Breedon Aggregates note growth concerns despite record company results in 2015

RSS894 Breedon Aggregates has posted record results for 2015, but senior company figures say an “exciting new era” for the company in 2016 is accompanied by concern that the EU referendum could have an adverse effect on growth, with “increasing concern” also apparent over global growth being hit by the Chinese economy.

A leading UK-based producer of aggregates, asphalt and ready-mixed concrete for builders, Breedon said its pre-tax profits in the year to December 31 rose 46.4% to £31.3 million (€40.4 million) with an 18.1% increase in revenue to £318.5 million (€411.3 million).

During the year, the group finalised its biggest contract, the £55 million (€71 million) Aberdeen Western Peripheral Route roadbuilding joint venture, and agreed subject to CMA approval, to buy 7447 Hope Construction Materials in county Derbyshire, England for £336 million (€433.9 million).

Earlier this year, new chief executive Pat Ward replaced Simon Vivian, who will stay on the board as a non-executive director.

In their jointly presented Review of 2015 accompanying Breedon’s record trading figures, Breedon executive chairman Peter Tom and Simon Vivian note the Government’s commitment to infrastructure investment and all the relevant forecasting bodies predictions of modest but sustained growth in construction over the next few years.

“This means a steady growth in demand for our products, with the MPA (2897 Mineral Products Association) forecasting growth in aggregates volumes this year of around 4 per cent, asphalt volumes up by around 1 per cent and concrete up by around 3 per cent. Against this background, volumes are expected to recover gradually to pre-recession levels by 2020,” the pair state.

Tom and Vivian also note how  the acquisition of Hope, due to be completed by mid-2016, represents a “major step forward for Breedon Aggregates, almost doubling the size of our business”.

But they acknowledge "increasing concern" that the Chinese economy and the general slowdown in the emerging markets could hit global growth.

"Domestically, the EU referendum could also have an adverse effect on growth,” Tom and Vivian add in their annual review.

"Notwithstanding this, Breedon Aggregates begins an exciting new era in 2016 with the planned acquisition of Hope and we look forward to the future with confidence."