The Breedon on the Hill, Derby, England-headquartered Group’s underlying pre-tax profit (excluding acquisition-related expenses, redundancy and reorganisation costs, property items, amortisation of acquisition intangibles and related tax items) rose 15% to £37.4 million, compared to £32.5 million in H1 2017. Meanwhile, net debt stood at £383.6 million in H1 2018, compared to £146.8 million over the same six months of 2017.
Breedon Group sales of aggregates and asphalt were both up in H1 2018. The Group sold 9.3 million tonnes of aggregates (7.9 million tonnes in H1 2017); and 1.2 million tonnes of asphalt (0.9 million tonnes in H1 2017). Group sales of ready-mixed concrete were down at 1.6 million m³ (1.7 million m³ in H1 2017).
Peter Tom CBE, Breedon Group executive chairman, said: “This was one of the busiest periods in the Group’s history, with four acquisitions completed by 1 July including our first outside Great Britain, coupled with continued organic investment in a number of key projects. We had anticipated a challenging 2018 and so it proved in the first half, with testing trading conditions exacerbated by the severe weather in the first quarter and rising input costs throughout the period. Despite these headwinds, we delivered a resilient performance.
“We did much in the first six months of this year to rebalance the Group, both geographically and operationally. Our new businesses in Ireland provide a valuable economic counterpoint to the continuing short-term challenges of our markets in GB and our asset swap with Tarmac has expanded our aggregates base and further reduced our reliance on the ready-mixed concrete market, thereby improving the quality of our earnings.
“We continue to view the medium- to long-term outlook in GB positively, with infrastructure spending forecast to increase steadily over the next three years and Government strategies to address our chronic housing shortage expected to fuel continued growth in the residential sector. Market conditions in Ireland are expected to be even healthier, with construction output in the Republic of Ireland forecast to grow by approximately 28 per cent in the three years to 2020 and NI expected to sustain construction output at approximately £3 billion per annum from 2018 to 2022.
“In the more immediate term, taking into account our more balanced geographical exposure, we remain comfortable with current market expectations for 2018.”
In other Breedon Group news, Peter Cornell will join the Group’s Board as an independent non-executive director on 1 October 2018. He is a partner in Metric Capital, a Special Situations Fund targeting mid-sized companies throughout Europe with approximately €2 billion of assets currently under management.
Prior to founding Metric Capital with his two partners in 2011, Cornell was a managing director at Terra Firma, one of Europe’s leading private equity firms. He formerly spent more than 20 years with international law firm Clifford Chance, latterly as global managing partner.
Cornell is currently non-executive chairman of Grant Thornton (C.I.) and Lexington Consultants, a professional service firm consultancy. He is also a non-executive director of Schroders (C.I.) Limited, F&C Commercial Property Holdings Limited and IE Business School in Madrid.
Commenting on Cornell’s appointment Peter Tom said: “Peter brings a wealth of financial and corporate experience to Breedon and we are delighted to welcome him to our Board. We look forward to drawing on his wide-ranging expertise as we continue to grow and develop the Group.”
It is expected that Cornell will serve on the Group’s Remuneration, Audit and Nomination Committees.
Breedon Group expect to confirm the appointment of a further non-executive director before the end of this year.
