Building products manufacturer, Forterra has revealed plans to cut around 225 jobs and mothball its Bison hollowcore flooring plant in Derbyshire as part of restructuring proposals
In line with the anticipated decline in medium-term demand, Forterra says it will “consult with employees” on proposals to “shift patterns and adjustments to the size and structure of support functions”.
The building products producer has gradually reopened its operations following shut down to reduce the spread of Covid-19.
The company said: “We are currently manufacturing at twelve of our eighteen facilities and are preparing to further increase production as demand requires.
“We anticipate recommencing production at most of our remaining facilities by the end of July and retain full flexibility to reopen facilities sooner should demand increase at a faster rate than expected.”
In the latest trading statement, the group revealed its revenue has declined by 39% over the last five months, with a year-on-year decline of 86% in April and 62% in May.
In order to combat this decline, Forterra revealed it would consolidate the manufacture of all precast concrete flooring products at our Hoveringham facility in Nottinghamshire. This plan would mean that its hollowcore flooring manufacturing facility at Swadlincote would be mothballed.
Forterra said: “These proposals will not affect our ability to service key customers or our specialist precast concrete facility at Swadlincote. These actions, if implemented, will regrettably lead to the loss of approximately 225 jobs, primarily from our concrete products facilities.”
The group has access to a £150m revolving credit facility which runs to July 2022, which is presently fully drawn. At 31 May, Forterra had cash reserves of £79m as well as access to an undrawn overdraft facility of £10m.
In addition, Forterra has been confirmed as eligible for the joint HM Treasury and Bank of England Covid Corporate Financing Facility (CCFF) with an issuer limit of £175m and is now able to access the liquidity available under this facility.
However, the company stated that the “board does not have any present intention to draw upon this facility, which provides the group with additional headroom if required.”
It concluded: “Despite the economic circumstances created by Covid-19, the board remains confident that the group is well positioned to take advantage of the attractive long-term market fundamentals in order to continue delivering sustainable shareholder value.”