In the four months to 31 October 2022, Breedon delivered revenue growth of 16% compared to the same period in 2021. This resulted in Group revenue of £1,186mn from 1 January - 31 October 2022, some 14% ahead of the equivalent ten months last year and 12% on a like-for-like basis. A Group statement says trading conditions during the second half remained supportive, enabling the Group to fully recover rising input costs through robust pricing and disciplined cost management.
While the Breedon on the Hill, Derbyshire, England-headquartered Group's volumes are behind the exceptional levels recorded during the post-Covid recovery in 2021, they remain ahead of 2019 on a like-for-like basis. Successful implementation of Breedon's dynamic pricing strategy has offset the impact of softer market volumes. Breedon continued to generate strong free cash flow and is on track to deliver year-end covenant leverage comfortably below x1.
The Group statement continued: "In GB, as well as delivering a strong operational performance, we advanced the business strategically. In surfacing, we were delighted to be awarded a place on the National Highways Pavement Delivery Framework, North Super Region, and we acquired Thomas Bow, an East Midlands surfacing business. In materials, we are commissioning our new Mansfield asphalt plant, and we expanded our capability to include marine sand dredging through the acquisition of Severn Sands.
"In Ireland, activity in RoI accelerated in line with normal seasonal trends. The pace of activity in Northern Ireland continues to be impacted by the absence of the governing Assembly; nonetheless, we were pleased to be awarded a number of framework contracts.
"The Cement business performed well, and at our Hope plant, we completed the scheduled maintenance of the second kiln on time and to budget."
The Group statement said Breedon had made further progress on its sustainability ambitions, achieving the Group's highest-ever rates of alternative fuels substitution and biomass usage and expanding the production of reduced clinker cement.
Analysing Breedon's trading outlook, the Group statement said Breedon is on track to deliver record earnings in 2022. "While construction output has softened in the second half, the majority of our end markets remain resilient, with infrastructure and industrial markets continuing to deliver growth. Consequently, we expect to deliver full-year results in line with expectations as set out with our interim results.
"While the short-term economic outlook limits visibility for the sector, our longer-term prospects remain well-underpinned by structural growth dynamics, and our exposure to infrastructure, housing and industrial end-markets is favourable. Independent of market conditions, there are many opportunities for progression within our control; optimising our assets, executing our active M&A pipeline in GB and Ireland and continuing to recover input cost inflation through our dynamic pricing strategy."
Breedon CEO Rob Wood said: "This time last year, we reminded our investors of the agile and entrepreneurial DNA that sets Breedon apart. Our rapid response to changing market conditions, local focus, vertically-integrated business model and disciplined financial framework will again enable us to deliver record results.
"Visibility in the trading landscape has been poor for some years now for a variety of reasons. Against this constantly changing backdrop, our team's commitment and resolve have delivered quality products and great service to our customers, regardless of the economic or political landscape. For this, we thank them. Their focus and determination, in turn, continue to deliver for all our stakeholders."
