Breedon’s strong 2016 performance and Sherburn acquisition

894 Breedon today revealed strong performance figures for the 10 months to 31 October 2016, while also announcing the acquisition of the Sherburn Minerals Group (Sherburn) for £15.7 million (€18.4 million).

Both volumes and revenues of the former Breedon Aggregates business were ahead of the same 10-month period of 2015, supplemented by a three-month contribution from the former 7447 Hope Construction Materials company (Hope).

Including Hope, Group sales volumes of aggregates increased by 25%, asphalt by 1% and concrete by 96%.

Total Group revenue for the first 10 months of 2016 increased by 31% year-on-year to approximately £361 million (€423 million). The integration of Hope is said by Breedon to be progressing well, with synergies coming through earlier than had previously been expected.

Assuming that weather conditions remain favourable for the remainder of the financial year, the Breedon Group’s underlying EBIT for the full year is expected to be ahead of current market expectations.

The purchase of Sherburn is said to have been funded from Breedon’s existing resources. A heavyside building materials business with operations in the north of England and Scotland, Sherburn supplies aggregates and ready-mixed concrete, together with cement from two import terminals, in Blyth near Newcastle and Dundee in eastern Scotland.  

Looking at the Breedon Group’s prospects for 2017, a Group statement said: “The UK economy has generally held up well following the EU Referendum result in June.  Construction activity has been broadly sustained and, although uncertainty remains about the likely timing and terms of our departure, we remain positive about the outlook for the industry. We were encouraged by the Chancellor’s stated commitment last week to increase investment in our national infrastructure, together with continued support for housebuilding, both of which should have a beneficial impact on our business in the medium term.

“We have a number of projects already secured and underway for next year and the continuing integration of Hope, coupled with a full-year contribution from Sherburn, are expected further to enhance our performance.  We therefore remain confident of making continued progress in 2017.”

Breedon will announce its preliminary results for the year ending 31 December 2016 on 8 March 2017.