Primary Recommendation

Forterra - Brick manufacturer benefiting from buoyant house builder order books

April 2021

Investing in shares may lose you all or some of your money. Past performance is no indication of future performance. Some of the shares recommended here may be small company shares, which can be relatively illiquid and hard to trade and this makes such shares more risky than other investments.

With the top three UK house builders, Barratt, Taylor Wimpey and Persimmon, noting that forward order books have grown by 11-24%, there’s been a positive knock-on effect “downstream” on UK brick manufacturers with the number two player in the UK market, Forterra, having just announced its third “beat” to expectations since last August.As a result, it remained profitable in 2020 despite the UK’s worst performance since the Great Frost and speaking to the company, I am beginning to think brokers’ forecasts for eps of 14.4p, 18.2p and 22.5p between FY’21-23, respectively, understate its prospects as we emerge from the pandemic. Tight supply could drive price risesWhile brick making might sound like a dowd ...

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