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  • 01 Nov 18

Electrical force majeure to hinder 2018 profits

Forterra has “marginally” pulled back profit guidance for FY 2018E due to the temporary closure of one of its brick plants, caused by a local power cut. We have cut our PBT estimate for the current year by £3m, at the high end of the company’s indicative £2 - 3m impact of the closure and repairs. This is the first profit warning since Forterra IPO’d in April 2016. The fact the shares rose on today’s announcement suggests to us the market interprets this entirely as force majeure.

Companies: Forterra
  • 18 Oct 18

Does sector weakness belie fundamentals?

Shares of housebuilders have fallen, possibly prompted by concerns about home prices and margins, potentially triggering weakness in the wider sector. We believe, however, that developers and basic material producers such as Forterra have limited exposure to those drivers and operate under very different dynamics. Their pricing power is underpinned by low inventories and a consolidated sector. The positive demand-supply situation could improve further due to new government housebuilding initiatives.

Companies: Forterra
  • 30 Jul 18

Stronger foundations?

Forterra’s guidance in its HY results today that FY 2018 results would be “in line” contrasts with this morning’s unscheduled trading update from larger rival Ibstock, warning on 2018 profits, due to production difficulties, needing more spending. We believe that Forterra, the UK’s number two, is reaping the benefits of several plant upgrades since the IPO and more aggressive rationalisation during the last downturn. We have kept our PBT, EPS and DPS estimates unchanged.

Companies: Forterra
  • 25 May 18

Outlook fair despite ‘beastly’ weather

Forterra’s AGM statement revealed that poor weather from the ‘Beast from the East’ had delayed production and deliveries during Q1 – in common with the rest of the sector – but predicted the shortfall would be made up during the rest of the year and that the outlook for the year remained in line with its expectations. It also outlined in detail its previously flagged plans to boost capacity by c. 100 million bricks.

Companies: Forterra
  • 19 Mar 18

Time to press the button

Two features stood out in Forterra’s first full year results since its IPO: another significant ‘beat’ on cashflow expectations; and the formal signal that Britain’s second biggest brickmaker was to ‘press the button’ on a new plant, having previously waited until there was clear evidence of sustainable housebuilding demand. We believe the time is right, but that the company will remain measured in its expansion, in keeping with what we believe is its conservative track record.

Companies: Forterra
  • 09 Mar 18

Mind the gap

Next week’s FY 2017E results from Forterra, we envisage, are likely to feature the continuing sector theme of the gap between demand and supply for bricks – an issue highlighted in rival Ibstock’s figures. Latest government data show stocks at almost the same lows as during the “shortages” of 2014, amid new recent highs in imports. Government policies to increase housebuilding supply indicates to us that there is scope for Forterra to move ahead with measured capacity increases.

Companies: Forterra
  • 25 Jan 18

Pump up the volume

Chancellor Philip Hammond’s Budget pledged to add 300,000 homes a year, up from 185,000 in 2016. This should support or even strain a favourable supply-demand balance, underpinning pricing of Forterra’s bricks, blocks and specialist products. The Bison deal may bring innovative systems to build homes faster. We have nudged up FY 17E estimates after the November trading update, but suspect the mid-term outlook could improve further, given this positive backdrop.

Companies: Forterra
  • 01 Aug 17

Solid H1 earnings and cash flow bode well for FY

Strong demand in the newbuild housing market helped towards a good first half result, in terms of meeting our FY 17 EBITDA and another strong cash performance. Although company guidance for the FY is unchanged, we sense there is scope for slight outperformance, since the H1 result represents 53% of our FY estimate. Net debt was c. £10m below our estimates, before the Bison acquisition, which we thought was a positive move

Companies: Forterra
  • 28 Jul 17

Bison deal concretes group growth ambitions

Brick and concrete products manufacturer Forterra has broadened its end markets and added to the group's growth prospects with what we see as the opportunistic £20m acquisition of the trade and assets of Bison Manufacturing from loss-making construction group Laing O'Rourke. Forterra states that it would have cost over £35m to build the business itself on a greenfield site and estimates that the deal will make returns in excess of its cost of capital during 2019. We estimate it will at least break even in 2018.

Companies: Forterra
  • 26 May 17

Building momentum

Strong housebuilding data, encouraging statements from leading housebuilders and the Conservative Manifesto’s pledge to build 1.5 million homes by 2022, reinforce, in our view, the robust tone of Forterra’s AGM statement. This indicated strong brick demand and overall trading in the first four months and, once again, impressive cash flow. Short-, mid- and long-term trends appear encouraging, in our view.

Companies: Forterra
  • 21 Apr 17

Happy returns

A year to the day after the IPO, Forterra's US private equity owner has placed its entire remaining c. 53% holding at 195p – a 5% discount to yesterday's closing price. The placing was larger than initially proposed yesterday "due to strong investor demand". We believe the market may have viewed the 'overhang' as a concern and this might have partly explained the stock's discount versus larger rival Ibstock (IBST). The shares have reacted positively in early trading, rising to a new high. This comes against what we see as a positive backdrop for suppliers of bricks and other new housing products.

Companies: Forterra
  • 16 Mar 17

Glass (at least first) half full

The top three brickmaker’s FY 2016 results announcement gave an upbeat outlook, for at least the first half of the current financial year, driven by “strong” house-building levels and a reduction in the stock overhang among builders’ merchants. It maintained guidance for FY 2017E. We have trimmed back our estimates, which were slightly ahead of consensus, principally to reflect a higher depreciation charge than we had modelled. We continue to believe that Forterra offers long-term growth, fuelled by Government housing policy.

Companies: Forterra
  • 03 Mar 17

A tonne of bricks

Government aid to boost housebuilding could require at least half a billion more bricks by 2021, we estimate. This reinforces what we see as Forterra’s attractions to investors: a fundamental product, underpinned by long-term demand; a consolidated market; and conservative management. Forterra has, in our view, a particularly attractive risk-reward balance and an undemanding valuation relative to its peer group.

Companies: Forterra
  • 13 Dec 16

Brick stock overhang continues to abate

Latest building materials data from the government shows that the level of brick stocks held by manufacturers has fallen for five months and is now 11% below their recent peak in May 2016. Moreover, the more representative YoY rate of increase has narrowed almost every month for a year as manufacturers, particularly Forterra, have trimmed production, while imports have also normalised. This, in our view, could support pricing power and help dispel concerns among some investors about over-stocking by big customers.

Companies: Forterra
  • 24 Nov 16

Chill for agents, spring in housing volumes

Yesterday’s Autumn Statement appears to be: good for 'alternative' housing providers, UK-focused contractors and materials producers; potentially problematic for mainstream housebuilders; and bad news especially for lettings-dominated agents. Chancellor Philip Hammond’s key spending measures included an additional £3.7bn funding to boost new housing volumes and £1.1bn for roads. Shares in estate agents, however, have fallen in response to the threat to ban them from charging fees to tenants.

Companies: GFRD KIE FORT CWD FOXT WINK COST

Research, Charts & Company Announcements

Research Tree provides access to ongoing research coverage, media content and regulatory news on Forterra. We currently have 22 research reports from 3 professional analysts.

Open
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Range Today
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52 Week
211/333p
Market Cap
£0m
Enterprise Value
£60.8m
Pension Liability
£0m
# Shares
0m
Latest PE (hist)
11.48
Div Yield
3.37

Latest News/RNS

(more news)
Date Source Announcement
04Dec18 14:27 RNS Employee Benefit Trust Share Purchase
27Nov18 12:23 RNS Holding(s) in Company
20Nov18 10:30 RNS Replacement Director/PDMR Shareholding
20Nov18 09:12 RNS Director/PDMR Shareholding
19Nov18 13:30 RNS Director/PDMR Shareholding
06Nov18 08:55 RNS Employee Benefit Trust Share Purchase
01Nov18 07:00 RNS Trading Update
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  • 13 Dec 18

Protecting shareholder value

Strix announced three important updates in relation to its IP and patent protection in an RNS yesterday. This announcement is important both for the quality of the company’s growth and for the valuation placed on the company’s shares. As a result, we view it positively.

Companies: Strix Group
  • 11 Dec 18

FY18 PBT in line; Positive dividend surprise

Driver’s FY18 results were well flagged in the October trading update (EPS upgrades of 9%/12% in FY18/19 at the time). Today’s results are in line with expectations, highlighting a year of significant profit growth. Adj. PBT increased by 54% to £3.8m, driven by higher utilisation rates (80% in FY18 vs. 76% in FY17) and a focus on higher margin work (e.g. growth in services provided by Diales). The turnaround has been delivered and management’s focus is now on growing revenue, profit and cash generation. The outlook statement is positive and a return to dividend payments (0.5p final dividend recommended) is a statement of management’s confidence in the outlook for the Group. We believe earnings momentum will continue to drive the share price higher and we expect a positive reaction to today’s results.

Companies: Driver Group
  • 11 Dec 18

FY18 results in line with October guidance

Zytronic reported results for FY18 in line with its October guidance, with adjusted PBT down 16%. This was driven by a decline in gross margin, due to operating inefficiencies resulting from lower revenues to its Financial end market, and yield problems as new designs for the Gaming market, requiring new processes, moved into production. We have made no changes to our forecasts for adjusted PBT and EPS, which assume modest sales growth and no uplift in margin while the group works to improve yields. These put the shares on an EV/EBITDA multiple of 7.6x for calendar 2019, which represents a c.13% discount to the smaller cap goods stocks.

Companies: Zytronic
  • 14 Dec 18

LIBERUM: SThree* - Strong 4Q and encouraging outlook enables CEO to leave on high

Although the announced departure of CEO Gary Elden is s surprise, it comes at a time when momentum in the business is strong and the strategic shift undertaken during his six year tenure is paying off. This is evidenced by the 12% growth in underlying gross profit during 4Q18, driven by strong momentum in both the US and EU businesses.

Companies: SThree
  • 12 Dec 18

LIBERUM: Volex* - GTK deal 11% accretive to FY20 EPS

We estimate that the acquisition of GTK will be 11% accretive to FY20 EPS. An EV of £13m equates to an underlying trailing EV/EBIT multiple of just 5.7x, which appears very good value for a company that has delivered a three-year revenue CAGR of 14% and compares to Volex which trades on an FY20 EV/EBIT multiple of under 6x.

Companies: Volex
  • 13 Dec 18

LIBERUM: Speedy Hire* - Acquisition of Geason scales up services and boosts EPS

Speedy has acquired Geason, a leading provider of construction and professional services training for an initial consideration of £9m and deferred payment of up to a further £26m over three years based on an ambitious earn-out schedule. The acquisition contributes to management’s strategy of improving the proportion of revenues from services and brings critical mass to training, allowing Speedy to better utilise spare training facilities with new training staff.

Companies: Speedy Hire
  • 04 Dec 18

Share & share alike

Market volatility persists with an agreement between the US & China to defer further tariff increases lifting major indices. However, the uncertainty surrounding the Brexit process continues to dominate in the UK. The impact on our universe is clear from the table below with AIM notably weaker. The reporting season runs on, though it should lighten, ahead of the festive season next week just as the progress of the Brexit deal reaches a crescendo. In Share News & Views we comment on AorTech*, Begbies, Bonhill*, FireAngel*, Golden Ocean, IG Design, Location Sciences*, Menzies, Nucleus & Synectics*.

Companies: AOR APC BONH BMS CTG CRPR DMTR ESC EUSP FDM FA/ LSAI NKTN PCF SNX TCN W7L

  • 07 Dec 18

Strong trading and industry opportunity

Gateley’s trading statement in respect of 1H 2019 was sparkling, with 20% revenue growth in 1H and a highly confident outlook for 2H. We expect to revise our forecasts up by £2m at the revenue line and by more than £0.5m in EBITDA with the interims, a highly positive picture 7 months into the financial year, after upward revisions with the finals. A broad-based law-led professional services group, it is a leader in serving the UK mid-market. It is delivering on its pre-IPO plan, growing revenue, profit, breadth of service offering and geographical footprint since flotation. The opportunity for long-term growth at Gateley is substantial.

Companies: Gateley
  • 07 Dec 18

Boku - Accelerating mobile identity offering

Boku has accelerated its move into products adjacent to its carrier billing services – it had already started developing mobile identity verification services, and the acquisition of US-based Danal will add a fully formed business in this field and bring a new set of customers. Boku is paying mainly share-based initial consideration of $37.2m, with up to a further $64m payable in equity if ambitious revenue targets for FY19 are achieved. While initially dilutive, the deal broadens the company’s product portfolio and expands the types of merchants it can serve, supporting Boku’s growth prospects in the medium- to long-term.

Companies: Boku
  • 04 Dec 18

Cenkos: Fulcrum Utility Services Ltd - On track to deliver

Fulcrum's interims illustrate a robust H1/19A delivery, in which the core infrastructure services and utility assets businesses have continued to grow organically at double-digit rates, now supplemented by the synergistic acquisitions of Dunamis and CDS. The anticipated margin on future projects across the Group to be delivered in H2/19E are above that previously forecast. We expect this increase to offset the delay in the delivery of the Dunamis order book owing to external market factors. Asset ownership is beginning to scale, notably with external agreements developing. We consider today's update to indicate in-line FY19E trading.

Companies: Fulcrum Utility Services
  • 16 Oct 18

Positive conclusion to FY18, ahead of forecast

Driver continued to trade positively throughout H2, with FY18 results expected to be ahead of expectations. As a result we have increased our EPS forecasts by 9%/12% in FY18/19 (0%/16% including share based payments). The outperformance was driven primarily by higher utilisation rates (80% in FY18 vs. 76% in FY17) and a focus on higher margin work (e.g. growth in services provided by Diales). Driver’s management team has successfully delivered on its turnaround plan. Since the February 2017 placing, we have cumulatively upgraded our EPS forecasts by 56% and 53% respectively. The focus is now on delivering continued revenue and profit growth. We believe earnings momentum will continue to drive the share price higher and we expect a positive reaction to today’s trading update.

Companies: Driver Group
  • 17 Oct 18

October investment case review

The current liquidity squeeze on UK small cap has had a disproportionate impact on the Gateley share price and presents an attractive entry point. Gateley generates a high quality earnings stream given the organic growth record from a broad service offering and significant litigation expertise that implies meaningful defensive characteristics. Revenue CAGR of 12.3% and PBT CAGR of 14.3% in the three years since IPO highlights a management team delivering to a clear growth strategy. This is not reflected in a rating that is now at a meaningful discount to comparable professional service groups; attributing a sector average rating infers 31% upside from current depressed share price levels.

Companies: Gateley
  • 08 Nov 18

Getting its ‘Mojo’ back

As with any walk of life, the occasional setback is inevitable when tackling complex new challenges. The key is recognising when difficulties arise, responding quickly, learning from the experience and ultimately reaching one’s goals - perhaps via a different route. It’s no different in the corporate world.

Companies: Gattaca
  • 23 Oct 18

Quarterly Research Outlook

The June IPO of Knights Group Holdings, a Top-100 regional law firm, marked the fifth entrant to the burgeoning UK-listed legal sector. Following recent expansion of our coverage across all five listed legal firms, complemented by coverage of three broader support services peers with exposure to the sector, we revisit and build upon our views on this rapidly evolving sector.

Companies: ARS GTLY GENL KEYS KGH MNO RBGP TWD 7DIG ABBY AMS AMER ANX ARS ATYM AVON BLVN PIER CGS CAML CALL CSRT TIDE DTG DEMG ELM EMR FPM FPO FST GTLY GENL GRI GEEC HDY HMI HAYD HEAD HILS HTG HUR IBPO IOG INDI JHD JOG KEYS KGH LAM MACF MNO MKLW NAH OXIG PCA PARK CAKE PDG RBW RMM REDD RSW RNO RKH RBGP ROR SUS SCPA SHG SOLG TWD TRAK TRI VNET VTC ZTF

  • 23 Oct 18

Q3 trading update: on track, no surprises

Overall trading was in line for the nine-month period, with revenue growth of 54%, of which organic growth was 6.7%, with a significant boost gained from the acquired Balu operations. Q3 was solid, but as previously signalled, the buoyancy seen at the start of the year has now settled to a steadier pace, with a cautious tone for the outlook for 2019. We reiterate our recently reduced forecasts. The shares remain deeply oversold, on a substantial discount to its peers. We see significant upside once growth is delivered on schedule, which should provide a catalyst to narrowing the current valuation gap.

Companies: Flowtech Fluidpower