As maiden full-year numbers go, Forterra (FORT) put in an impressive performance in 2016, with profits boosted by continued demand for bricks and aircrete blocks from the new-build housing sector.
There was further destocking in the builders merchants’ supply chain, having overstocked in the previous year. But this process now looks to be complete, which will help to accelerate demand in the coming year. Price increases have been secured, and brick volumes in the first two months of 2017 are running ahead of the previous year.
Forterra moved towards concentrating on its three primary businesses; bricks, blocks and bespoke products such as chimneys and roofing, and in October it sold small subsidiary Structherm, which manufactures external wall insulation for residential buildings.
Operational cash flow was up £16m at £69.8m, which helped to drive down net debt from £155m at the April 2016 flotation to £92.3m, with net debt at 1.3 times cash earnings against 2.2 times at IPO. This was achieved a year ahead of the targeted schedule to reduce the leverage level to below 1.5.
Analysts at Peel Hunt are forecasting adjusted pre-tax profits for the year to December 2017 of £59.5m and EPS of 23.8p (from £54.3m/21.5p in 2016).
| FORTERRA (FORT) | ||||
|---|---|---|---|---|
| ORD PRICE: | 208p | MARKET VALUE: | £ 417m | |
| TOUCH: | 205.5-208.75p | 12-MONTH HIGH: | 213p | LOW: 110p |
| DIVIDEND YIELD: | 2.8% | PE RATIO: | 15 | |
| NET ASSET VALUE: | 35p* | NET DEBT: | 133% | |
| Year to 31 Dec | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2013** | 226 | 1.5 | na | nil |
| 2014** | 268 | 33.4 | na | nil |
| 2015** | 290 | 22.2 | na | nil |
| 2016 | 295 | 37.1 | 13.8 | 5.8 |
| % change | +1 | +67 | - | - |
Ex-div: 15 Jun Payment: 06 Jul *Includes intangible assets of £13.7m or 7p a share **Pre-IPO figures | ||||
