One of the UK’s biggest brickmakers has described the housebuilding market as “challenging” after cutting its dividend and swinging to a loss.

Leicestershire-based Ibstock, which is London’s second most shorted stock with a reported short interest of 12.9 per cent, posted a loss of £27m for the first six months of the year, compared with a profit of £8m in the same period last year.

Revenue for the period fell 15 per cent to £164m, while the company reduced its dividend from 1.5p to 0.5p per share.

The results highlight how a slowdown in private housebuilding can feed through to suppliers as well as builders themselves, with volumes and fixed costs both under pressure when demand weakens.

“Private housebuilding and [maintenance] activity levels remain subdued, with conditions expected to remain challenging in the near term,” Ibstock said.

“With renewed uncertainty around the Middle East conflict coupled with a changing UK political backdrop, we are mindful of the potential near term effects on consumer confidence and the wider construction sector.

“Whilst volatility persists, we will continue to focus on managing capacity, inventory levels and costs and will adapt plans to market conditions.”

The shares have fallen 30 per cent since the start of the year, alongside other housebuilding names including Vistry, Taylor Wimpey and Barratt Redrow, which have also seen sharp declines. Vistry is London’s most-shorted stock, with a short interest of 16.7 per cent according to Research Tree.

Despite the weaker results, analysts at Peel Hunt kept their “buy” rating on the stock, saying the company was “grinding it out in challenging markets”.

“The group continues to pull strategic levers to improve performance, but soft market volumes continue to consume these gains,” Peel Hunt analysts said.

“When volumes recover, Ibstock’s operational gearing should drive a quick improvement in profitability.”