Forterra Regulatory News (FORT)

26 January 2021

FORTERRA PLC

TRADING STATEMENT

Forterra plc, a leading UK producer of manufactured masonry products, provides this trading update for the year ended 31 December 2020.

Current Trading & Year End Results

Our current priority remains ensuring the health, safety and wellbeing of our employees through the ongoing pandemic. Our factories remain open, operating in accordance with COVID-19 protocols, and we continue to supply our customers who, under current lockdown restrictions, remain fully operational.

We are pleased to report that the strong trading seen through September and October continued through to the end of the year, exceeding our expectations. Brick and Block revenues for November and December combined were 6% higher than the corresponding prior year period taking full year Group revenues to approximately £290m.

Accordingly, we expect to report 2020 EBITDA and PBT (both stated before exceptional items) of approximately £37m (an increase on our previous guidance of at least £34m) and £16m respectively.

We ended the year with a better than expected liquidity position with net cash of approximately £15m (stated before IFRS 16 lease liabilities) demonstrating our successful management of working capital but also reflecting some rephasing of payments on the Desford project. As at 31 December 2020 the Group had access to committed credit facilities of £170m of which £155m was undrawn.

Desford Brick Factory Construction

Project spend in 2020 amounted to £20m bringing the total to approximately £32m against the project budget of £95m. Following the previously reported insolvency of a major supplier, and after a comprehensive retendering and selection process, contracts for the supply and installation of the manufacturing equipment were signed in January. The planned commissioning of the factory remains on track for late 2022.

Outlook

Looking ahead, the steady improvement in trading through the second half of 2020, along with recent positive statements from our customers, provides growing cause for optimism, although uncertainty remains. The impact of the current Stamp Duty holiday coupled with the impending tapering of the Help to Buy scheme on underlying patterns of demand is unclear. Additionally, the wider economic implications of the UK's new trading relationship with the EU and the longer-term economic impact of the COVID-19 pandemic remain uncertain.

The Board continues to closely monitor both our markets and the wider economy and believes that the Group remains well-placed to benefit from a sustained recovery of our key markets with a structural under supply of housing in the UK expected to continue supporting long-term demand. In the shorter term, the strength of our balance sheet offers resilience against any further challenges ahead. 

We intend to issue our full year results announcement on 9 March 2021.

This announcement contains inside information for the purposes of article 7 of the Market Abuse Regulation (EU) No 596/2014.

ENQUIRIES

Forterra plc +44 1604 707 600

Stephen Harrison, Chief Executive Officer

Ben Guyatt, Chief Financial Officer

FTI Consulting +44 203 727 1340

Richard Mountain / Nick Hasell