5th Jul 2016 09:11
LONDON (Alliance News) - Forterra PLC on Tuesday said its profit in its first half is in line with management expectation, noting that brick sales volumes have been weighted towards house builders, but said it was planning to mothball two of its brick factories in Lancashire in a bid to manage costs.
The brick maker said its profit was in line with expectations set at its initial public offering in April, despite sales to builders' merchants being affected by excess inventory continuing to be held by the merchant sector. As such, sales have been weighted towards house builders, Forterra said.
The group continued to generate a strong level of operating cash flow and net debt at the end of June was around GBP20.0 million better than expectations, Forterra added, but noted that, given the current economic uncertainty and sufficient brick inventory levels, it was maximising the use of its most efficient brick plants and managing its cost base.
As such, Forterra said it was entering into a consultation with its employees at its brick factories in Accrington and Claughton, in Lancashire, proposing to temporarily mothball the plants.
"This is a prudent action that will allow us to continue to meet customers' needs while effectively managing our costs and cash position until we are able to more effectively forecast demand," Forterra said in a statement, adding that these sites were mothballed between 2010 and 2014, and that it showed it could bring production back online in a short period of time following this.
Shares in Forterra were down 4.1% at 123.50 pence on Tuesday.
By Hannah Boland; [email protected]; @Hannaheboland
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