Forterra Share Discussion Threads

[m_kerr] 28/9/2023 21:06

yes a bit odd, as house builders have seen decent share price growth over the past 6-9 months yet this has fallen steadily.

lots of doom and gloom in the share price, but the real money is made buying these sort of cyclicals when the future looks a bit uncertain. on a medium - long term view this generates plenty of cash. the new desford plant should enable them to benefit fully from a recovery, whenever that is.

[magnets] 20/9/2023 12:09

latest inflation data out: banks up 5%, housebuilders up 5%, forterra down?

[upsondowns] 20/9/2023 07:24

They are well over stocked and having to go on less shifts and mothballing a factory. So they are reacting to the market conditions. Just need the housing market to get better which might take a while yet so its just a matter of weathering the storm at the moment.

[m_kerr] 18/9/2023 20:09

damanko - yes remember reading that a while back. the poster was consistently saying how poor the bison pre cast acquisition was, and yes it's been a shockingly poor acquisition.

this is a fairly simple business to run, with limited competition, selling a product that doesnt change much over time, and therefore doesnt require top management to deliver decent returns. they just need to keep the balance sheet healthy so that they have a cushion in a downturn, and return cash to shareholders from the solid and profitable core business.

[damanko] 12/9/2023 19:41

Just looked at this thread for the first time in a very long time. It's still quite a quiet thread, no idea why, given the sector it resides in, and the pressure nationwide for new housing stock to be built, year on year - seemingly forever.

I've looked at my paper records in an old file: I sold half my holding in 11/2018 at £2.73, the rest a year later at £3.35. I don't feel clever about those transactions, just lucky. The money went into savings accounts, which now yield 5%+.

In the early days of this thread, one investor in particular, with some very good knowledge of Forterra, having (perhaps) worked as an employee or sub-contractor, was very sceptical regarding the management and forward strategy of the company. All this stuff is history, and can be read on the thread. I think as a result of what he wrote, and the information he shared, I eventually decided to sell.

I would be interested to hear if current investors believe the Forterra management & BOD are once again heading in the right direction, and the company might once again become a decent long term investment..?

Yes to the following: It suffered during the pandemic. It suffered from supply chain difficulties. It suffered from skilled labour shortages as a result of Brexit. And so on... And so did all companies, in similar sectors, yet look at the Forterra share price now, compared to, say - 4 or 5 years ago.

Regards to all, and the best of luck in your investments.

d.

[essentialinvestor] 06/9/2023 19:12

Yes you are correct. I doubt the earnings downgrade cycle is yet complete
and further trading disappointment may be on the way.

[edmundshaw] 01/9/2023 15:27

Those produicts have 30-40 year life expectancies anyway, so no-one is going to get sued for providing unreliable materials. Though it's pretty poor short term thinking building schools that will fall down in about 40 years...

[dope007] 01/9/2023 15:08

60s and 70s they are saying

[essentialinvestor] 01/9/2023 14:38

Who provided the product in the first place might also be worth asking
and is there a potential liability. I guess these are older buildings so
perhaps not an issue?.

[dope007] 01/9/2023 14:36

So all these falling down schools, hospitals, courts etc. Who is best placed to be providing the bricks and mortar for them?

[edmundshaw] 27/7/2023 07:32

Results and current share price seem to reflect current conditions. The former is natural, the latter a bit blinkered IMO. In the future conditions are far more likely to improve than deteriorate, and efficiencies are likely to improve markedly now the new factory is almost up and running, so I am happy to hold at this price.

[hamhamham1] 27/7/2023 06:11

H1 RESULTS

• Group revenues for the period of £183.2m, a decrease of 17.8% relative to the prior year (2022: £222.8m)

• Resilient H1 result broadly in line with management expectations delivered against a backdrop of challenging trading conditions

• Adjusted EBITDA of £31.1m (2022: £46.1m) and adjusted PBT of £19.2m (2022: £37.3m)

• Statutory EBITDA of £30.0m (2022: £53.0m) and statutory PBT of £18.1m (2022: £44.2m)

• Selling prices have remained firm despite competitive market conditions, with cost base also remaining stable

• Progressive signs of market improvement seen in May and June

• Strong and flexible balance sheet with a net debt before leases of £50.1m (2022 year end: £5.9m) which is below 1x adjusted EBITDA on a last 12 months (LTM) basis

• Interim 2023 dividend of 2.4 pence per share (2022: 4.6 pence) declared in line with established 55% pay-out ratio

[edmundshaw] 11/7/2023 09:32

Also added a bit at 150p. Actually, I sold a few yesterday to add to Ibstock as I thought Ibstock a bit cheaper relatively, so that worked out well!! :))

[buoycat] 11/7/2023 07:54

I'm a long term holder here, since I believe bricks have a long term future. Topped up today at 150p.

[creditcrunchies] 29/6/2023 12:11

Forterra I meant lol I don't know where Fortuna came from

[creditcrunchies] 29/6/2023 12:10

I watched this investment analysis of the brick trade in the UK the likes of Marshalls is more reliant on household discretionary spending but Fortuna is 50% repeat maintenance contracts, 30% housebuilders, 20% other. So revenues are not affected so much by cost of living crisis and housebuilders

[essentialinvestor] 26/6/2023 14:18

Appreciate the view.

[edmundshaw] 26/6/2023 14:15

EssentialInvestor, yes the dividend may be a bit lower for one year, but as long term investor I am more interested in the long term yield. Stocks will need replenishment at some point, and an awful lot of housebuilding still needs to be done. Efficiencies and high barriers to entry should protect the long term earnings potential IMO...

[essentialinvestor] 26/6/2023 12:56

Edmund, to expect the same payout for the next financial year may be optimitic,
I just don't see it, but no crystal ball etc.

[rcturner2] 26/6/2023 12:53

Looks like it hit 154p in 2020.

[essentialinvestor] 26/6/2023 12:49

Can anyone confirm what the 2020 share price low was, thanks.

[edmundshaw] 22/6/2023 14:03

Agreed this is a bargain. We are now pretty much at the price at the bottom of the 2020 pandemic fear slump, on a PER of under 7 and a yield of 6% or so. 6 weeks after a pretty positive trading statement, too.

Housing and brick needs are not going to go away, and while people may run stocks down a bit, and demand may drop, most of the effect will be felt by brick importers.

With high barriers to entry and only three large suppliers (I own the two UK listed ones), there is not much room for things to go wrong barring some kind of catastrophe that would melt everything else too...