Shares in Britain’s second largest brick maker nudged up two per cent this morning after it released its first results since listing in April.
They revealed “further progress” by the company and post-Brexit brick sales that were higher than the same period in 2015.
Forterra's six-month revenue was broadly in line with the prior year at £146m, down from £151m, which translated into pre-exceptional Ebitda that was almost the same at £40m.
Exceptional items totalled £10.3m (compared to £1.5m in 2015) of which the largest slug (£9.1m) related to the transaction fees for the floating in the company.
Operating cash flow was up at £32m, a £3m improvement from the same period a year before.
As part of the listing, Forterra agreed new lending facilities that comprised a £150m term loan and £30 revolving credit facility (RCF). Both have a five year maturity.
Why it’s interesting
Britain needs bricks. A recent survey by National Association of Estate Agents and Cebr said a the total needed was 1.4m to satisfy new housing needs.
Forterra said that it direct brick sales to housebuilders grew at “double-digit” rates but the overall division was adversely impacted by the fact that builders merchants currently have excess stocks, which depresses demand from them.
Pre-exceptional Ebitda looks unexceptional. But when you take into account the fact that this includes over £10m of listing fees, it is up over 20 per cent.
The debt package provides Forterra with breathing space to function in the medium term. Nearly all of the £150m has been drawn but the RCF wasn’t touched when the accounts were drawn on 30 June 2016
What Forterra said
Chief executive Stephen Harrison said:
We are pleased to report our inaugural results as a listed company, which show further progress on the delivery of our strategy.
We aim to continue to capitalise on the attractive fundamentals in the UK housing industry and to grow our business in the medium term by utilising our existing, well-invested manufacturing facilities, available production capacity and inventories.
Although there remains a degree of uncertainty through to the end of the year, trading in the first two months of the second half has been in line with our expectations, with brick volumes in both July and August ahead of the corresponding period for 2015.