Forterra says early-2017 trading good, building on momentum of 2016

Forterra, the UK producer of manufactured masonry products, said trading in the four months to the end of April has been good, building on the momentum seen at the end of 2016.

The company said it continued to generate good levels of operating cash flow, with an expected increase in trade receivables during the busy spring selling season. Net debt at the end of April was about £89m, compared with £92.3m at the start of the year.

"The board continues to expect another year of progress in 2017 with, as previously stated, a more balanced outcome for the current year between the first and second halves than in 2016, and its expectations for the full year are unchanged," it said.

Forterra said the new-build residential market continued to see robust levels of activity and brick sales volumes for the four months were well ahead of the same period in 2016, recognising that the comparative was softer due to supply chain destocking.

As reported previously, price increases for the year were agreed with most customers in order to cover the increases in the cost base. Overall Group revenue for the four months was 6% ahead of the prior year.

"The project to replace the dryers at the Claughton brick facility in Lancashire is well advanced and on schedule to enable the kiln to be re-lit during the summer," it said.

Once completed, the project would increase production efficiency and add capacity of 5m bricks a year.

"The project to increase the gas supply at the Desford brick facility in Leicestershire is also progressing well, and the installation of new kiln burners will be carried out later in the year," said the company.

"Trading in the period has been good, building on the momentum seen towards the end of 2016."

At 10:21 BST, shares in Forterra were up 1.54% to 264p each.