Brick giant to mothball plant as housing demand drops

Grant Prior 5 months ago

Forterra is cutting production as housing work stutters including the mothballing of its Howley Park brick factory.

The cost-cutting programme was confirmed in a trading update on the eve of Forterra opening its new £95m Desford brick factory.

The company said: “With the new factory becoming operational at a time of subdued demand, disciplined capacity management is key to our ongoing success and we are presently consulting on measures to temporarily reduce our production, including the mothballing of our Howley Park brick factory.

“These measures are expected to deliver an annualised fixed cost reduction of approximately £10m. Beyond this, we will continue to ensure our cost base, including Group overhead, is aligned to market conditions.”

The update revealed a 24% drop in revenue for the four-month period ending 30 April 2023 to £109m from £143m last time as demand slumped in the housing sector.

Forterra increased prices four times in the 12 months to January 2023 including a 16.5% hike last October.

Neil Ash, Chief Executive of Forterra plc said: “Trading conditions in the period have been challenging and we are therefore pleased to deliver a result in line with our expectations.

“Our expectations for the year are based upon an underlying fall in market demand of 20% relative to 2022. With the inventory reduction within our customer base still ongoing, the decline in demand we have seen in the period is greater than 20%.

“However, we do expect demand will improve as the year progresses, noting the improving conditions cited by the housebuilders over recent weeks.

“We have already taken proactive steps to manage our production capacity and cost base, as we seek to maximise the benefits of the new Desford factory and the industry leading efficiencies it will provide.

“We believe the Group is well placed to meet the short-term challenges we face and remain confident in the medium to long-term fundamentals of our markets.

“This confidence is underpinned by a longstanding shortage of housing supply, the strong cross-party political support for housebuilding and a long-term deficit of domestic brick production capacity.

“Subject to market conditions improving in line with our projections we continue to anticipate delivering a full year result in line with our expectations with the result weighted towards H2.”



Latest news

Sutton Council looking to replace Real LSE on major site

Cash-strapped contractor was awarded £38m job last October
10 mins ago

GMI directors join Artium Construction

Recently launched design and build specialist looks to expand in North of England
14 mins ago

RSK snaps up muckshifting and civils firm RJT Excavations

£30m turnover civils specialist employs around 125 staff
15 hours ago

Willmott Dixon replaces Buckingham on Swansea job

Firm will pick up the pieces to finish off largely complete £135m job
16 hours ago

M&E specialist Michael J Lonsdale goes under

£250m revenue London specialist placed into administration
2 days ago

Another part of Real group heading for administration

Real SW staff given bad news as first contract already novated to Rydon
1 day ago

HSE to prosecute Falcon after triple crane death

Court proceedings to start this month following tragedy in 2017
1 day ago

Retention records added to stricter payment reporting laws

Disputed value of invoices to be bolted into prompt payment reporting
23 hours ago

Esh Group counts on record orders after resilient year

Order book swells to £600m raising hopes for year ahead
1 day ago

Costain transportation MD exits

Sue Kershaw resigns after nearly four years heading highways, rail and aviation division
1 day ago

Materials giant Heidelberg drops Hanson brand

Hanson UK renamed Heidelberg Materials

Clegg Construction sinks £3m into the red

Clegg Group lifted by specialist food project arm after tough year in general building
2 days ago

£350m Birmingham triple tower scheme approved

Vast curving Ringway Centre to be demolished for 1,750 flats development
2 days ago

Eight face fight to renew £400m North West framework

Bidding starts for places on NWCH's £1m-£4m project framework
2 days ago

Midgard lands £245m Tottenham Hale towers

Three towers of up to 38 storeys complete north London regeneration scheme
2 days ago

Designs chosen for mini nuclear reactors

First contracts for next generation of nuclear power to be awarded next summer
2 days ago

Go-ahead for Wates £35m Hartlepool leisure centre job

Work on the Highlight waterfront centre to start in November
2 days ago

Buckingham Group supply chain hit for over £108m

Over 1,200 firms left in the lurch, while bond providers brace for £86m payout
5 days ago

Bidders day for £4bn-plus Palace of Westminster restoration

Tendering to start next July for main construction, integrator and design partners
5 days ago

Green light for 690-home Birmingham Smithfield scheme

Prosperity Group plans to start work in Autumn next year on major Smithfield scheme
5 days ago

Go-ahead for 289 homes next to Saltaire World Heritage site

Ambitious plan to demolish a vacant Bradford office complex for new residential quarter
5 days ago

Costain wins phase 2 of A40 Westway viaduct repairs

TfL re-signs Costain for Wood Lane to Marylebone Flyovers repairs
5 days ago

Regeneration specialist Muse gets new MD

North west chief Phil Mayall promoted to run whole Muse business
5 days ago

Building engineering services workers accept 7% pay rise

Two-year deal includes a 3% hourly rate rise from October 2024.
6 days ago

Inland Homes files for administration

Questions remain over house builder's last two years of accounts
7 days ago

Council orders developer to tear down tower blocks

Comer Homes told to demolish occupied towers in Woolwich after planning row
7 days ago

Bouygues UK restructure sees CEO exit

Contractor restructures as Rob Bradley retires
7 days ago

Fit-out firm BW Workplace returns to profit

London and south east fit-out firm sees revenue rebound 50% to £216m
6 days ago

Tarmac fined £1.275m after quarry death

26-year-old Luke Branston died during maintenance work at Leicestershire quarry
6 days ago

Galliford Try targets multi-rise affordable housing

Firm fills new role of director of affordable homes
6 days ago

Contractor services