Forterra PLC on Wednesday said profit rose nearly 50% during 2024, but reduced its dividend due to strain on its balance sheet in ‘challenging’ market conditions.
The Northampton, England-based clay and concrete product manufacturer said pretax profit during 2024 was £24.8 million, growing 45% from £17.1 million in 2023.
Revenue, on the other hand, fell 0.6% to £344.3 million from £346.4 million, and cost of sales decreased 1.8% to £241.3 million from £245.7 million.
Distribution costs reduced 5.1% to £46.1 million from £48.6 million, and other operating income multiplied to £6.4 million from £500,000.
Forterra declared a total dividend of 3.0 pence per share, down 32% from 4.4p as the result of a board proposal to temporarily reduce the level of dividend distribution.
‘The board intends to keep its dividend policy under review and will look to return the level of distribution to the previous 55% [of adjusted earnings] as soon as market conditions and the balance sheet permit’, said Forterra.
Shares in Forterra were up 4.0% at 165.40p in London on Wednesday afternoon. The stock remains down 4.5% over the past year.
‘2024 saw the continuation of the challenging market conditions we have witnessed over the last two years, though the second half saw an improving position,’ said Chief Executive Officer Neil Ash.
‘Our focus has been on the areas we can control and delivered a resilient performance by successfully aligning our production to demand and returning the group to a position of strong cash generation. We also continued to make good progress with our £140m strategic capital investment programme at Desford, Wilnecote and Accrington, which is now nearing completion.’
Looking ahead, Forterra expects to deliver annual earnings before interest, tax, depreciation and amortisation of around £120 million in the medium term. Its 2024 Ebitda improved 24% to £54.7 million from £44.1 million.
CEO Ash continued: ‘Trading in the first two months of 2025 has continued the positive trends seen in the final quarter of 2024, with our brick despatches 17% ahead of the prior year. We are currently concluding our customer pricing discussions and expect to deliver necessary price increases to offset cost inflation. We continue to take encouragement from the government’s ambition to materially increase housebuilding but remain wary of the challenges in delivering this.
‘During 2025, we anticipate some recovery in our markets, whilst remaining mindful of the wider macroeconomic conditions. Following our significant strategic investment in increased manufacturing capacity, the group remains well-placed as its key markets recover.’
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