Challenging six months for Breedon
Company delivers resilient first-half performance despite testing trading conditions and severe weather
BREEDON’s unaudited interim results for the six months ended 30 June 2018 highlight a ‘resilient performance in a challenging market’ which saw pre-tax profit decline by 3% to £30.4 million (H1 2017: £31.2 million) on revenue that increased by 16% to £378.4 million (£326.3 million).
During the first half of 2018, the company sold 9.3 million tonnes of aggregates (H1 2017: 7.9 million tonnes), 1.2 million tonnes of asphalt (0.9 million tonnes) and 1.6 million cubic metres of ready mixed concrete (1.7 million cubic metres).
Commenting on the interim results, executive chairman Peter Tom CBE said: ‘This was one of the busiest periods in the Group’s history with four acquisitions completed by 1 July, including our first outside Great Britain, coupled with continued organic investment in a number of key projects.
‘We had anticipated a challenging 2018 and so it proved in the first half, with testing trading conditions exacerbated by the severe weather in the first quarter and rising input costs throughout the period. Despite these headwinds, we delivered a resilient performance.’
He continued: ‘We did much in the first six months of this year to rebalance the Group, both geographically and operationally. Our new [Lagan] businesses in Ireland provide a valuable economic counterpoint to the continuing short-term challenges of our markets in GB and our asset swap with Tarmac has expanded our aggregates base and further reduced our reliance on the ready-mixed concrete market, thereby improving the quality of our earnings.
‘We continue to view the medium-to-long-term outlook in GB positively, with infrastructure spending forecast to increase steadily over the next three years and government strategies to address our chronic housing shortage expected to fuel continued growth in the residential sector.’
Mr Tom added: ‘Market conditions in Ireland are expected to be even healthier, with construction output in the Republic of Ireland forecast to grow by approximately 28% in the three years to 2020 and Northern Ireland expected to sustain construction output at approximately £3 billion per annum from 2018 to 2022.
‘In the more immediate term, taking into account our more balanced geographical exposure, we remain comfortable with current market expectations for 2018.’
Meanwhile, Breedon have announced that Peter Cornell is to join the board as an independent non-executive director on 1 October this year.
Mr Cornell is a founding partner of Metric Capital, a special situations fund targeting mid-sized companies throughout Europe, with approximately €2 billion of assets currently under management.
Commenting on the appointment, Mr Tom said: ‘Peter brings a wealth of financial and corporate experience to Breedon and we are delighted to welcome him to our board. We look forward to drawing on his wide-ranging expertise as we continue to grow and develop the Group.’
Breedon say they expect to confirm the appointment of a further non-executive director before the end of this year.
