Profits and revenues crumble at brickmaker
Northamptonshire brickmaker Forterra has posted downbeat annual results this morning (March 26) amid falling sales.
Revenue at the firm fell by 24% to £346.4m last year, while profit before tax was down by almost 56% to £31.1m during 2023.
Neil Ash, chief executive officer, said: “Forterra produced a resilient performance in 2023, in what turned out to be a very challenging year for our industry. Demand for new housing in the UK fell substantially, driven by increasing interest rates adversely impacting affordability and therefore demand for new homes.
“In light of this lower demand management took decisive action on our cost base. Assuming 2024 demand remains consistent with 2023, our management actions will ensure output is broadly matched with sales, thus limiting future inventory build.
“Importantly, however, these temporary reductions will not impact our ability to respond quickly when our markets recover. Indeed, one bright spot during 2023 was the commissioning of the new Desford brick factory, which gradually ramped up production throughout the year, and which will provide a significant capacity uplift in improved markets.
“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.”
The company mothballed two of its plants and made job cuts in 2023, saying the actions would save it over £20m.
Forterra said that a £95m investment in New Desford, the largest brick factory in Europe, is largely complete with the factory operational.
Meanwhile, its £30m redeveloped Wilnecote factory, designed to service the commercial and specification market, is expected to be back online in the second half of this year.
