Business
Pre-AGM trading update
Pre-AGM trading update.
About this update from Forterra Plc
[{"type":"text","content":"\n\n16 May 2023\n \nFORTERRA PLC\n \nPre-AGM trading update\n \nYTD result in line with expectations despite challenging trading conditions\n \nAhead of a capital markets event coinciding with the formal opening of the new Desford brick factory tomorrow and in advance of our AGM on 23 May, Forterra plc (the 'Group'), a leading UK manufacturer of essential clay and concrete building products, provides this trading update for the four-month period ending 30 April 2023 (the 'period').\n \nResults\n \n· Profit before tax in the period was in line with management's expectations with revenue for the period of £109m a decrease of 24% on the prior year (2022: £143m)\n· Cost base stabilising, however inflation persists in certain categories in line with expectations\n· Approximately 80% of YTE energy requirements secured, albeit at higher rates than 2022 due to the expiry of historic forward purchases made at advantageous rates\n \nMarket backdrop and outlook\n \n· Our expectations for the year remain unchanged based upon an underlying fall in full year market demand of 20% relative to 2022\n· Whilst industry brick despatches fell 32% relative to the prior year in the three months to the end of March, we continue to expect market conditions to improve as the year progresses\n· We believe the levels of inventory reduction within our customer base have been a major factor in our YTD performance and expect this to ease going forward\n· Brick imports have begun to fall sharply, reducing by 45% relative to 2022 in the three months to the end of March\n· Improving housebuilder reservation rates provide cause for optimism and an improving outlook for H2 2023 and into 2024\n· The result for the full year will be weighted towards H2 reflecting the anticipated improvement in market conditions\n \n \nCapacity Management\n \n· Production at the new Desford brick factory continues to ramp up and the old factory ceased production as planned at the end of March\n· With the new factory becoming operational at a time of subdued demand, disciplined capacity management is key to our ongoing success and we ar...