Brickmaker says key its sales will be spring selling season
Forterra saw turnover and profit jump in 2022 but warned investors of weaker demand in the year ahead as housebuilders build fewer homes.
In its annual results, published this morning, the brickmaker reported revenue of £456m last year, a rise of 23% on the number it posted in 2021. Profit before tax was £73m, up 28% from £57m.
But the firm warned there will be a 20% underlying fall in demand this year. Chief executive Stephen Harrison said the firm was “encouraged by falling mortgage rates and recent reports of improving reservation rates” and admitted how much sales would drop off would be known soon. “We wait to see how our customers’ spring new house selling season develops, as this will be a key determinant of demand in the current year.”
At the start of the year, the firm again increased the price of bricks but did not disclose the size of the latest rise. Last year, because of increased energy costs, the price of its bricks rose a cumulative 50% over the course of three price hikes.
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A new £95m brick plant at Desford, Leicestershire, is now operational with the first bricks due to roll off the production line shortly, while the £30m redevelopment of its Wilnecote factory has begun with recommissioning expected in the final quarter of the year.
The firm recorded on exceptional item in 2022, relating to the sale of surplus land for £2.5m, leading to an exceptional profit of £2.3m.
After more than a decade at the helm, Harrison will leave Forterra in the first half of this year, to be replaced by Neil Ash, a former divisional director at Belgian building materials firm Etex.
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