Positive trading update from Breedon

Company issues full-year trading update and announces appointment of new finance director

IN a trading update issued in advance of their preliminary results announcement scheduled for 4 March 2014, Breedon said trading performance had been very encouraging in 2013 and pre-tax profits for the full year to 31 December were expected to be somewhat ahead of market expectations, assuming favourable weather conditions for the remainder of the year.

Sales volumes of aggregates, ready-mixed concrete and asphalt were all said to be ahead year on year in both England and Scotland, assisted by contributions from the Group’s acquisitions of Aggregate Industries’ operations in northern Scotland and Marshalls’ quarries in England.

Breedon said Group sales revenue in the second half of the year had been stronger than in the first half and the full-year EBITDA margin was expected to be ahead of the previous year, driven by continuing improvement in the underlying business and the benefit of acquisitions.

Both the English and Scottish businesses continued to make good progress this year, helped by a general improvement in construction demand and a continued focus on management of costs, prudent investment and careful selection of work.

The Competition Commission’s investigation into Breedon’s acquisition of Aggregate Industries’ Scottish operations is continuing and discussion regarding their findings is likely to commence in January. However, Breedon continue to believe that there are only minor issues in one product area, which may require disposal of a limited number of individual assets.

Looking ahead to next year, Breedon said the outlook was more positive than it had been for a number of years, with the Mineral Products Association forecasting 2–4% growth in aggregates volumes, 3–5% growth in ready-mixed concrete and 2–4% growth in asphalt, and the Construction Products Association also forecasting a return to growth in UK construction output in 2014.

Against this backdrop, the Group said it had reason to be optimistic about the coming year and remained confident of making further progress in 2014.

In a separate development, Ian Peters has announced his intention to step down as group finance director in order to pursue other interests. He will be succeeded by chartered accountant Rob Wood with effect from March 2014. Mr Wood is currently group financial controller of Drax Group plc and was previously chief financial officer – Australia & Asia Pacific with Hanson plc.