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Fri October 18 2019

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Heavy materials suppliers report solid trading

22 Nov 17 Separate trading updates from Forterra and Breedon indicate steady progress in the heavy building materials sector.

Forterra bricks
Forterra bricks

Both Forterra and Breedon say that, thanks to solid demand from house-builders, their business plans are all on course and their financial expectations for the year remain unchanged.

Forterra, or what used to be called Hanson Building Products, says that for the 10 months to October 2017 it has seen double digit growth of brick and aggregate block volumes compared with the same period last year

Overall group revenue for the 10-month period was 12% ahead of last year after excluding the Bison acquisition.

Forterra completed the acquisition of the trade and certain assets of Bison Manufacturing in September 2017. The integration of the business is progressing to plan and Forterra’s precast concrete business has been rebranded as Bison Precast, recognising the strength of the Bison brand.

Forterra has also increased its production capacity. In Lancashire, the Claughton brick facility has had its capacity increased to more than five million bricks a year (c11% of the existing plant capacity) and a kiln at the nearby Accrington facility has been relit.  Full production at both kilns is expected during 2018.

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Despite paying out £20m for Bison and £13.8m to shareholders in dividends, net debt has still been reduced, from £92.3m at the start of the year to £87.2m at 31st October 2017.

Breedon also reports a solid 10 months trading. Group sales volumes of aggregates increased by 47%, asphalt by 2% and concrete by 99%. Total group revenue for the 10-month period increased by 56% to approximately £561m. 

However, the former Hope Construction Materials business contributed to only three months of the 2016 comparators. Like-for-like numbers were not supplied.

Breedon said: “We continue to invest in our business at record levels, which is yielding appreciable benefits in terms of enhanced performance and improved productivity.  This organic improvement gives us confidence that we will make further progress in 2018.”

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