Breedon Group PLC Trading Update (9723T)
November 20 2019 - 2:00AM
UK Regulatory
TIDMBREE
RNS Number : 9723T
Breedon Group PLC
20 November 2019
NEWS RELEASE
20 November 2019
BREEDON GROUP PLC ("Breedon" or "the Group")
Trading Update
Trading performance
Breedon delivered a strong performance in the 10 months to 31
October 2019, with increased revenues, improved underlying EBIT and
continuing robust cash generation, including a 10-month
contribution from the former Lagan Group ("Lagan"), acquired in
April 2018.
These results were achieved against the backdrop of a flat
construction market in Great Britain ("GB"), where lower industry
sales volumes were recorded for all major heavyside construction
materials in the nine months to 30 September 2019.
Group sales volumes of aggregates increased by four per cent,
asphalt by eight per cent and cement by six per cent, while
ready-mixed concrete volumes declined by five per cent. As a
result, Group revenues grew by eight per cent to approximately
GBP800 million.
The integration of Lagan is now largely complete and we remain
confident of delivering the anticipated annual cost synergies.
Roadway Civil Engineering & Surfacing Ltd, acquired on 1
October, is performing as expected.
Assuming no materially adverse weather conditions for the
remainder of the year, the Group's Underlying EBIT for the full
year is expected to be in line with current market expectations(1)
.
Outlook
Breedon continues to be a well-invested business, with capital
expenditure maintained in line with depreciation, which is enabling
us to continue to enhance our operational performance and improve
our productivity. Our cash generation is allowing us not only to
maintain this high level of investment, but also quickly to pay
down our borrowings, and we expect year-end leverage to fall
further to approximately 1.5 times underlying EBITDA on a pre-IFRS
16 basis.
Looking ahead, while the upcoming General Election and ongoing
Brexit negotiations create near-term uncertainty, the longer-term
outlook for our markets remains encouraging with forecasters
expecting GB construction to grow modestly in 2020 whilst Ireland
is expected to see further double digit growth. Furthermore, we
have consistently proved that we can produce superior results
irrespective of market conditions. Our focus on driving organic
improvement, together with a healthy acquisition pipeline, gives us
confidence that we will make further progress in 2020.
We will announce our preliminary results for the year ending 31
December 2019 on 11 March 2020.
(1) The Group believes that current market expectations for
Underlying EBIT range from GBP114 million to GBP118 million.
Note to editors
Breedon Group plc is a leading construction materials group in
Great Britain and Ireland. It operates two cement plants and an
extensive network of quarries, asphalt plants and ready-mixed
concrete plants, together with slate production, concrete and clay
products manufacturing, contract surfacing and highway maintenance
operations. The Group employs nearly 3,000 people and has nearly
900 million tonnes of mineral reserves and resources. Its strategy
is to continue growing organically and through the acquisition of
businesses in the heavyside construction materials market.
For further information:
Breedon Group plc
Pat Ward, Group Chief Executive
Rob Wood, Group Finance Director 01332 694010
Stephen Jacobs, Group Head of Communications 07831 764592
Cenkos Securities (NOMAD and Joint Broker)
Max Hartley/Harry Hargreaves 020 7397 8900
Numis (Joint Broker)
Ben Stoop/Heraclis Economides 020 7260 1000
Teneo
Matt Denham/ Rachel Miller 020 7420 3180
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END
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