26th Jan 2022 11:41
(Alliance News) - Forterra PLC shares were lifted on Wednesday after it said it had finished off the year with strong trading, and its 2021 results will meet expectations.
Forterra's share price rose by 10% to 267.50 pence each in London on Wednesday.
The Northhampton-based building products manufacturer said revenue for the year would total around GBP370 million, up 27% year-on-year from GBP291.9 million, but down 3% on the pre-pandemic comparative of 2019 at GBP380 million. Forterra said this reflects the closure of its concrete factor, which reduced the output of bespoke products. However, brick and block revenue was up 7% on two years ago.
Forterra is commencing a share buyback of GBP40 million on Wednesday, in line with its capital allocation policy. It reports higher year-end cash than expected.
"[The share buyback] is a sign of confidence in the business and demonstrates our ability to deliver attractive returns to shareholders whilst still investing for the future," said Chief Executive Stephen Harrison.
Trading was strong across the whole year, with full-year brick sales volumes 33% ahead of the previous year, and 1% improved on 2019. In the second half, brick sales were up 5% over 2019.
Cost inflation hit a wide range of products, compounded by a sudden rise in energy costs in the final quarter. Forterra increased selling prices of its key products by double digits in late 2021, and will continue to review if any further increases are necessary. It has now secured 70% of its energy requirements for 2022.
While sales were better than expected, this has been offset by rising energy costs. Accordingly, Forterra has left its expectations for the full-year unchanged from its upgraded guidance in July.
"The continued strength of demand for our products bodes well, with customers already keen to secure supply ahead of the commissioning of our new brick factory at Desford later this year. We expect 2022 will be an important year as we prepare for a step change in output and financial performance from early 2023," Harrison said.
Full-year results will be released on March 10.
By Elizabeth Winter; [email protected]
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