Breedon Group interim results announcement
Company reports 100% rise in revenue and 50% increase in profit in first six months of 2017
BREEDON Group plc have reported a doubling in revenue and a 50% increase in profit in the first half of 2017. The company’s unaudited interim results for the six months to 30 June reveal a pre-tax profit of £31.2 million (30 June 2016: £20.9 million) with revenue up 100% to £326.3 million (2016: £163.0 million).
The former Breedon Aggregates business posted a strong profit improvement and the former Hope Construction Materials business made a robust contribution, despite the phased shutdown of both its cement kilns for planned annual maintenance and upgrade during the first half.
Underlying earnings before interest and tax (EBIT) increased by 57% during the half year to £35.8 million (2016: £22.8 million), whilst the underlying EBIT margin was 11.0% (2016: 14.0%), reflecting, as anticipated, the lower margin delivered by the former Hope business and the phasing of Hope Cement’s shutdowns.
However, the former Breedon Aggregates business, delivered an underlying EBIT margin of 15.8%, comfortably ahead of the Group’s medium-term target of 15% by 2020.
Sales of aggregates during the first half of 2017 were up 3.3 million tonnes to 7.9 million tonnes, whilst ready-mixed concrete sales rose from 0.5 million cubic metres in the first half of 2016 to 1.7 million cubic metres this year. Asphalt sales for the half year remained flat at 0.9 million tonnes.
Commenting on the results, executive chairman Peter Tom CBE (pictured) said: ‘I am pleased to report that in the first half of 2017 the former Breedon Aggregates business posted a strong profit improvement and the former Hope Construction Materials business made a robust contribution, even after taking into account the shutdowns of both our cement kilns for planned annual maintenance and upgrade during the first half, which were completed on time and to budget.
‘Although the outcome of the General Election, coupled with the commencement of Brexit negotiations, has created some further uncertainty for the UK economy, the outlook for UK construction remains encouraging. It is reassuring that the Government’s direction of travel appears to be moving away from continued austerity towards fiscal stimulus, which can only be helpful to our industry.
‘We have consistently demonstrated our ability to generate value for our shareholders irrespective of economic conditions, through flexible and imaginative customer service, rigorous cost control, focused investment and a culture of continuous operational improvement. These disciplines, coupled with a strong balance sheet and healthy cashflow, put us in a strong position to take advantage of future growth opportunities, both organically and through further bolt-on acquisitions.
‘More immediately, our performance in the first six months and our prospects for the second half give us confidence that we will meet 2017 market expectations.’
