Breedon announce 2016 interim results

Business reports ‘excellent first-half performance’; plus completion of Hope acquisition expected 1 August 2016

BREEDON Aggregates, the UK’s largest independent aggregates business, have announced their unaudited interim results for the six months ended 30 June 2016.

With strong contributions from both England and Scotland, first-half revenue was up 2% to £163.0 million (H1 2015: £160.5 million), profit before tax increased by 19% to £20.9 million (£17.5 million), underlying EBIT was up 21% to £22.8 million (£18.9 million) and underlying EBIT margin improved to 14.0% (11.8%).

During the first six months, Breedon Aggregates sold 4.6 million tonnes of aggregates (H1 2015: 4.5 million tonnes), 0.9 million tonnes of asphalt (0.9 million tonnes) and 0.5 million cubic metres of ready-mixed concrete sold (0.4 million cubic metres).

Commenting on the results, executive chairman Peter Tom CBE (pictured) said: ‘We delivered an excellent operating performance in the first half, with both our businesses making strong contributions, improving revenues and EBIT margins.

‘Whatever the prognosis for the UK economy, we remain confident that we can continue to generate value for our shareholders. We have some major contracts which will help to underpin our performance during a period of uncertainty, along with a strong balance sheet and a record of strong cash generation in challenging markets.’

Meanwhile, following the conclusion of the Competition and Markets Authority’s review, Breedon say they now expect to complete the acquisition of Hope Construction Materials Ltd on 1 August 2016, subject to final clearance from the CMA.

Upon completion, the enlarged Group will be renamed Breedon Group plc, subject to approval by shareholders, and the company’s trading name will simultaneously change from Breedon Aggregates to Breedon, providing greater flexibility in view of the company’s broadening product portfolio. The senior team that will lead the enlarged Group was announced last month.

A new visual identity for the Group will be launched to coincide with completion of the acquisition and all the Hope quarries, ready-mixed concrete plants and associated plant and vehicles will be rebranded ‘Breedon’ as soon as possible after this, although the Hope name will be retained for the cement plant and cementitious assets. 

The enlarged Group will comprise three divisions:

• Breedon Northern will combine Breedon’s Scottish operations with Hope’s aggregates and ready-mixed concrete operations in Scotland and the north of England
• Breedon Southern will combine Breedon’s operations in England and Wales with Hope’s remaining aggregates and ready-mixed concrete operations
• Hope Cement will comprise all of Hope’s cementitious assets.

Mr Tom continued: ‘The strategic rationale of the acquisition of Hope remains compelling and it will present new opportunities to deliver self-help improvements. It will also give us an even stronger platform for growth through a broader geographical footprint, increased scale, improved product mix, greater financial capacity and some highly talented people.

‘We fully intend to use this strengthened platform to continue to pursue our strategy of consolidating the UK building materials market. Indeed, we believe that market uncertainty may create further opportunities for value-creating acquisitions and we are currently considering a number of potential bolt-ons.

‘Against this background we remain confident of meeting 2016 market expectations.’