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LONDON (Alliance News) - Masonry products firm Forterra PLC on Monday said it has received planning approvals for a new GBP95 million brick facility in Leicestershire.
The new facility will be built at Forterra's existing site at Desford, and the company said this was a "positive development".
Forterra's new facility will be "the largest and most efficient" brick factory in Europe, with a capacity of 180 million bricks a year. The existing plant can make 85 million bricks a year, and will remain operational until the new one is fully completed.
Forterra expects this to happen during 2022, and it is already finalising contracts for building work and equipment supply.
Forterra said the new facility will lead to increased earnings due to higher volumes and reduced costs, adding: "In view of this, the board has decided to increase the dividend payout to 45% of earnings for 2019 and to maintain the progressive policy thereafter.
"This increase reflects the board's confidence in the position of the group and its future potential."
In 2018, Forterra increased its dividend 11% to 10.5 pence.
On current trading, Forterra said trading in the first four months of 2019 has met expectations, helped by positive activity in new housing. Brick sales are "modestly" ahead year-on-year.
"As reported previously, price increases for the year have been agreed with most major customers to offset the increase in the cost base. Group revenue for the four months was 7.8% ahead of the same period in 2018, reflecting the positive start to 2019 and also the weather-affected weaker comparative," said Forterra.
"The group continues to generate good levels of operating cashflow, despite an expected increase in working capital due to the spring selling season."
"Whilst we remain watchful of the impact of the current uncertainty on our end markets, based on the good start to the year as well as indications of demand from major customers, the board's expectations for the full year remain unchanged," the company added.
As previously announced, Chair Paul Lester is leaving at the end of the AGM, to be replaced by Justin Atkinson. Non-Executive Director Katherine Ker will become senior independent director.
Shares were 1.6% higher on Monday morning at a price of 292.00 pence each.
