Manufacturers of building products for the UK market
- Bricks
- Blocks
- Precast Concrete Products
- Roofing Products
- Paving Products
- Facades
- London Brick
- Ecostock Brick
- Butterley Brick
- Cradley Special Brick
- Red Bank
- Thermalite
- Conbloc
- Bison Precast
- Formpave
- 17 Manufacturing Sites
- 600 Building Products
- 1,800 Employees
- Main income is from brick manufacturing
- 9 brick manufacturing factories
- All based next to clay quarry resource
- 50 years production of mineral resources
- UK does not make enough bricks to satisfy demand. Shortfall is approximately 40% although this varies annually.
- Forterra will have access to home market through new factory replacing some imports
- New Desford factory costing £95m is now operational. Boasts best efficiency of any competitor in Europe
- Old Desford capacity = 60m bricks pa. New factory 180m pa.
- CO2 25% less than old factory
- Increases overall Forterra production by 22%
- Wilnecote factory upgrade of £27m will produce architecturally specified bricks. Margins are favourable for such products
- Accrington factory improvements of £12m will allow 480m brick slips to be made at source pa. Grenfell fire has pushed specifiers away from timber cladding. Brick slips are an obvious replacement.
- Share buy backs 40m
- Dividends 24.2m
- Desford & Wilnecote 33.6m
- Investment in strategic reserves at Swillington. New factory planned
Strategy is easily articulated as three pillars designed to provide sustained earnings and cash flow growth through:
- expansion of capacity, enhanced efficiency, and sustainability
- range expansion
- new product innovation
This isn't a huge business. It seems well placed to grow and they claim to have a seriously strong moat. They have existing sites and estimate entry into their sector for competitors would take ten years due to planning and other requirements. By increasing their efficiency, improving sustainability and capitalising on recent opportunities created by the likes of Grenfell & Brexit they could be worth a further look.
AiY(D)