Forterra announce 2020 half-year results
Board very confident of long-term recovery following unprecedented challenges in first half of 2020
FORTERRA plc, one of the leading UK producers of manufactured masonry products, have announced their half-year results for the six months ended 30 June 2020, which were heavily impacted by the COVID-19 pandemic and the associated lockdown.
Whilst revenue in April 2020 fell to 14% of the 2019 comparative, trading recovered through May with revenue for the month being 38% of the 2019 figure, and continued to gain pace throughout June, recovering to 74% of the prior year.
For the first six months, total revenue was £122.4 million, a decrease of 37% against the comparative period for 2019 (H1 2019: £193.6 million), whilst EBITDA before exceptional items decreased by £34.3 million to £8.2 million. Loss before tax for the period, before exceptional items, of £2.3 million represented a fall of £35.0 million against the comparative period (H1 2019: profit of £32.7 million).
Forterra say the recovery of their key markets and revenues seen in May and June continued through July and August. Revenues in July were 89% of 2019 and 82% in August, with the brick and block segment exceeding 90% in both months highlighting the continued encouraging recovery.
Construction of the company’s new Desford brick manufacturing facility in Leicestershire continued through the lockdown, although some delays mean the facility is now likely to be completed approximately six months later than originally anticipated with commissioning expected to commence towards the end of 2022.
Commenting on the results, chief executive officer Stephen Harrison (pictured) said: ‘The Group faced unprecedented challenges during the first half and I would like to thank all our employees and other stakeholders for their collaborative approach in overcoming the challenges we faced through this period.
‘Inevitably, our results were heavily impacted by COVID-19 and the associated lockdown. We took swift action to ensure the well-being of our employees as demand for our products fell dramatically and we ceased production at the majority of our facilities.
‘We also acted decisively to manage our cost base and ensure sales and production remained balanced. We have now substantially completed a range of restructuring actions and production has now resumed at all our factories.
‘I am pleased to report that trading since emerging from lockdown has exceeded management’s expectations and we remain very confident in the long-term recovery of our markets.
‘Subject to a continuation of current trading conditions and there being no further COVID-19-driven disruption, the board expects full-year EBITDA, stated before exceptional items, to be in the range of £27 million to £32 million.
‘The board will continue to monitor our key markets and the economy more generally, and believes that the Group’s strong balance sheet, reinforced by the recent equity placing and refinancing, provides both the resilience and agility required in these unprecedented times.’