LSE:FORT

Stock Analysis Report

Executive Summary

Forterra plc manufactures and sells masonry products in the United Kingdom.

Rewards

Trading at 44.4% below its fair value

Earnings are forecast to grow 5.7% per year

Earnings have grown 30.5% per year over the past 5 years

Risk Analysis

Has a high level of debt

Unstable dividend track record



Snowflake Analysis

Excellent balance sheet and good value.


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Share Price & News

How has Forterra's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: FORT has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

7.1%

FORT

3.6%

GB Basic Materials

0.5%

GB Market


1 Year Return

35.3%

FORT

20.5%

GB Basic Materials

6.6%

GB Market

Return vs Industry: FORT exceeded the UK Basic Materials industry which returned 18.8% over the past year.

Return vs Market: FORT exceeded the UK Market which returned 6.1% over the past year.


Shareholder returns

FORTIndustryMarket
7 Day7.1%3.6%0.5%
30 Day4.3%1.5%-2.4%
90 Day30.9%15.3%4.0%
1 Year40.8%35.3%24.5%20.5%12.2%6.6%
3 Year102.8%83.9%69.0%56.7%17.8%2.9%
5 Yearn/a110.9%93.9%35.7%4.6%

Price Volatility Vs. Market

How volatile is Forterra's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Forterra undervalued compared to its fair value and its price relative to the market?

44.4%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: FORT (£3.6) is trading below our estimate of fair value (£6.47)

Significantly Below Fair Value: FORT is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: FORT is good value based on its PE Ratio (13.3x) compared to the Basic Materials industry average (17.6x).

PE vs Market: FORT is good value based on its PE Ratio (13.3x) compared to the UK market (18.5x).


Price to Earnings Growth Ratio

PEG Ratio: FORT is poor value based on its PEG Ratio (2.3x)


Price to Book Ratio

PB vs Industry: FORT is overvalued based on its PB Ratio (5.1x) compared to the GB Basic Materials industry average (2x).


Next Steps

Future Growth

How is Forterra forecast to perform in the next 1 to 3 years based on estimates from 10 analysts?

5.7%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: FORT's forecast earnings growth (5.7% per year) is above the savings rate (0.5%).

Earnings vs Market: FORT's earnings (5.7% per year) are forecast to grow slower than the UK market (12.2% per year).

High Growth Earnings: FORT's earnings are forecast to grow, but not significantly.

Revenue vs Market: FORT's revenue (3.3% per year) is forecast to grow slower than the UK market (3.5% per year).

High Growth Revenue: FORT's revenue (3.3% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: FORT's Return on Equity is forecast to be high in 3 years time (25%)


Next Steps

Past Performance

How has Forterra performed over the past 5 years?

30.5%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: FORT has high quality earnings.

Growing Profit Margin: FORT's current net profit margins (14.1%) are higher than last year (13.9%).


Past Earnings Growth Analysis

Earnings Trend: FORT's earnings have grown significantly by 30.5% per year over the past 5 years.

Accelerating Growth: FORT's earnings growth over the past year (11%) is below its 5-year average (30.5% per year).

Earnings vs Industry: FORT earnings growth over the past year (11%) underperformed the Basic Materials industry 33.2%.


Return on Equity

High ROE: FORT's Return on Equity (38.4%) is considered high.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Forterra's financial position?


Financial Position Analysis

Short Term Liabilities: FORT's short term assets (£129.4M) exceed its short term liabilities (£108.1M).

Long Term Liabilities: FORT's short term assets (£129.4M) exceed its long term liabilities (£86.5M).


Debt to Equity History and Analysis

Debt Level: FORT's debt to equity ratio (47.8%) is considered high.

Reducing Debt: FORT had negative shareholder equity 5 years ago, but is now positive and has therefore improved.

Debt Coverage: FORT's debt is well covered by operating cash flow (108.1%).

Interest Coverage: FORT's interest payments on its debt are well covered by EBIT (30.6x coverage).


Balance Sheet

Inventory Level: FORT has a high level of physical assets or inventory.

Debt Coverage by Assets: FORT's debt is covered by short term assets (assets are 1.9x debt).


Next Steps

Dividend

What is Forterra's current dividend yield, its reliability and sustainability?

2.92%

Current Dividend Yield


Dividend Yield vs Market

company2.9%marketbottom25%1.8%markettop25%5.1%industryaverage2.5%forecastin3Years3.5%

Current dividend yield vs market & industry

Notable Dividend: FORT's dividend (2.92%) is higher than the bottom 25% of dividend payers in the UK market (1.83%).

High Dividend: FORT's dividend (2.92%) is low compared to the top 25% of dividend payers in the UK market (5.1%).


Stability and Growth of Payments

Stable Dividend: Whilst dividend payments have been stable, FORT has been paying a dividend for less than 10 years.

Growing Dividend: FORT's dividend payments have increased, but the company has only paid a dividend for 3 years.


Current Payout to Shareholders

Dividend Coverage: With its reasonably low payout ratio (41.3%), FORT's dividend payments are well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: FORT's dividends in 3 years are forecast to be well covered by earnings (45.5% payout ratio).


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

1.1yrs

Average management tenure


CEO

Stephen Harrison (51yo)

3.8yrs

Tenure

UK£859,644

Compensation

Mr. Stephen Harrison has been the Chief Executive Officer at Forterra plc since April 26, 2016 has been its Executive Director since January 21, 2016. Mr. Harrison served as the Managing Director of Hanson ...


CEO Compensation Analysis

Compensation vs Market: Stephen's total compensation ($USD1.12M) is about average for companies of similar size in the UK market ($USD1.18M).

Compensation vs Earnings: Stephen's compensation has been consistent with company performance over the past year.


Leadership Team

NamePositionTenureCompensationOwnership
Stephen Harrison
CEO & Executive Director3.8yrsUK£859.64k0.067% £484.3k
Benjamin Guyatt
CFO & Director0yrsno data0.015% £107.9k
George Stewart
Operations Director0yrsno data0.020% £142.9k
Edward Haslam
Human Resources Director2.9yrsno datano data
Peter Varnsverry
Managing Director of Bison Precast1.1yrsno datano data
Ashley Thompson
Company Secretary0.08yrsno datano data

1.1yrs

Average Tenure

51yo

Average Age

Experienced Management: FORT's management team is not considered experienced ( 1.1 years average tenure), which suggests a new team.


Board Members

NamePositionTenureCompensationOwnership
Stephen Harrison
CEO & Executive Director3.8yrsUK£859.64k0.067% £484.3k
Benjamin Guyatt
CFO & Director0yrsno data0.015% £107.9k
Justin Atkinson
Non-Executive Chairman0.8yrsUK£68.20k0.013% £90.0k
Martin Sutherland
Independent Non-Executive Director2.8yrsUK£51.20k0.0038% £27.0k
Katherine Christina Mary Ker
Senior Independent Non-Executive Director0.8yrsUK£58.20k0.00050% £3.6k
Divya Seshamani
Independent Non-Executive Director3.8yrsUK£55.20k0.0030% £21.6k
James Niblett
Independent Non-Executive Director1yrsno data0.0033% £23.7k

1.9yrs

Average Tenure

51yo

Average Age

Experienced Board: FORT's board of directors are not considered experienced ( 1.9 years average tenure), which suggests a new board.


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: FORT insiders have only sold shares in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Top Shareholders

Company Information

Forterra plc's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Forterra plc
  • Ticker: FORT
  • Exchange: LSE
  • Founded: 2016
  • Industry: Construction Materials
  • Sector: Materials
  • Market Cap: UK£717.570m
  • Shares outstanding: 199.32m
  • Website: https://forterraplc.co.uk

Number of Employees


Location

  • Forterra plc
  • 5 Grange Park Court
  • Roman Way
  • Northampton
  • Northamptonshire
  • NN4 5EA
  • United Kingdom

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
FORTLSE (London Stock Exchange)YesOrdinary SharesGBGBPApr 2016
FORTLBATS-CHIXE (BATS 'Chi-X Europe')YesOrdinary SharesGBGBPApr 2016
F0TDB (Deutsche Boerse AG)YesOrdinary SharesDEEURApr 2016
FTTR.FOTCPK (Pink Sheets LLC)YesOrdinary SharesUSUSDApr 2016

Biography

Forterra plc manufactures and sells masonry products in the United Kingdom. It operates through three segments: Bricks, Blocks, and Bespoke Products. The company offers bricks; aircrete and aggregate blocks; and bespoke products comprising precast concrete flooring, concrete block paving, and chimney and roofing components, as well as other building products under the London Brick, Butterley Brick, Ecostock, Cradley, Thermalite, Conbloc, Bison Precast, Jetfloor, Red Bank, and Formpave brand names. It serves builders’ merchants, residential homebuilders, specialized brick merchants, contractors, and subcontractors. The company was incorporated in 2016 and is headquartered in Northampton, the United Kingdom. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/02/17 22:19
End of Day Share Price2020/02/17 00:00
Earnings2019/06/30
Annual Earnings2018/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.