SHARE PUNT OF THE WEEK

PRICE: 69.9p

WHO IS IT?

Breedon is the largest independent construction materials company in the UK. It owns quarries producing sand and gravel, asphalt plants, cement factories, concrete products and surfacing services.

WHAT’S THE LATEST?

In its half-year results last month, Breedon said revenue had risen 16pc to £378.4m. Underlying profit was up 15pc to £37.4m and its performance was resilient in a challenging market. It has recently acquired Lagan Group in Ireland, which it said was a ‘key strategic step outside Great Britain’.

WHO BACKS IT?

Fund managers including Invesco and Woodford Investment Management are among Breedon’s top ten shareholders, as is roofing company Abicad, which sold construction materials firm Hope to Breedon in 2015. Peter Tom, the company’s executive chairman, is its ninth largest shareholder, while other top ten shareholders include fund managers Merian, Axa and Blackrock.

WHY YOU SHOULD INVEST

Ian Forrest, investment research analyst at The Share Centre, says: ‘The company benefits from the fact that it supplies a wide range of aggregates used by a variety of sectors, including construction and road building, and is benefiting from increased scale thanks to acquisitions.’ Much of the company’s growth has come from housebuilding, Forrest adds, which should continue as there is strong demand from both main political parties to increase housing stock.

...AND WHY YOU SHOULDN’T

However, there are challenges for the likes of Breedon. ‘Poor weather can impact on performance and some costs have also been rising this year,’ Forrest says. Meanwhile, transactions in the housing sector tend to be cyclical, he adds, and with Brexit uncertainty and rising interest rates, activity could fall away in the short term.