Forterra (LON:FORT) reported what CEO Neil Ash called a “strong set of results” for its 2025 financial year despite a challenging construction products market that weakened in the second half. Management highlighted double-digit revenue growth, improved profitability, and a significantly strengthened balance sheet, alongside strategic progress on major manufacturing investments and new product initiatives.
Financial performance and cash generation
CFO Ben Guyatt said the group delivered progression across all key metrics, outperforming the wider market helped by exposure to new build housing and a brick footprint weighted toward extruded bricks. Revenue rose 12.1% to GBP 386 million, driven primarily by volume growth. Adjusted EBITDA increased 18.5% to GBP 61.6 million, with the EBITDA margin improving by 90 basis points.
Net debt before leases declined to GBP 55.7 million from GBP 85 million the prior year, with leverage “fractionally above 1x adjusted EBITDA” on a banking covenant basis, down from 1.9x a year earlier. Borrowings stood at GBP 61.8 million, leaving facility headroom of GBP 85 million against the company’s GBP 170 million revolving credit facility (RCF). Forterra extended its committed banking facilities to the end of June 2028 after exercising a 17-month extension option.
Dividend increase and share buyback
Management said the 2025 dividend will more than double from the prior year. The company recommended a final dividend of GBP 0.043 per share, taking the full-year dividend to GBP 0.062 per share, representing an approximately 50% payout ratio.
With the group’s GBP 140 million investment program “largely complete,” Ash announced a GBP 20 million share buyback, expected to commence in the coming weeks and be spread “relatively evenly” over the remainder of 2026. Guyatt said that after the buyback, Forterra expects closing 2026 net debt before leases to be at a similar level to the 2025 figure.
Ash and Guyatt described the buyback as the start of an ongoing program, but said future scale would depend on factors such as leverage, market conditions, and any M&A activity. The company reiterated its intention to retain leverage below 1.5x adjusted EBITDA.
Operating trends: bricks, blocks, and bespoke products
In the bricks and blocks segment, revenue growth of 11.2% was driven by improved brick dispatches. Guyatt cited Department for Business and Trade data showing domestic brick dispatches increased 6% year-on-year, which management said demonstrated outperformance and a return of market share to historical levels. Demand was stronger in the first half—management noted domestic brick market demand increased 15% in H1—but softened in the second half.
Pricing was described as “broadly stable,” though Forterra’s attempted price increases at the start of the year “failed to hold.” For 2026, the company has announced “essential price increases,” and Guyatt said management is more confident these will be landed to cover cost inflation.
Operationally, Forterra said strong demand for extruded bricks enabled it to run both kilns concurrently at its Desford facility for the first time, creating meaningful efficiency benefits and the potential to double output with roughly 25 additional heads. However, weaker demand for soft mud bricks and the RMI-focused London Brick range has required careful management of production and inventories, including modest production reductions in early 2026. Segment adjusted EBITDA increased 16% with a margin of 18.5%, up 80 basis points.
Forterra also exited two non-core operations. The group exited the Formpave block paving business, which had been described as subscale and requiring significant investment; it generated about GBP 6 million in 2024 revenue with break-even performance. In addition, Forterra closed its Bison Bespoke precast operation. Guyatt said that in 2026 this should reduce segment revenues by around GBP 10 million with little profitability impact, thereby improving margins. Following the closure, the “Bespoke Products” segment comprises the Bison Flooring business, supplying beam-and-block ground floors and hollow core flooring systems.
Strategic projects and “beyond the core” initiatives
Ash highlighted continuing recommissioning of the Wilnecote brick factory and first sales of the extruded brick slip system from Accrington as milestones. He said Wilnecote, a GBP 30 million investment, is intended to broaden the company’s range of specification bricks, where management sees opportunities for market share gains, including potential substitution for imports used on architecturally specified projects.
Forterra also discussed the Omnia brick slip system as a move “beyond product supply and into façade solutions.” Management estimated the brick rainscreen cladding market at around GBP 150 million in 2025 and said penetration is increasing by roughly 5% per year, driven by multi-residential, student accommodation, and commercial buildings adopting modern methods of construction. The company said Omnia has external certification in place for both its slips and rail system.
Accrington provides the capability to produce about 50 million slips per year. Forterra is also investing GBP 1.5 million in an in-house brick cutting facility at Measham to produce slips from traditional bricks where a soft mud aesthetic is required.
On sustainability and innovation, management cited work on a thinner “65 mil” brick system, optimizing brick perforations to remove clay, optimized beam shapes in concrete flooring to reduce concrete and steel reinforcement, and the use of internally sourced calcined clay in some concrete products. Forterra said it has built an understanding of hydrogen use in brick firing and is working with carbon capture providers.
Market conditions and 2026 outlook
Management said market conditions remain challenging. Ash noted housing registrations increased in 2025, particularly in the first half, but the market lost momentum later in the year amid uncertainty and weaker consumer confidence. The RMI market was described as subdued, impacting London Brick, which management said is closely correlated with weaker extension planning activity and the need for consumers to fund projects.
Forterra said it expects 2026 performance to be “slightly ahead” of 2025, although a wet start to the year made it difficult to gauge demand. At this stage, management expects demand to be broadly in line with 2025, weighted toward the second half. Price increases are expected to recover cost inflation and support margins.
The company reiterated a mid-term target of GBP 120 million of EBITDA. Ash referenced 2022 as a comparison point, when the U.K. built about 208,000 homes and Forterra delivered GBP 88 million of EBITDA, adding that the strategic projects at Desford and Wilnecote could contribute a further GBP 32 million of EBITDA at historical 2022 build rates, with additional upside expected from operational and commercial excellence programs and “beyond the core” initiatives.
About Forterra (LON:FORT)
Forterra is a leading UK manufacturer of essential clay and concrete building products, with a unique combination of strong market positions in clay bricks, concrete blocks and precast concrete flooring. Our heritage dates back many decades and the durability, longevity and inherent sustainability of our products is evident in the construction of buildings that last for generations; wherever you are in Britain, you won’t be far from a building with a Forterra product within its fabric.
Our clay brick business combines our extensive secure mineral reserves with modern and efficient high-volume manufacturing processes to produce large quantities of extruded and soft mud bricks, primarily for the new build housing market.
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