Breedon Aggregates half-year results

894 Breedon Aggregates, the UK’s largest independent aggregates business, is still on the look-out for acquisitions.

Its results for the six months to 30 June, 2012 show group revenue for the half-year was broadly in line with the previous year at £83 million (30 June 2011: £84.7 million).

Underlying group EBITDA, before the company’s share of associated undertakings, increased by 16% to £9.7 million (30 June 2011: £8.4 million). The underlying EBITDA margin improved to 11.7% (30 June 2011: 9.9%), reflecting higher selling prices and sustained downward pressure on operating costs during the period.

Group profit for the period was £2.1 million.

Looking ahead Peter Tom, executive chairman, said: “We continue to review a number of potential acquisition opportunities. The proposed 868 Tarmac-725 Lafarge joint venture was approved by the Competition Commission in May subject to certain disposals being made and that divestment process is now underway. As previously stated, the board will carefully assess this opportunity to determine whether additional value can be created for shareholders: however, our core strategy of organic improvement supplemented by bolt-on acquisitions remains very much on track and will continue to drive future earnings growth.

“Whilst we do not expect any significant recovery in construction output in the short term, the business has performed well in the first six months of 2012 and we are confident of making further progress in the second half.”

The company says that trading in the first half was in line with its expectations, which it views as a creditable performance given the exceptionally weak UK market conditions.

Breedon Aggregates’ English business “looks very different today from the business we acquired in 2010.  We have a first-rate management team, improving margins and a very pleasing win-rate in a highly competitive market.”

The performance of C&G Concrete, acquired in July 2011, has been very encouraging, while 4352 Nottingham Readymix, acquired earlier this year, also had a good first half.

The general outlook for construction in the UK continues to be affected by Eurozone worries and reduced public sector spending: however there are significant regional variations.

The company says its expectation is that product volumes in the second half of the year will be similar to 2011 and against this backdrop it continues to focus on tight control of costs and careful work selection.