Trading Update

RNS Number : 9493F

Forterra plc

01 November 2018

 

This announcement contains inside information and is disclosed in accordance with the Company's obligations under the Market Abuse Regulation (EU) No 596/2014

1 November 2018

Forterra plc

Trading update

Forterra plc, a leading UK producer of manufactured masonry products, provides this trading update covering the period from 1 July to 31 October 2018.

Trading in the period has been in line with expectations, underpinned by good levels of activity in the new build residential sector, with brick sales on a year to date basis being marginally ahead of prior year. Sales of precast concrete products have improved as previously anticipated and whilst capacity utilisation has increased at the newly acquired Bison Swadlincote facility, further improvements in productivity are being pursued.

During the period, the Group has continued to absorb significant cost pressures, especially from rising prices of energy, fuel and carbon credits (required under the terms of the EU Emissions Trading Scheme), and the impact of the lower productivity at Bison.

The Group continues to generate a strong level of operating cashflow and net debt at 30 September 2018 was £56.1m compared with £60.8m at the start of the year reflecting also capital expenditure, dividend payment and the ongoing share purchase programme.

Following a recent overheating of the kiln at the Group's Desford brick manufacturing facility, resulting from a prolonged power outage, it has become necessary to shut the kiln for repair for approximately six weeks. After a detailed inspection, the Company considers a full rebuild of the damaged sections of the kiln, rather than temporary repair ahead of the next planned shutdown, to be in the medium term the most prudent and cost-effective option. The impact on current year operating profit of lost production and sales and the cost of repair is estimated to be between £2m to £3m.

As a result, the Board now anticipates that profits for 2018 will be marginally below its previous expectations.

Enquiries

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

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

 

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