The ‘Beast from the East’ snowstorm that hit the UK earlier this year led to a slowdown in business for Forterra (FORT). The construction industry was slow to recover following the cold weather, with multi-unit housing and large infrastructure projects bearing the brunt. While both divisions of the brickmaker were impacted, it was more acute in the bespoke products division where cash profits fell 77 per cent to £0.7m. But the recent acquisition of precast concrete business – Bison Manufacturing – ensured revenues kept ticking up in the first half. And with the impact of the weather subsiding, precast order levels are now broadly in line with expectations.
Given the challenges in bespoke products, the bricks and blocks division carried the business in the period. The group is working to increase brickmaking capacity through its redevelopment of the Desford site. Upgrading the kiln in the first half of the year added 5m bricks per annum to the group’s capabilities, while work at the Accrington site scheduled for the second half is due to add a further 10m.
Analysts at Numis expect adjusted pre-tax profit of £65m in 2018, giving EPS of 25.7p (from £61.1m and 24.1p in 2017).
| FORTERRA (FORT) | ||||
| ORD PRICE: | 297p | MARKET VALUE: | £595m | |
| TOUCH: | 297-298p | 12-MONTH HIGH: | 340p | LOW: 260p |
| DIVIDEND YIELD: | 3.3% | PE RATIO: | 12 | |
| NET ASSET VALUE: | 58p | NET DEBT: | 44% | |
| Half-year to 30 Jun | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2017 | 163 | 31.4 | 12.6 | 3.1 |
| 2018 | 180 | 32.3 | 13.0 | 3.3 |
| % change | +11 | +3 | +3 | +6 |
| Ex-div: | 20 Sep | |||
| Payment: | 11 Oct |
