Having put its prices up at the start of the year, Forterra’s was down only 18% in the six months to 30th June, to £183.2m, but pre-tax profit was down by 59% to £18.1m.
Forterra says that there are signs of improvement in the market, but not much.
"As we enter the second half, the outlook continues to remain uncertain due to high inflation and rising interest rates,” said new chief executive Neil Ash, who joined from Etex in April. “These factors are likely to continue weighing on demand for new housing and therefore our products. So, whilst we presently see tentative signs of improving trading, we are forecasting only a modest improvement in demand in H2.”
He added: “The outlook for 2024 is particularly unclear although beyond prevailing market conditions, we are optimistic the group's results should benefit from an end to customer inventory reduction; the efficiency benefits offered by the new Desford brick factory; the recommissioning of the Wilnecote brick factory and the efficiency benefits and range expansion it will offer; along with stabilising energy costs with approximately 70% of 2024 requirements secured; our close control of our cost base and the opportunity to substitute imported products.
“Notwithstanding the market weakness in the short-term, looking further ahead, the Board remains confident that the group remains well positioned to benefit from attractive market fundamentals of a shortage of UK housing supply, a shortfall of domestic brick production capacity and cross-party political support for increasing housing supply.”
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