24th May 2022 11:26
(Alliance News) - Forterra PLC on Tuesday said it has seen "strong" trading since the start of 2022, though it is battling with inflation and supply chain blockages, and expects its full-year result to be "materially ahead of its previous expectations".
The Northampton, England-based building products manufacturer, which is holding its annual general meeting on Tuesday, also said its chief executive will step down next year.
Forterra reported revenue for the four months that ended April 30 was 25% ahead of comparative figures from 2021 and 18% ahead of 2019. Sales volume has been ahead of plan, with brick volume 6% ahead of 2021 and 2019. Forterra provided no actual figures for revenue or volume.
Forterra said it has secured 85% of its energy requirements for 2022, reducing "volatility and uncertainty" in the face of price increases.
However, Forterra said it is experiencing further cost inflation, which it is passing onto customers. From April 1, the company increased brick prices by 12%, in addition to the 16% hike applied in January.
Further, due to supply chain issues, Forterra has delayed the GBP27 million refurbishment of its Wilnecote brick factory in Staffordshire by three months. The factory now is expected to close at the end of September, rather than the end of July, and will remain shut for 12 months.
The postponement of the closure will give a GBP1.5 million lift to financial 2022 results, the company said, contributing the outperformance it expects for the year.
Forterra also announced that Chief Executive Stephen Harrison has resigned. Harrison will remain with the company until the first half of 2023, allowing time to commission the new Desford brick factory and to support an orderly transition.
Stephen Harrison says: "After ten years in my current role, now is the right time for a change. I am proud to have led the company on its journey from non-core asset of a large corporation, through private equity ownership and IPO to be the successful independent business that Forterra is today."
The board has started the search for his replacement.
Forterra said it has completed GBP16 million of its planned GBP40 million share buyback programme, buying and cancelling 6.6 million shares.
The stock was 4.1% higher at 253.50 pence each in London on Tuesday morning.
By Sophie Rose; [email protected]
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