Breedon release upbeat trading update
Company delivers strong performance in the 10 months to the end of October 2019
IN a trading update for the 10 months to 31 October 2019, Breedon have reported a ‘strong performance’ with increased revenues, improved underlying EBIT and continuing robust cash generation, including a 10-month contribution from the former Lagan Group, acquired in April 2018 for £455 million.
Against the backdrop of a flat construction market in Great Britain, where lower industry sales volumes were recorded for all major heavy-side construction materials in the nine months to 30 September 2019, Breedon 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.
With the integration of Lagan now largely complete, Breedon say they remain confident of delivering the anticipated annual cost synergies. Roadway Civil Engineering & Surfacing Ltd, who were acquired on 1 October 2019, are also said to be 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.
Looking ahead, while the upcoming General Election and ongoing Brexit negotiations are creating near-term uncertainty, Breedon believe the longer-term outlook for their markets remains encouraging with forecasters expecting GB construction to grow modestly in 2020, and Ireland expected to see further double-digit growth.
Breedon’s preliminary results for the year ending 31 December 2019 will be announced on 11 March 2020.