Half Year 2024 Forterra PLC Earnings Call Transcript
Key Points
- Forterra PLC (FRA:F0T) reported a solid H1 result in line with expectations despite challenging market conditions.
- The company achieved a significant improvement in cash flow performance, with an operating cash inflow of GBP13.3 million compared to an outflow of GBP16.3 million in the prior period.
- Forterra PLC (FRA:F0T) closed the period with a better-than-expected net debt position, with net debt before leases of GBP101.2 million.
- The company is declaring an interim dividend based on a 40% payout ratio, with plans to return to a 55% payout ratio when market conditions improve.
- Forterra PLC (FRA:F0T) has made progress on strategic projects, including the completion of the Desford factory and ongoing work on the Wilnecote factory, positioning the company well for future market recovery.
- Group revenue for H1 dropped by 11.5% compared to the prior year, driven by a 9% decline in industry brick volumes.
- The competitive market conditions have restricted Forterra PLC (FRA:F0T)'s ability to pass on the announced 2024 price increase.
- Adjusted EBITDA for H1 fell by over 20%, reflecting reduced efficiency and lower production output.
- The company experienced a significant increase in borrowing costs due to higher debt levels and rising interest rates, resulting in a 50% fall in PBT.
- Forterra PLC (FRA:F0T) faced challenges in the Bespoke Products segment, with revenue down 13% and margins adversely impacted by volatility in installation costs.
Good morning, everybody, and welcome to our interim results presentation. First and foremost introductions, my name is Neil Ash. I'm the CEO of Forterra and I'm joined today by Ben Guyatt, our CFO.
Morning all.
In terms of agenda for today's session, I'm going to walk you through the results headlines, and then I'll turn it over to Ben, who will explain the detailed finances for H1. And then it's back to me for a review of the market, strategic and sustainability updates and then the outlook.
So our headline results for H1 saw group revenue at GBP162 million, which represents a market driven drop of 11.5% versus the prior year. H1 industry brick volumes have dropped by around 9% and our own brick volumes are in line with this. Despite the softer than expected market. Our focus on excellence
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