Forterra report strong first-half performance
Recovery in first-half trading underpinned by robust demand from new build and RM&I markets
FORTERRA plc have reported a strong performance, particularly in their Bricks and Blocks segment, for the six months ended 30 June 2021. Recovery in first-half trading versus 2020 was underpinned by robust demand from both the new build and the repair maintenance and improvement (RM&I) markets.
Group revenue was up 47% to £280.3 million compared with the first half of 2020 (£122.4 million), whilst EBITDA was up 351% at £37 million (2020: £8.2 million). Revenue in the Bricks and Blocks segment was slightly ahead of 2019 levels, with profits almost back to 2019 levels, notwithstanding operational challenges at the existing Desford brick factory.
The new Desford brick factory construction project is progressing to timetable and budget with commissioning expected in late 2022, whilst the announcement of a £27 million investment in Forterra’s Wilnecote brick factory, in Staffordshire, will increase its capacity by 20% and generate £7 million of incremental EBITDA.
Stephen Harrison, chief executive officer, said: ‘We saw a strong recovery over 2020 in the first half, which exceeded our expectations. This performance, primarily in Bricks and Blocks, was underpinned by robust demand across both the new build and RM&I markets. Overall, group revenue increased 47% over 2020 and, notably, revenue in Bricks and Blocks was slightly ahead of 2019 levels.
‘The current strong trading conditions appear set to continue in the second half of the year with our customer base signalling that they expect current levels of demand to continue. However, we remain watchful that ongoing economic uncertainty surrounding the longer-term impacts of the pandemic, coupled with the shorter-term effects of the present shortages of labour, materials and transport across the wider sector, could potentially impact demand for our products.
‘Whilst we anticipate that the result for the full year will be weighted towards the first half reflecting the timing of maintenance shutdowns, the impact of cost inflation and near-term labour and material shortages in the second half, we now anticipate a 2021 full-year result modestly ahead of our previous expectations.’