Trading Update

RNS Number : 9723T

Breedon Group PLC

20 November 2019

 

   NEWS RELEASE
 

    20 November 2019                                                                                    

BREEDON GROUP PLC ("Breedon" or "the Group")

Trading Update

Trading performance

Breedon delivered a strong performance in the 10 months to 31 October 2019, with increased revenues, improved underlying EBIT and continuing robust cash generation, including a 10-month contribution from the former Lagan Group ("Lagan"), acquired in April 2018.

These results were achieved against the backdrop of a flat construction market in Great Britain ("GB"), 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 four per cent, asphalt by eight per cent and cement by six per cent, while ready-mixed concrete volumes declined by five per cent.  As a result, Group revenues grew by eight per cent to approximately £800 million.

The integration of Lagan is now largely complete and we remain confident of delivering 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 expectations¹.

Outlook

Breedon continues to be a well-invested business, with capital expenditure maintained in line with depreciation, which is enabling us to continue to enhance our operational performance and improve our productivity.  Our cash generation is allowing us not only to maintain this high level of investment, but also quickly to pay down our borrowings, and we expect year-end leverage to fall further to approximately 1.5 times underlying EBITDA on a pre-IFRS 16 basis. 

Looking ahead, while the upcoming General Election and ongoing Brexit negotiations create near-term uncertainty, the longer-term outlook for our markets remains encouraging with forecasters expecting GB construction to grow modestly in 2020 whilst Ireland is expected to see further double digit growth.  Furthermore, we have consistently proved that we can produce superior results irrespective of market conditions.  Our focus on driving organic improvement, together with a healthy acquisition pipeline, gives us confidence that we will make further progress in 2020.

We will announce our preliminary results for the year ending 31 December 2019 on 11 March 2020.

¹ The Group believes that current market expectations for Underlying EBIT range from £114 million to £118 million. 

 

Note to editors

Breedon Group plc is a leading construction materials group in Great Britain and Ireland.  It operates two cement plants and an extensive network of quarries, asphalt plants and ready-mixed concrete plants, together with slate production, concrete and clay products manufacturing, contract surfacing and highway maintenance operations.  The Group employs nearly 3,000 people and has nearly 900 million tonnes of mineral reserves and resources.  Its strategy is to continue growing organically and through the acquisition of businesses in the heavyside construction materials market.

For further information:

Breedon Group plc

Pat Ward, Group Chief Executive

Rob Wood, Group Finance Director                                       01332 694010

Stephen Jacobs, Group Head of Communications               07831 764592

Cenkos Securities (NOMAD and Joint Broker)

Max Hartley/Harry Hargreaves                                          020 7397 8900

Numis (Joint Broker)

Ben Stoop/Heraclis Economides                                            020 7260 1000

Teneo

Matt Denham/ Rachel Miller                                                   020 7420 3180

 

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