Forterra plc - AGM Trading Update

20 May 2025

FORTERRA PLC

AGM Trading Update

An encouraging start to the year

Ahead of our AGM which will be held today at 12.00pm in Northampton, Forterra plc (the 'Group'), a leading UK manufacturer of essential clay and concrete building products, provides this trading update for the four-month period ended 30 April 2025 ('the Period').

Revenue in the Period of £124.1m was 22% ahead of the prior year (£102.0m) with a strong performance in both our Bricks and Blocks and Bespoke Products operating segments.

Trading saw continued positive momentum with the Group benefitting from an improving demand environment, primarily driven by housebuilding with RM&I demand remaining subdued. Our own performance is consistent with an improving market backdrop, in which domestic brick despatches to the end of March, as reported by the Department for Business and Trade, increased 17% year on year albeit against soft comparatives.

We continue to implement the necessary selling price increases to offset cost inflation, which remains at normalised levels in line with our expectations. With demand recovering and inventories reducing we are actively managing production capacity to ensure we continue to address customer demand. We have recently taken steps to increase our production of concrete floor beams, and we are preparing to increase our brick production at Desford and expect to utilise both kilns simultaneously for the first time from Q4 2025. Whilst full output is not yet required, this marks an important milestone in the ramp-up of this facility.

We have made good progress with the reinstatement of our Wilnecote brick factory following an investment of around £30m, with the kiln expected to be lit imminently. We expect to begin regaining our position in the attractive commercial and specification market as the year progresses. Similarly, the commissioning of our innovative brick slip production facility at our Accrington factory continues to progress in line with our expectations as we develop the product range ahead of a market launch later this year.

Notwithstanding normal seasonal trends, we continue to reduce our leverage, with net debt before leases at 30 April 2025 of £88.4m (31 December 2024: £84.9m) and 30 April 2024: £118.5m) equating to 1.7 times EBITDA on a rolling 12 months' banking covenant basis (31 December 2024: 1.9 times). 

Outlook

We are encouraged by the positive start to the year and expect to continue to benefit from an improving demand environment whilst noting that the prior year comparatives become more challenging as the year progresses. We remain mindful of the presently heightened global macro-economic uncertainty and the impact this could have on the wider economy. Accordingly, at this stage in the year, the Board's expectations for the Group's full year 2025 performance remain unchanged.

Our key markets continue to benefit from attractive fundamentals including the Government's commitment to materially increase housebuilding, although we remain mindful of the challenges in delivering this. Following our recent strategic investments in additional manufacturing capacity, the Group remains ideally positioned to benefit from continued market recovery.