First-half revenue up at Forterra plc

Revenue increase of 11.4% in six months to end of June reflects robust demand in new-build residential sector

FORTERRA plc, one of the UK’s leading producers of manufactured masonry products, have reported an 11.4% increase in revenue, to £162.7 million, in the first half of 2017, up from £147.0 million in the same period last year.

For the six months ended 30 June 2017, EBITDA before exceptionals of £38.7 million was £0.4 million ahead of the comparative for 2016, reflecting higher sales volumes of bricks and blocks and the benefits of price increases across the company’s product lines, which mitigated higher input costs for raw materials, fuel and energy.

The company said EBITDA margin of 23.8% was in line with the full-year margin for 2016 (£23.6%), while pre-tax profit of £31.4 million for the first half of 2017 was up £1.0 million compared with the last half-year period.

Net debt at 30 June 2017 was £69.4 million, a reduction of £22.9 million from the start of the year due to strong operating cash generation.

Stephen Harrison, Forterra’s chief executive officer, said he was pleased with the company’s first-half performance.

‘We achieved increased sales through strong brick and aggregate block volumes, underpinned by robust activity levels in the new-build residential sector, albeit against a relatively weaker volume comparator due to supply chain destocking which unwound during 2016.

‘We also achieved underlying price increases in the first half, which mitigated increases in the operating cost base.’

Looking ahead, he added: ‘Current levels of activity from our house-builder customers and our order book growth continue to be positive, but we remain watchful over any negative impact from a weakening of consumer confidence on the housing and RMI markets.

‘The board expects to continue to make progress in the second half, and our expectations for the full year are unchanged.’