Forterra plc Trading Update (5078T)
25 November 2021 - 5:59PM
UK Regulatory
TIDMFORT
RNS Number : 5078T
Forterra plc
25 November 2021
25 November 2021
FORTERRA PLC
Trading Update: Continued Strong Performance
Forterra plc, a leading UK producer of manufactured masonry
products, provides this trading update covering the four months
ended 31 October 2021 (the "period").
Headlines
-- Strong trading performance in the period with brick sales
volumes up 6% vs 2019 leaving YTD brick sales volumes in line with
2019
-- Significant cost inflation experienced across a range of
categories including energy, raw materials and transportation. c90%
of energy requirement secured for remainder of the year
-- Concrete product selling price increases to recover cost
inflation have already been achieved with significant brick price
increases secured from 1 January 2022
-- Accordingly, we expect to deliver a 2021 result in line with management's expectations
-- Strong market demand has meant that inventory levels remain at very low levels
-- Short term impact on margins experienced due to cost
inflation in 2021, but selling price increases are expected to
benefit margins in 2022
-- Positive market demand dynamics looking into 2022 although
business remains broadly capacity constrained until Desford brick
factory commissioning
-- Around 60% of total energy requirements secured for 2022 with
c85% secured for Q1 when risk of volatility is greatest
-- Desford and Wilnecote expansion projects progressing
according to plan with commissioning of Desford expected in Q4
2022, within GBP95m budget
Stephen Harrison, Chief Executive of Forterra plc commented:
"The strong trading seen in the both the housebuilding and
repair maintenance and improvement (RM&I) markets in first half
of the year continued into the second half. As expected, we
encountered significant pressures across our supply chain in the
period, although, due to the agility of our operational management,
we have been successful in limiting any disruption. We also
experienced meaningful input cost inflation, which has had a
short-term impact on margins, however we are mitigating this
through significant selling price increases. Notwithstanding these
factors, we continue to anticipate delivering a full year result in
line with management's expectations, with higher than expected
revenues offsetting the increased cost base.
"Heading into 2022 we are optimistic about the continuing
buoyant demand for our products, underpinned by favourable market
fundamentals. With the brick capacity uplift provided by the new
Desford brick factory now only a year away, and with the Wilnecote
project increasing our presence in the commercial and specification
market from 2023, we are confident that Group performance will
continue to strengthen."
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
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END
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