Forterra PLC
- Market Cap (£m) 294.6
- Listing LSE
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Analysts
Company Descriptions
Forterra is the UK's second-biggest brick maker, with nine plants with an annual capacity of 690 million bricks pa, including Desford and Wilnecote. The Brick & Blocks division is also a major producer of concrete blocks, including the energy-efficient Themalite range. Its main ranges are economical 'mid-market' products aimed at volume housebuilders. It also offers the unique high-margin 'Fletton' bricks, which were used to build approximately a quarter of the current housing stock of England after WW2, and which are required by many planners for extension of those homes. The Bespoke Products division produces other specialist components used in housing and other sectors, including commercial and infrastructure. The former Hanson Building Products returned to the stock market in 2016.
Investment Summary
In our view, Forterra's main attractions include:
1. Brick is the overwhelming cladding product of choice for housebuilders.
2. A consolidated industry, dominated by three main players: Ibstock, Forterra and Austria's Wienerberger. There are fewer competitors than in past cycles and, we believe, a greater focus on returns rather than on market share.
3. Long-term growth prospects, led by the UK government's commitment to significantly boosting housebuilding. HS2 and other infrastructure projects could boost Bespoke Products.
4. Focus on efficiency and cash generation. Other than the Desford project, the company has channelled most of its investment into projects that increase either energy efficiency or fixed cost recovery, rather than increasing volumes. Since the IPO, until the unique challenges of Covid, the company has regularly exceeded cashflow expectations.
Recent Content
Company Management Team
Neil Ash
Chief Executive Officer
Neil has almost three decades’ experience in the building materials sector and an impressive track record of improving performance and delivering growth. Previously at Etex, the Belgian lightweight building materials manufacturer, he led £2.4b n revenue Building Performance division. During his time at Etex Neil oversaw major capex projects, significant acquisitions, and developed its sales approach which delivered strong top line growth.
His experience includes 15 years at Lafarge, where he undertook many roles, including the role of Vice President International Development and Sales and Commercial Director UK & Ireland of Lafarge Plasterboard.
Neil has extended executive education programs at INSEAD (France) and IMD (Switzerland).
Ben Guyatt
CFO
Prior to his appointment as CFO, Ben held the role of Director of Finance and Company Secretary having played a key role in the separation of the business from HeidelbergCement and the subsequent listing on the London Stock Exchange. Ben joined Hanson plc in 2006 and held a variety of senior finance and strategy roles within Hanson and HeidelbergCement. Previously Ben held financial management roles at insurance broker, Heath Lambert. Ben is a Chartered Accountant and holds a Bachelor of Arts degree with honours in Accounting and Finance from the University of the West of England.
