TIDMFORT
RNS Number : 4653Z
Forterra plc
16 May 2023
16 May 2023
FORTERRA PLC
Pre-AGM trading update
YTD result in line with expectations despite challenging trading
conditions
Ahead of a capital markets event coinciding with the formal
opening of the new Desford brick factory tomorrow and in advance of
our AGM on 23 May, Forterra plc (the 'Group'), a leading UK
manufacturer of essential clay and concrete building products,
provides this trading update for the four-month period ending 30
April 2023 (the 'period').
Results
-- Profit before tax in the period was in line with management's
expectations with revenue for the period of GBP109m a decrease of
24% on the prior year (2022: GBP143m)
-- Cost base stabilising, however inflation persists in certain
categories in line with expectations
-- Approximately 80% of YTE energy requirements secured, albeit
at higher rates than 2022 due to the expiry of historic forward
purchases made at advantageous rates
Market backdrop and outlook
-- Our expectations for the year remain unchanged based upon an
underlying fall in full year market demand of 20% relative to
2022
-- Whilst industry brick despatches fell 32% relative to the
prior year in the three months to the end of March, we continue to
expect market conditions to improve as the year progresses
-- We believe the levels of inventory reduction within our
customer base have been a major factor in our YTD performance and
expect this to ease going forward
-- Brick imports have begun to fall sharply, reducing by 45%
relative to 2022 in the three months to the end of March
-- Improving housebuilder reservation rates provide cause for
optimism and an improving outlook for H2 2023 and into 2024
-- The result for the full year will be weighted towards H2
reflecting the anticipated improvement in market conditions
Capacity Management
-- Production at the new Desford brick factory continues to ramp
up and the old factory ceased production as planned at the end of
March
-- With the new factory becoming operational at a time of
subdued demand, disciplined capacity management is key to our
ongoing success and we are presently consulting on measures to
temporarily reduce our production, including the mothballing of our
Howley Park brick factory. These measures are expected to deliver
an annualised fixed cost reduction of approximately GBP10m. Beyond
this, we will continue to ensure our cost base, including Group
overhead, is aligned to market conditions
Dividend
-- As previously announced, subject to approval at next week's
AGM, we expect to pay a final 2022 dividend of 10.1 pence per share
on 7 July to shareholders on the register as at 16 June 2023
Formal opening of Desford
-- We are hosting the formal opening of the Desford brick factory on Wednesday 17 May 2023
-- No new information will be provided on current trading
further to today's update. The presentation materials from the
event will be made available on the Group's website
Neil Ash, Chief Executive of Forterra plc, commented:
"Trading conditions in the period have been challenging and we
are therefore pleased to deliver a result in line with our
expectations.
"Our expectations for the year are based upon an underlying fall
in market demand of 20% relative to 2022. With the inventory
reduction within our customer base still ongoing, the decline in
demand we have seen in the period is greater than 20%. However, we
do expect demand will improve as the year progresses, noting the
improving conditions cited by the housebuilders over recent
weeks.
"We have already taken proactive steps to manage our production
capacity and cost base, as we seek to maximise the benefits of the
new Desford factory and the industry leading efficiencies it will
provide.
"Our other growth investments at Wilnecote and Accrington are
both progressing well.
"We believe the Group is well placed to meet the short-term
challenges we face and remain confident in the medium to long-term
fundamentals of our markets. This confidence is underpinned by a
longstanding shortage of housing supply, the strong cross-party
political support for housebuilding and a long-term deficit of
domestic brick production capacity.
"Subject to market conditions improving in line with our
projections we continue to anticipate delivering a full year result
in line with our expectations with the result weighted towards
H2."
ENQUIRIES
Forterra plc +44 1604 707 600
Neil Ash, Chief Executive Officer
Ben Guyatt, Chief Financial Officer
FTI Consulting +44 203 727 1340
Richard Mountain / Nick Hasell
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
RNS may use your IP address to confirm compliance with the terms
and conditions, to analyse how you engage with the information
contained in this communication, and to share such analysis on an
anonymised basis with others as part of our commercial services.
For further information about how RNS and the London Stock Exchange
use the personal data you provide us, please see our Privacy
Policy.
END
TSTFLFVSETIELIV
(END) Dow Jones Newswires
May 16, 2023 02:00 ET (06:00 GMT)
Forterra (LSE:FORT)
Gráfica de Acción Histórica
De Abr 2024 a May 2024
Forterra (LSE:FORT)
Gráfica de Acción Histórica
De May 2023 a May 2024