2024 Earnings: EPS Misses Expectations
Revenue: UK£366.2m (down 9.8% from FY 2023). Net income: UK£15.1m (down 28% from FY 2023). Profit margin: 4.1% (down from 5.2% in FY 2023). EPS: UK£0.038 (down from UK£0.054 in FY 2023). Our free stock report includes 1 warning sign investors should be aware of before investing in Ibstock. Read for free now. All figures shown in the chart above are for the trailing 12 month (TTM) period Revenue was in line with analyst estimates. Earnings per share (EPS) missed analyst estimates by 23%. The primary driver behind last 12 months revenue was the Clay segment contributing a total revenue of UK£248.8m (68% of total revenue). Notably, cost of sales worth UK£251.9m amounted to 69% of total revenue thereby underscoring the impact on earnings. The largest operating expense was General & Administrative costs, amounting to UK£43.3m (44% of total expenses). Explore how IBST's revenue and expenses shape its earnings. Looking ahead, revenue is forecast to grow 9.0% p.a. on average during the next 3 years, compared to a 6.1% growth forecast for the Basic Materials industry in the United Kingdom. Performance of the British Basic Materials industry. The company's shares are up 12% from a week ago. You should learn about the 1 warning sign we've spotted with Ibstock. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Sign in to access your portfolio
Yahoo
15-04-2025
- Business
- Yahoo
Ibstock Full Year 2024 Earnings: EPS Misses Expectations
Revenue: UK£366.2m (down 9.8% from FY 2023). Net income: UK£15.1m (down 28% from FY 2023). Profit margin: 4.1% (down from 5.2% in FY 2023). EPS: UK£0.038 (down from UK£0.054 in FY 2023). Our free stock report includes 1 warning sign investors should be aware of before investing in Ibstock. Read for free now. All figures shown in the chart above are for the trailing 12 month (TTM) period Revenue was in line with analyst estimates. Earnings per share (EPS) missed analyst estimates by 23%. The primary driver behind last 12 months revenue was the Clay segment contributing a total revenue of UK£248.8m (68% of total revenue). Notably, cost of sales worth UK£251.9m amounted to 69% of total revenue thereby underscoring the impact on earnings. The largest operating expense was General & Administrative costs, amounting to UK£43.3m (44% of total expenses). Explore how IBST's revenue and expenses shape its earnings. Looking ahead, revenue is forecast to grow 9.0% p.a. on average during the next 3 years, compared to a 6.1% growth forecast for the Basic Materials industry in the United Kingdom. Performance of the British Basic Materials industry. The company's shares are up 12% from a week ago. You should learn about the 1 warning sign we've spotted with Ibstock. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
