DAVY VIEW

Forterra’s trading update indicates that 2021 results will be in line with its expectations. The salient trend is that better revenues were offset by higher costs with margins squeezed. The group’s financial position is in a good place (net cash), and this has prompted the announcement of a £40m share buyback (circa 7% of the current market capitalisation). Cost inflation remains a headache, but recent material selling price increases are encouraging. This helps back up Forterra’s confidence for this year, with the scheduled commissioning of the Desford facility an important milestone.