British brickmaker Forterra has announced that staff will be consulted on redundancies as it plans to cut £13m in costs
Two months after the decision to mothball its Howley Park factory, Forterra’s struggles have continued, with redundancies anounced at the brickmakers.
On the eve of it’s 60th year, Forterra faces falling demand from housebuilders amongst a disappointing decrease in demand for bricks.
Recent government figures showed a 31.7% decrease in brick deliveries in April 2023, compared to April 2022.
Forterra commented in its trading update for the half year to the end of June that “demand for our products for the rest of the year remains subject to significant uncertainty with rising interest rates widely expected to adversely impact the demand for new homes for the foreseeable future”.
The statement did not say how many staff would be affected by the redundancies
Forterra’s statement on the redundancies consultation said that it had been expecting a slow start to 2020 with a “meaningful recovery” strengthening into the second half of the year.
However, recent increases in interest rates and the “bleak economic outlook” meant it was “now assuming only a modest improvement in trading conditions, and therefore expect to deliver full year EBITDA with a more balanced H1/H2 split”.
It added that greater levels of borrowing, plus inventory build-up and rising interest rates, were also expected to “drive an increase in our financing costs”.
The next few months for Forterra will be crucial
Forterra said the job losses would follow a restructuring of its commercial and support operations “aligning them to anticipated demand, which we expect to save approximately £3m annually.”
The firm will publish its half year result later this month and is expecting to report revenue down 18% to £183m, with a pre-tax profit of £18m compared to £37.3m last time.
