Thursday 21 April 2016 12:11 pm

Brick maker Forterra floats on London Stock Exchange with £360m valuation as it seeks to capitalise on growing UK housing market

The UK's second largest brick maker is making its debut on the London Stock Exchange today as it seeks to take advantage of the UK's growing housing market.

The flotation values Forterra at £360m, with the company missing its target of £450m. The initial public offering (IPO) comprises a sale of 70m shares, representing 35 per cent of the total, priced at 180p.

Forterra has been owned by US private equity firm Lone Star Funds since March last year when it was sold by German company Heidelberg Cement for around $1.4bn (£1bn).

The move by Forterra comes after the £770m flotation of its rival Ibstock in October last year.

The IPO has completed shortly after figures showed the construction industry suffered a sharp slowdown in the first quarter of 2016.

A Royal Institution of Chartered Surveyors' construction market survey, released yesterday for the first three months of 2016, found private housing workloads rose at their slowest pace since fourth quarter of 2012. And this was not offset by any increase in public housebuilding.

Elsewhere, data from the Office for National Statistics (ONS) for February last week showed output dropped by an estimated 0.3 per cent compared with January, which itself was down 0.4 per cent on December.

But Forterra believes it can capitalise on the growing UK housing market. Research by Linton Group last summer found London alone has a 24m brick shortfall.

Forterra chief executive Stephen Harrison said: "We are excited to begin this new period as an independent company with a well-invested and efficient manufacturing base, and the appropriate capital structure to take advantage of the growing UK housing market.

"We welcome our new shareholders and look forward with confidence to the next phase of our development and growth as a listed company.”