Breedon Group plc has published its unaudited interim results for the six months ended 30 June 2020.
The statement shows a 25% year on year fall in revenue compared to 2019 for the past 6 months but revenues for June are now back to 99% of what they were in June 2019.
Having furloughed more than 80% of its staff (topping up their wages to 100%), the company started a staggered reopening of its sites in early May, with the process gathering pace throughout the ensuing two months. By the end of June, over 90% of the sites were open again, including both cement plants, with 82% cent of staff back at work.
The timing of the recovery varied across the Group, with Republic of Ireland (RoI) operations recovering strongly from late May onwards, while volumes in England,Wales and NI also showed a steady improvement. Scotland remained subdued until well into June as a result of the delayed lifting of restrictions by the Scottish Parliament.
Trading in the first quarter was progressing broadly in line with expectations until the latter part of March when the pandemic began to take hold. The impact on demand and consequently on business was immediate and significant.
Revenues in April fell to 19% of those recorded in the same month of 2019, followed by 45% in May, before improving to 99% in June as the recovery began to gather pace. Revenue for the half-year was £335.3 million (2019: £447.4 million).
The company sees its near-term outlook as dependent on the speed at which demand from customers recovers and returns to more normal levels of activity. Its encouraged by recent announcements from a number of contractors, housebuilders and merchants that broadly point to a steady improvement in trading conditions in the UK, whilst in RoI the market has returned to near pre-COVID-19 levels of demand.
In June, Breedon appointed its first Group Head of Sustainability, who is now working closely with the company's management teams, functional teams and wider stakeholders to develop and embed a new sustainability strategy.
The completion of the acquisition of certain of CEMEX’s UK assets is expected to take place imminently.
Pat Ward, Group Chief Executive, commented:“Following the encouraging performance of our businesses in the first 12 weeks of the year, the move into lockdown and immediate fall in demand in the latter part of March led us into a swift and managed shutdown of the majority of our operations, leaving open only those which were servicing critical needs. This decisive action ensured the protection of our employees, left our sites in a safe condition and also positioned us to return quickly to production when demand began to return in early May.
“The recovery in our markets now appears to be well underway, and we have seen continued improvement into July. The great majority of our sites are now open, including both our cement plants. While near-term uncertainty remains, there is significant pent-up demand to be satisfied in both housing and infrastructure, reinforced by the substantial programme of investment confirmed by the Chancellor earlier this month. Looking to the longer-term, we believe the outlook forour markets remains positive, supporting our confidence in the prospects for the Group.”
