Breedon flags positive outlook

Healthy growth in new infrastructure and housing work over the next two years is expected to underpin growth at quarrying and construction materials firm Breedon.

The group, which operates more than 60 sites in Scotlandandhassuppliedprojects including the Aberdeen Western Peripheral Route and the widening of the A9, said in a trading update that it had delivered “another solid performance” in the ten months to 31 October.

Total group revenue for the period increased by 56 per cent to £561 million with sales volumes of aggregates up by 47 per cent, concrete up by 99 per cent and asphalt by 2 per cent. It said its cement business, for which it did not release figures, is performing as planned.

The company said that assuming normal weather for the remainder of the financial year, underlying earnings before interest and tax are expected to be in line with market expectations.

“Forecasters expect construction output to grow modestly in 2017 and remain broadly flat next year before returning to growth in 2019. More significantly for us, new infrastructure and housing work – which together account for approximately two-thirds of our end-use markets – are expected to show healthy growth over the next two years,” the firm said in a stock market statement.

“We continue to invest in our business at record levels, which is yielding appreciable benefits in terms of enhanced performance and improved productivity.

“This organic improvement gives us confidence that we will make further progress in 2018.”

Breedon will announce its preliminary results on 7 March.