Breedon’s results ‘resilient’ after buying Lagan’s building materials arm in April
BREEDON Group, which bought over Lagan Group’s building materials arm in a £455m deal in April, has announced “resilient” trading results.
The Leicestershire-headquartered listed company posted a revenue of £378.4m for the six months to June 30, 2018, a 16% rise from £326.3m during the same period in 2017.
Its underlying profit before tax for the six months was up 15% to £37.4m, not including acquisition-related expenses, it said in a statement, while its profit before tax sat at £30.4m, 3% less than the year prior.
The figures include a 10-week “maiden contribution” from the Lagan Group as well as costs from three other acquisitions.
Executive chairman of Breedon Peter Tom said the results reflect one of the group’s busiest and challenging periods in its history.
He said: “We had anticipated a challenging 2018 and so it proved in the first half, with testing trading conditions exacerbated by the severe weather in the first quarter and rising input costs throughout the period. Despite these headwinds, we delivered a resilient performance.
“We did much in the first six months of this year to rebalance the group, both geographically and operationally. Our new businesses in Ireland provide a valuable economic counterpoint to the continuing short-term challenges of our markets in GB and our asset swap with Tarmac has ex- panded our aggregates base and further reduced our reliance on the ready-mixed concrete market, thereby improving the quality of our earnings.”
Mr Tom expects new government strategies to boost construction output in the UK and he anticipates ROI conditions will be “even healthier with construction output forecast to grow by approximately 28 per cent in the three years to 2020 and NI expected to sustain construction output at approximately £3bn per annum from 2018 to 2022,” he added.
Breedon Group, which is one of the biggest in the construction materials sector in the UK and Ireland, operates building material plants and quarries as well as contract surfacing businesses. It employs nearly 3,000 people.
Its strategy is to continue growth through the acquisition of businesses in the “heavyside” construction materials market, it said.
Speaking about the Lagan transaction earlier this year, Mr Tom added: “Over the last eight years we have pursued a successful buy-and-build strategy which has established Breedon as the largest independent construction materials business in the UK, and the acquisition of Lagan is another strategic step for us.
“We believe it has the potential to add significantly to the group’s performance.”