UK's Forterra H1 revenue falls 13.5% amid weak demand
UK's Forterra H1 revenue falls 13.5% amid weak demand
Overview
UK building products maker's H1 revenue fell 13.5% amid challenging market conditions
Adjusted EBITDA declined 9.7% but margin improved after exiting non-core businesses
Company continued £20 mln share buyback and implemented cost-saving restructuring
Outlook
Forterra expects H2 demand to be similar to H1, supporting full-year results in line with consensus
Company says forecasting H2 demand remains challenging due to domestic and global geopolitical uncertainty
Result Drivers
WEAK MARKET DEMAND - Co said revenue fell due to softer demand across key product lines, with brick despatches declining modestly and block products seeing sharper drops
PRICE INCREASES AND SURCHARGES - Co implemented low single digit brick price increases and surcharges across all products to recover higher costs, including those from the Middle East conflict
COST REDUCTIONS AND RESTRUCTURING - Co undertook production cuts and restructured management and support functions, targeting £2 mln annual cost savings
Company press release: ID:nRSb0596Oa
Key Details
Metric | Beat/Miss | Actual | Consensus Estimate |
H1 Revenue |
| GBP 168.80 mln |
|
H1 Adjusted EBITDA |
| GBP 27 mln |
|
Analyst Coverage
The current average analyst rating on the shares is "buy" and the breakdown of recommendations is 7 "strong buy" or "buy", 2 "hold" and no "sell" or "strong sell"
The average consensus recommendation for the construction materials peer group is "buy"
Wall Street's median 12-month price target for Forterra PLC is GBp193.50, about 42.3% above its July 27 closing price of GBp136.00
The stock recently traded at 11 times the next 12-month earnings vs. a P/E of 11 three months ago
Reuters Recommended Reads
July 27 - Germany's Hochtief H1 operational net profit rises on infrastructure demand; raises guidance
July 27 - UK's Science Group preliminary H1 core revenue falls; expects buyback to exceed £20 mln
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(This story was created using Reuters automation and AI based on LSEG and company data. It was checked and edited by a Reuters journalist prior to publication.)