Breedon Aggregates 1H16 interim results

Highlights

• Excellent first-half operating performance, with strong contributions from both England and Scotland.
• Underlying EBIT margin improved to 14.0%.
• Strong earnings growth and cash generation.
• As planned, significant increase in capital expenditure as investment continued in expanding capacity and improving operational efficiency.
• Integration planning for acquisition of Hope Construction Materials Limited well advanced and completion of acquisition expected on 1 August (subject to final clearance from the CMA).
• Further bolt-on acquisitions under consideration.
• We remain confident of meeting 2016 market expectations.

Peter Tom CBE, Executive Chairman, commented:
“We delivered an excellent operating performance in the first half, with both our businesses making strong contributions, improving revenues and EBIT margins.

“Whatever the prognosis for the UK economy, we remain confident that we can continue to generate value for our shareholders. We have some major contracts which will help to underpin our performance during a period of uncertainty, along with a strong balance sheet and a record of strong cash generation in challenging markets. We have also demonstrated our ability to deliver a strong performance through determined self-help and we will maintain this discipline irrespective of market conditions.

“The strategic rationale of the acquisition of Hope remains compelling and it will present new opportunities to deliver self-help improvements. It will also give us an even stronger platform for growth through a broader geographical footprint, increased scale, improved product mix, greater financial capacity and some highly talented people. We fully intend to use this strengthened platform to continue to pursue our strategy of consolidating the UK building materials market. Indeed, we believe that market uncertainty may create further opportunities for value-creating acquisitions and we are currently considering a number of potential bolt-ons.

“Against this background we remain confident of meeting 2016 market expectations.”

Adapted from press release by Joseph Green

Read the article online at: https://www.worldcement.com/europe-cis/21072016/breedon-aggregates-1h16-interim-results-575/