The Group says that robust pricing and operational excellence have "more than offset" the effect of moderating volumes.
Compared to the same period in 2022, Breedon's revenue for the first ten months increased by 8%, and revenue for the four months to 31 October rose by 4%. On a like-for-like basis, revenue grew 5% in the first ten months or 1% for the four months to 31 October.
As expected, changes to building regulations in the UK that took effect in June impacted ready-mixed concrete volumes. Aggregate and asphalt volumes have continued to moderate. However, pricing has been sustained, and Breedon says it has maintained tight control over its cost base.
Breedon continues to generate good free cash flow and is on track to deliver a further reduction in covenant leverage at the year-end, providing financial flexibility to continue to invest for growth.
The Group's GB business remained focused on self-help actions to mitigate the impact of a softening market, delivering the operational excellence programme implemented in the first half. Surfacing completed several aviation projects and remains well-represented in National Highways work.
In Ireland, market dynamics were unchanged, with tendering in the Republic of Ireland underpinned by long-term structural growth drivers and healthy budgets, while the ongoing lack of a governing assembly impacted the pipeline in Northern Ireland. The integration of Robinson Quarry Masters, completed in the first half, continues progressing according to plan.
The Cement business maintained a robust performance in GB and Ireland. The Hope, Derbyshire, central England plant completed its second scheduled kiln shutdown on time and budget. The Kinnegad Cement plant maintained its world-leading performance with alternative fuel substitution of over 80%.
Breedon continues progressing regarding its sustainability priorities; our Breedon Balance range of products is gaining traction, and it continues reducing its cement's clinker content. The results of our 2023 colleague engagement survey showed pleasing increases in both participation and engagement.
Following the move to the Main Market in the first half, Breedon entered the FTSE 250 index during September.
The Group has delivered a strong performance in the year to date. As a result, it expects to achieve full-year 2023 underlying EBIT ahead of market consensus.
In the UK, the latest CPA Autumn report forecast continues to show a soft construction outlook driven by low levels of housing activity. The large budget surplus and falling debt burden in the Republic of Ireland enabled further commitments to infrastructure spending and housebuilding in Budget 2024.
Due to the macroeconomic landscape, visibility in the construction materials sector remains limited in the short term, particularly in GB, offset by long-term structural growth drivers in infrastructure and housebuilding. Consequently, the Group continues to focus on self-help, executing operational and commercial excellence programmes while pursuing opportunities in our healthy M&A pipeline.
Breedon's chief executive officer, Rob Wood, said: "Notwithstanding the market backdrop, the Breedon team continues to deliver, and we are delighted to report a trading performance ahead of expectations. Against the uncertain political and economic backdrop, our teams have adapted well to deliver a compelling performance, whatever the prevailing market conditions.
"Our strategic focus on ensuring Breedon is a great place to work, taking care of our people and the communities around our sites, has once again been reflected in both our financial performance as well as our colleague engagement, of which I am particularly proud. But we never settle - we will continue to seek ways to operate as efficiently and sustainably as possible, invest in our people and grow our business so we are positioned to succeed when the construction materials market returns to growth."
