16th May 2023 12:04
(Alliance News) - Forterra PLC on Tuesday said revenue declined in the four months to April 30, but it expects an improved performance in the second half of the year.
The Northampton, England-based building product manufacturer said pretax profit for the four months to April 30 was in line with expectations, while revenue was GBP109 million, down 24% from GBP143 million the year prior.
Looking ahead, Forterra said its expectations for the full year are unchanged, due to an underlying 20% fall in market demand in 2022. The company noted that improving housebuilder reservation rates have boosted its outlook for the second half of 2023 and into 2024, with full-year results set to be weighted towards the second half.
Forterra noted that brick despatches fell 32% in the three months to March 31, while brick imports dropped by 45% in the same period.
However, the company said production at its new Desford Brick factory is being ramped-up, while its old factory ceased production at the end of March.
Chief Executive Neil Ash said: "Our expectations for the year are based upon an underlying fall in market demand of 20% relative to 2022. With the inventory reduction within our customer base still ongoing, the decline in demand we have seen in the period is greater than 20%. However, we do expect demand will improve as the year progresses, noting the improving conditions cited by the housebuilders over recent weeks.
"We believe the group is well placed to meet the short-term challenges we face and remain confident in the medium to long-term fundamentals of our markets. This confidence is underpinned by a longstanding shortage of housing supply, the strong cross-party political support for housebuilding and a long-term deficit of domestic brick production capacity."
Forterra were down 3.8% to 186.40 pence each in London on Tuesday.
By Harvey Dorset, Alliance News reporter
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