Overview
Forterra, the UK maker of building products, posted a 13.5% reduction in revenue for the first half, with sales coming in at £168.80 million. Adjusted EBITDA was down 9.7% at £27 million over the period. Management said the group has seen weaker trading across its product ranges and has taken a number of measures to protect margins and cash flow.
Drivers of the results
The company attributed the revenue decline to softer demand across several core categories. Brick despatches slipped modestly, while block product volumes fell by a larger margin. To relieve pressure from rising input costs, including those linked to the Middle East conflict, Forterra implemented low single-digit price increases for bricks and introduced surcharges that apply across its product portfolio.
Cost actions and balance-sheet moves
Forterra said it executed production reductions and carried out a reorganisation of management and support functions as part of its response to the trading backdrop. These changes are intended to deliver approximately £2 million of annual cost savings. The group also continued to run its previously announced £20 million share buyback programme through the half.
Outlook
Looking forward, Forterra indicated it expects second-half demand to be similar to that experienced in the first half. Management said that, if that assumption holds, full-year results would be consistent with consensus forecasts. At the same time, the company cautioned that predicting second-half demand is challenging given both domestic and wider geopolitical uncertainty.
Key points
- Revenue fell 13.5% to £168.80 million in the first half.
- Adjusted EBITDA decreased 9.7% to £27 million, while margins improved after exiting non-core businesses.
- Actions taken include price increases, surcharges, production cuts, a management and support function restructure targeting £2 million of annual savings, and continuation of a £20 million buyback.
Risks and uncertainties
- Demand risk - softer volumes across brick and block product lines could persist, affecting sales and utilisation in the building products sector.
- Geopolitical and cost pressure - costs linked to the Middle East conflict and other geopolitical developments may continue to pressure margins and operating costs.
- Forecasting difficulty - management explicitly warns that second-half demand is hard to predict amid domestic and global uncertainty, complicating outlook clarity for investors and industry participants.
Sectors affected
- Building materials and construction supply chain
- Residential and commercial construction activity that consumes bricks and blocks
Forterra's disclosure of measures to protect margins and the continuation of its share buyback reflect efforts to support shareholder value while navigating a softer demand environment. However, the company emphasised that near-term visibility remains limited due to geopolitical and domestic uncertainties.