In the 10 months to 31 October 2019, Breedon experienced increased revenues, improved underlying EBIT and a 10-month contribution from the former Lagan Group (Lagan), acquired in April 2018. These results were achieved despite the flat construction market in Britain, where lower industry sales volumes were recorded for all major heavyside construction materials in the nine months to 30 September 2019.
Group sales volumes of aggregates increased by 4%, asphalt by 8% and cement by 6%, while ready-mixed concrete volumes declined by 5%. As a result, Breedon Group revenues grew by 8% to approximately £800 million. The integration of Lagan is now largely complete and Breedon Group hope to deliver the anticipated annual cost synergies. Roadway Civil Engineering & Surfacing Ltd, acquired on 1 October, is performing as expected.
Assuming no materially adverse weather conditions for the remainder of the year, the Group’s underlying EBIT for the full year is expected to be in line with current market expectations.
Breedon’s capital expenditure is in line with depreciation, which they hope will enable them to enhance operational performance and improve productivity, as well as maintain high levels of investment, and pay down their borrowings.
The company expects their year-end leverage to fall further to approximately 1.5 times, underlying EBITDA on a pre-IFRS 16 basis. While the upcoming General Election and ongoing Brexit negotiations create near-term uncertainty, the longer-term outlook for GB markets may be seen to be more encouraging, with forecasters expecting construction to grow modestly in 2020, whilst Ireland is expected to see further double-digit growth.
Read the article online at: https://www.worldcement.com/europe-cis/20112019/breedon-group-releases-performance-and-trading-updates/