One of the busiest periods in its history has seen the Breedon Group generate 16% more revenue during the first half of this year.
The construction materials supplier has posted revenues of £378.4 million for the six months ending 30 June 2018, compared to £326.3 million for the same period in 2017. It has also made an underlying profit before tax of £37.4 million – a 15% increase.
However, its revenue has fallen by 3% and its debt has risen by £236.8 million.
The company made four acquisitions during the first half of 2018 (including its first outside Britain), continued to invest in key projects, and completed an asset swap with Tarmac. It says it “remains comfortable” about the rest of the year.
According to its unaudited results, released today, the Group had revenue of £378.4 million, underlying EBIT of £42 million, underlying profit before tax of £30.4 million, and net debt of £383.6 million. It maintained an underlying EBIT margin of 11.1%.
It sold 9.3 million tonnes of aggregate (compared to 7.9 million tonnes over the same period in 2017), 1.2 million tonnes of asphalt (compared to 0.9 million tonnes last year) and 1.6 million m3 of ready-mixed concrete (compared to 1.7 million m3 in the first half of 2017).
It acquired the Lagan Group in Ireland – which it says is a “key strategic step outside Great Britain” – and completed another two bolt-on acquisition in England and Scotland. It improved its safety record, reducing its Lost Time Injury Frequency Rate from 1.41 in the first half of 2017 to 0.94 during the same period this year.
Peter Tom CBE, Breedon Group’s Executive Chairman, 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.
“We did much in the first six months of this year to rebalance the Group, both geographically and operationally. Our new 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. 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.”