Source - SMW
Forterra, a leading UK producer of manufactured masonry products, reports revenues of £146.0m for the six months to the end of June, 3.2% down on last time.

The group said strong brick volume growth into the housebuilding sector was more than offset by a decline in brick sales to builders' merchants and distributors as a result of their continued destocking of excess inventory.

The group says that while sales revenue was slightly behind management's expectations at the initial public offering as a result of the continued impact of the destocking, the EBITDA and margin performance for the first half were ahead of management's expectations due to tight control of costs and overheads.

Due to the group listing on the London Stock Exchange's Main Market through an IPO in April, coupled with a refinancing which significantly reduced indebtedness at the date of listing, a true comparison of performance with the prior periods is difficult. 

In order to make a comparison more meaningful, the EBITDA before exceptionals for 2015 has been shown on a pro-forma basis after adjusting for additional costs relating to being a stand-alone PLC. 

The finance charge for 2015 and the first half of 2016 has been calculated assuming that the debt structure at IPO was in place throughout the period, and the pro-forma profit before tax calculated on this basis. 

Similarly, the number of shares in issue in June 2016 has been used in calculating pro-forma earnings per share for comparative periods. Except where stated otherwise, commentary throughout these statements refers to the pro-forma results before exceptional items.

EBITDA before exceptionals of £39.5m for the six months ended 30 June 2016 was £0.6m lower than the comparable result in 2015, which is stated on a pro-forma basis after adjusting for additional costs related to being a stand-alone PLC. 

The reduction was due to lower sales volume, customer mix impact arising from higher brick volumes supplied to housebuilders and higher raw material costs, offset in part by lower energy costs and tight control of fixed costs and overheads. 

As a result, EBITDA margin of 27.1% was ahead of both the comparable 2015 first half margin (26.6%) and also the full year margin (23.3%).

The pro-forma profit before tax and exceptional items of £31.6m for first half of 2016 was down £0.6m compared to last year. The actual finance charge for both periods is higher due to the increased net debt and higher interest rate in place under the previous ownership structure.

Profit before tax on a statutory basis was £13.0m compared with £24.3m in the first half of 2015. Apart from the trading factors and higher finance charge described above, the other main change arose from the transaction costs relating to the IPO which are treated as exceptional.

At 9:40am: (LON:FORT) Forterra Plc Ord 1p Wi share price was +1.25p at 167.25p

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