Forterra plc Trading Update (2439P)
November 16 2016 - 2:00AM
UK Regulatory
TIDMFORT
RNS Number : 2439P
Forterra plc
16 November 2016
16 November 2016
Forterra plc
Trading update
Forterra plc, a leading UK producer of manufactured masonry
products, provides this trading update covering the period from 1
July 2016 to 31 October 2016.
Trading in the period has been encouraging, with brick sales
volumes running ahead of prior year in each month and now also on a
year to date basis. The Group continues to see strong levels of
activity from the major housebuilders and the excess inventory
being carried by merchants is working through the supply chain, as
expected. At the same time the level of brick imports has reduced.
Based on this, operating profit for 2016 is anticipated to be in
line with management's expectations.
The business continued to generate a strong level of operating
cashflow, enabling net debt to be reduced further to GBP112.1m at
31 October 2016 after payment of the interim dividend of GBP4.0m
(2.0 pence per share). Net debt to EBITDA (calculated with
reference to the last twelve months of earnings before exceptionals
up to June 2016) was 1.7 times at October 2016 compared with 2.2
times at IPO.
In line with its strategy of continuing to optimise its
manufacturing footprint and adding incremental capacity through
debottlenecking projects, the Board has recently approved capital
expenditure of GBP6.5m at two of its brick facilities. At Desford,
the project to increase gas capacity and install new kiln burners
has commenced, with an estimated brick capacity increase of 10
million per annum. Capital expenditure has also been authorised to
replace the old dryers at Claughton which will improve the
efficiency of the production process and yield an additional volume
of 5 million bricks per annum. The Claughton kiln was turned off in
August 2016 as previously announced, and it is planned to carry out
the work in the first half of 2017 in order to be in a position to
relight the kiln in Summer 2017.
In October 2016, the Group completed the sale of its Structherm
subsidiary in order to focus on improving and growing the core
businesses of bricks, blocks and other concrete and clay building
products. Structherm manufactures structural external wall
insulation solutions for residential buildings, and recorded sales
of GBP3.7m and EBITDA of GBP0.1m in 2015. Its net asset value at
disposal (excluding cash) was GBP0.1m.
The Group launched its Sharesave scheme in October and was
pleased with a strong participation rate of 62% from employees who
elected to save up to GBP500 per month for a period of three years.
The scheme has resulted in the grant of 4.7m options in the
ordinary shares of the Company to these employees.
The Board continues to believe that the fundamentals driving
demand for our products are attractive and is confident that
Forterra's strategy will generate value for shareholders.
Enquiries
Forterra plc: +44 (0) 1604 707 600
Stephen Harrison (CEO)
Shatish Dasani (CFO)
FTI Consulting: +44 (0) 20 3727 1340
Richard Mountain
Nick Hasell
Conference call
The Company will hold a conference call for analysts and
investors at 8am today. To participate please dial +44 (0) 20 3139
4830, participant PIN code 59524169#. For replay please dial +44
(0) 20 3426 2807, PIN code 679317#.
Site visit
The senior management of Forterra are hosting a site visit for
analysts and investors on Thursday 17 November at its Measham
facility. No new financial information will be made available at
this event.
Further information relating to the Company and its group can be
found at www.forterraplc.co.uk
This information is provided by RNS
The company news service from the London Stock Exchange
END
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