Forterra PLC (LON:FORT) shares plunged on Tuesday after the precast concrete and brick manufacturer issued a profit warning due to delays in large contracts and overall market uncertainty.
The company said it expects full-year profit before tax to be “modestly below” last year’s £64mln, which was a 9% increase compared to 2017, although it remains “confident in its strategy” to benefit in the medium term.
READ: Forterra downgraded to 'neutral' by Citigroup after good run over the last year
In the period since 1 July, the new build housing market remained in line with forecasts but distributors and non-residential applications slowed down, Forterra said.
Brick and block sales decreased, following market trends, while delays in “a number” of large contracts were said to have hit the anticipated level of margin growth.
Broker Peel Hunt now expects profit before tax to be £62mln and £65mln in 2019 and 2020 respectively, although retained its ‘add’ recommendation.
“Forterra has experienced weaker trading through the third quarter and lead indicators aren’t pointing to a near-term recovery,” the broker said in a note.
“Clarity on Brexit and a cut to stamp duty in the Budget would provide a boost to construction activity, but uncertainty is clouding the near-term outlook.”
Shares fell by 7% to 276.2p on Tuesday morning.