Forterra (FORT) Trading Update summary

Trading and financial performance

• Revenue for 2024 was approximately £345m, matching the prior year, with H2 showing double-digit growth over both H1 and the previous year.

• Adjusted EBITDA is expected to be around £50m, aligning with previous guidance.

• Strong operating cash inflow of about £60m, a significant turnaround from a £5.3m outflow in 2023, driven by output alignment and disciplined cash management.

• Net debt before leases reduced to around £85m, with leverage at 1.9x, despite over £20m in capital expenditure on strategic projects.

Market conditions and outlook

• Modest improvement in trading conditions observed late in 2024, with resilient despatches during a typically slow period.

• UK brick despatches up 1% year-on-year for the 11 months to November, and 18% higher in the last three months of that period.

• Total UK brick consumption in 2024 remains about 30% below 2022 levels.

• Macroeconomic uncertainty clouds the timing and pace of market recovery, with government housing policy and stamp duty changes being key watchpoints.

Strategic initiatives and capacity

• Strategic investment programme of £140m at Desford, Wilnecote, and Accrington facilities is nearing completion.

• These upgrades will deliver a 15% increase in brick manufacturing capacity and improved efficiency.

• 85% of 2025 energy requirements secured, with good coverage for 2026 and 2027.

• Selling price increases for 2025 have been announced to offset anticipated cost inflation, with customer discussions ongoing.