Forterra PLC on Tuesday reported a slashed dividend as annual profit slumped amid increased mortgage rates that followed higher interest rates in the UK.

The Northampton, England-based building product manufacturer said pretax profit dived 72% to £16.1 million in 2023 from £72.9 million in 2022.

Revenue fell 24% to £346.4 million to £455.5 million, and 0.4% higher than £345 million it had anticipated back in January.

‘We take some encouragement from recent trading updates from our housebuilding customers reporting greater levels of customer activity in recent months with a downward trend in mortgage interest rates through 2024 expected to improve the affordability of new homes, hopefully increasing demand for our products,’ the company said.

Chief Executive Officer Neil Ash said: ‘Demand for new housing in the UK fell substantially, driven by increasing interest rates adversely impacting affordability and therefore demand for new homes.’

Forterra recommended a final dividend of 2.0 pence per share, slashed from 10.1p and bringing the total dividend to 4.4p, down 70% from 14.7p paid for 2022.

Calling its 2023 performance ‘resilient’ amid the ongoing affordability challenges in the UK housing market, CEO Ash said: ‘With the long-term under-supply of housing in the UK continuing to worsen, and with our previous capacity constraints now addressed, the board remains confident in the group’s ability to benefit as our key markets recover.’

Forterra shares were 0.2% higher at 175.80 pence each on Tuesday afternoon in London.

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