DAVY VIEW

A return to revenue growth and a reiteration of full year expectations has been a recent theme in UK building product trading statements. In this regard, Forterra’s update is no different; however, if anything, its bounce in revenues in the first four months of the year (up 22%) is greater than expected. As we have noted previously, there is a credible roadmap for a very significant uplift in the group’s profitability over the medium term. Early evidence that this journey is underway is clearly supportive for the equity case even if some of this may already be reflected in a multiple of circa 19x the current year forecast EPS.