Higher Volumes Drive Annual Growth For Brick Maker Forterra

14th Mar 2018 10:56

LONDON (Alliance News) - Brick maker Forterra PLC increased its dividend on Wednesday on strong revenue and profit growth, which were boosted by strong residential market demand for masonry products.

Pretax profit for 2017 increased by 60% to GBP59.3 million. Before exceptional items the figure rose by 15% to GBP61.1 million. This came on the back of year-on-year revenue growth of 12% to GBP331.0 million.

Like-for-like revenue growth was just over 10% due to a double-digit increase in brick and aggregated block volumes after strong demand from the new-build residential market.

Forterra is paying a final dividend of 6.4 pence per share, taking its annual total for 2017 to 9.5p, an increase of 11% on 2016's payout.

Profit was boosted, Forterra said, by the increase in revenue as well as reduced interest costs due to lower debt and the refinancing of facilities during the year.

Revenue in Forterra's Bricks & Blocks division rose 13% to GBP249.5 million, and earnings before interest, tax, depreciation, and amortisation rose 10% pro forma to GBP69.1 million, with the business boosted by higher brick and block volumes.

In Bespoke Products, revenue was up 12% to GBP83.6 million, but pro forma Ebitda fell 6% to GBP6.3 million due to its precast concrete business faced numerous headwinds, such as the supply of polystyrene blocks and a lack of capacity at the Hoveringham facility in Nottinghamshire.

Performance in 2018 has been strong so far, with brick volumes up year-on-year in the first two months. Volume growth, however, is expected to be more modest in 2018, though Fronterra believes it is well positioned to deliver going ahead.

Chief Executive Stephen Harrison said: "Forterra delivered a strong profit and cash performance in 2017, our first full year as a listed company. Revenue was up over 10%, primarily due to a strong performance from the new build residential market, and we also completed the strategically important acquisition of Bison which has given us a leadership position in the precast concrete products market.

"We are particularly pleased with our cashflow performance which enabled us to reduce our net debt to Ebitda ratio to below one times after paying for the acquisition."

Fronterra shares were trading at 296.00p each on Wednesday, up 0.2%.

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