Pre-close trading update

RNS Number : 2031D

Forterra plc

05 July 2016

 

Forterra plc

Pre-close trading update

Forterra plc ("Forterra" or the "Company"), a leading UK producer of manufactured masonry products, provides this pre-close trading update with respect to its half year ended 30 June 2016.

Overall, the profit for the first half is in line with management's expectations at the time of the IPO in April 2016 and, as anticipated, brick sales volumes were weighted towards house builders. Sales to the builders' merchants have been affected by excess inventory continuing to be held by the merchant sector. The Group continued to generate a strong level of operating cash flow and net debt at the end of June was around £20m better than expectations.

Given current economic uncertainty and sufficient brick inventory levels, the Board has reviewed the current production plan and has decided to maximise the utilisation of our most efficient brick plants and effectively manage our cost base.

The Company will therefore enter into consultation with employees at its brick factories in Accrington and Claughton, in Lancashire, proposing to temporarily mothball the plants.  This is a prudent action that will allow us to continue to meet customers' needs while effectively managing our costs and cash position until we are able to more effectively forecast demand.

Both of these brick plants were mothballed between 2010 and 2014 and the Company has demonstrated its capability to successfully bring production back online in a short period of time.

Forterra has sufficient brick inventory and production capacity to service customer demand should housing output continue to grow as previously expected. 

The Board continues to believe that in the medium term the fundamentals driving demand for our products are attractive and is confident that Forterra's strategy will drive value for shareholders. We will provide an update on the market outlook with our interim results on 7 September 2016.

Enquiries

Forterra plc:	[phone]
Stephen Harrison (CEO)
Shatish Dasani (CFO)
FTI Consulting:	[phone]
Richard Mountain
Nick Hasell

Forterra plc

Further information relating to the Company and its group can be found at www.forterraplc.co.uk

Note: This announcement contains inside information which is disclosed in accordance with the Market Abuse Regulation which came into effect on 3 July 2016

 

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