Forterra H1 Revenue Falls 13.5% on Weak Demand; Full-Year Outlook Maintained

UK building products manufacturer Forterra reported a 13.5% decline in first-half revenue, citing weak market conditions and softer demand across its product lines. Despite the downturn, the company reiterated that it expects to meet full-year consensus forecasts.

Financial Performance Details

For the first half of the year, Forterra's revenue fell to £168.80 million. The company's adjusted EBITDA also decreased by 9.7% to £27 million for the period. Forterra attributed the revenue drop to a challenging market environment that impacted sales volumes.

The decline in demand varied by product category:

• Brick despatches experienced a modest fall.
• Block products saw sharper decreases in volume.

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Despite the lower revenue and earnings, the company noted that its profit margin improved. This was attributed to its strategic exit from non-core business activities.

Cost Controls and Outlook

In response to market headwinds, Forterra has implemented several cost-control and strategic measures. The company has cut production and restructured its management and support functions, a move expected to generate £2 million in annual cost savings. To offset higher input costs, partly linked by the company to the Middle East conflict, Forterra introduced low single-digit price increases for bricks and added surcharges across all its products.

Forterra also continued its £20 million share buyback program during the first half, signaling a continued commitment to shareholder returns. Looking ahead, the company anticipates that demand in the second half of the year will remain similar to the first. While acknowledging that domestic and global geopolitical uncertainty makes forecasting difficult, Forterra stated that current expectations support achieving full-year results in line with market consensus.