DAVY VIEW

Forterra’s H1 adjusted EBITDA fell 10% year-on-year to £27m, although the decline was not as severe as feared (£24-25m). Actions on costs have protected margins and, encouragingly, this has allowed Forterra to indicate that it will deliver a full year result in line with consensus expectations. The stock, like others in the UK building products category, has fallen out of favour with a decline of over 25% year to date. Our sense is that as long as the trading environment remains challenging, with the resultant lack of conviction in earnings estimates, the Forterra share price is likely to remain in the doldrums.