Forterra plc has said it is protected from short-term gas price volatility despite ongoing market turbulence linked to the conflict involving Iran.
In its full-year results statement, the brick manufacturer outlined the extent of its energy procurement strategy and the degree of forward purchasing already in place.
The company said: “We have around 80% of our gas usage secured for the remainder of 2026 with the month of March 100% covered, insulating us somewhat from the current price volatility caused by the situation in the Middle East.
“We also have a good level of layered coverage beyond this, with around 70% of our usage secured in 2027 and with coverage reducing through to 2030.”
Gas represents a significant cost component in the manufacture of clay bricks and other heavy building materials, with kiln firing requiring sustained high temperatures. Securing forward supply agreements is therefore an important strategy for manufacturers seeking to manage energy cost volatility.
Alongside the update on energy procurement, Forterra also revealed that attempts to increase brick selling prices last year were unsuccessful due to prevailing market conditions.
It said: “Our intention had been to increase selling prices to offset inflation. Unfortunately, challenging market conditions and competitor behaviours determined that these price increases did not hold in the market, as we needed to ensure our pricing remained competitive.”
The company reported turnover of £386m for the year to 31 December 2025, up from £344.3m the previous year. Pre-tax profit for the period reached £23.3m compared with £24.8m in the prior year.
Despite the current pressures facing the construction materials sector, chief executive Neil Ash said the longer-term outlook for the market remained positive.
He said: “Looking beyond 2026, market fundamentals remain attractive with a shortage of housing, a strong desire within Government to address this, and a constrained supply of essential building products.
“The Board remains confident that our recent investments in new production capacity leave the Group well placed to benefit from the market’s structural growth drivers and a sustained recovery when it occurs.”
