Breedon Aggregates see pre-tax profits rise 19% in H1 2016

894 Breedon Aggregates, the UK’s largest independent aggregates business, saw its profits before tax rise 19% year-on-year in H1 2016 to £20.9 million (£17.5 million H1 2015).

Revenues were up 2% to £163 million (£160.5 million H1 2015); and underlying EBIT was up 21% to £22.8 million (£18.9 million H1 2015). Breedon sold 4.6 million tonnes of aggregates in the six-month period (compared to 4.5 million tonnes in H1 2015). Asphalt sales remained the same year-on-year at 0.9 million tonnes in H1 2016. Meanwhile, ready-mixed concrete sales were up at 0.5 million m³ (compared to 0.4 million m³ in H1 2015).

The company says strong contributions from both England and Scotland were apparent in its first half of 2016 performance.

As planned, Breedon saw a significant increase in capital expenditure as investment continued in expanding capacity and improving operational efficiency.

Integration planning for acquisition of 7447 Hope Construction Materials Limited is said to be well advanced and completion of the acquisition is expected on 1 August 2016, subject to final clearance from the CMA).

Peter Tom CBE, Breedon Aggregates executive chairman, said: “We delivered an excellent operating performance in the first half, with both our businesses making strong contributions, improving revenues and EBIT margins.

“Whatever the prognosis for the UK economy, we remain confident that we can continue to generate value for our shareholders.  We have some major contracts which will help to underpin our performance during a period of uncertainty, along with a strong balance sheet and a record of strong cash generation in challenging markets.  We have also demonstrated our ability to deliver a strong performance through determined self-help and we will maintain this discipline irrespective of market conditions.  

“The strategic rationale of the acquisition of Hope remains compelling and it will present new opportunities to deliver self-help improvements.  It will also give us an even stronger platform for growth through a broader geographical footprint, increased scale, improved product mix, greater financial capacity and some highly talented people. We fully intend to use this strengthened platform to continue to pursue our strategy of consolidating the UK building materials market.  Indeed, we believe that market uncertainty may create further opportunities for value-creating acquisitions and we are currently considering a number of potential bolt-ons.

“Against this background we remain confident of meeting 2016 market expectations.”