Brick maker Forterra lays plans to follow rival onto the London market with £450m float
Forterra, the second-largest brick maker in the UK, is laying the foundations for a £450m float on the London Stock Market, looking to build on government plans for an increase in house building.
Forterra, previously Hanson’s UK building products division, will list on the London Stock Exchange next month with a free float of at least 25 per cent.
The announcement of the initial public offering plans follow the £770m flotation of Forterra's rival Ibstock in October last year.
Chief executive Stephen Harrison said the London brick maker is looking to increase its production capabilities with the floatation.
Harrison said:
The fundamentals of our industry are attractive and with our efficient manufacturing base, strong positions across all product categories, long-standing customer relationships, and significant scope for future capacity expansion. Listing as an independent business is the next step in realising the significant potential that we see for Forterra and delivering on our plans for sustainable and profitable growth.
The company plans to capitalise on the latest push from the government to increase housebuilding, with the firm estimating that the UK residential new build and residential repairs, maintenance and improvement markets account for approximately 95 per cent of 2015 group revenue, with the remaining five per cent of revenue attributed to the UK commercial construction market.
Last year revenue at the company rose by eight per cent to £290m; while earnings before interest, taxes, depreciation and amortisation increased 29 per cent to £71m.
The company currently runs 17 factories and 12 quarries and is the sole producer of fletton bricks, which are used in about a quarter of all British houses and sold under the London Brick brand.
Credit Suisse, Deutsche Bank and Citigroup are managing the share sale.
The group has been owned by US private equity firm Lone Star Funds since it was sold by German company Heidelberg Cement in March 2015 for around $1.4bn. Heidelberg acquired Hanson in 2007.