Trading Update

RNS Number : 4832Q

Breedon Group PLC

30 November 2016

 

30 November 2016                                                                                    

BREEDON GROUP PLC ("Breedon" or "the Group")

Trading Update

Trading performance

Breedon delivered a strong performance in the 10 months to 31 October 2016.  Both volumes and revenues in the former Breedon Aggregates business were ahead of the prior year, supplemented by a three-month contribution from the former Hope Construction Materials business ("Hope").

Including Hope, Group sales volumes of aggregates increased by 25 per cent, asphalt by 1 per cent and concrete by 96 per cent¹.

Total Group revenue for the 10-month period increased by 31 per cent to approximately £361 million.  The integration of Hope is progressing well, with synergies coming through earlier than had previously been expected.

Assuming that weather conditions remain favourable for the remainder of the financial year, the Group's underlying EBIT for the full year is expected to be ahead of current market expectations².

Acquisition of the Sherburn Minerals Group

Furthermore, Breedon has today announced the acquisition of the Sherburn Minerals Group ("Sherburn") for a total consideration of up to £15.7 million, funded from the Group's existing resources.  Sherburn is a heavyside building materials business with operations in the north of England and Scotland, supplying aggregates and ready-mixed concrete, together with cement from two import terminals in Blyth near Newcastle and Dundee in eastern Scotland. 

Further information on this acquisition is provided in the separate announcement released by the Group today.

Outlook

The UK economy has generally held up well following the EU Referendum result in June.  Construction activity has been broadly sustained and, although uncertainty remains about the likely timing and terms of our departure, we remain positive about the outlook for the industry.  We were encouraged by the Chancellor's stated commitment last week to increase investment in our national infrastructure, together with continued support for housebuilding, both of which should have a beneficial impact on our business in the medium term.

We have a number of projects already secured and underway for next year and the continuing integration of Hope, coupled with a full-year contribution from Sherburn, are expected further to enhance our performance.  We therefore remain confident of making continued progress in 2017.

We will announce our preliminary results for the year ending 31 December 2016 on 8 March 2017.

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¹ In accordance with the Cement Market Data Order 2016, cement volumes will not be disclosed.

² The Group believes that current market expectations for underlying EBIT range from £52 million to

   £54 million.

The information contained within this announcement is deemed by the Group to constitute inside information under the Market Abuse Regulations (EU) No. 596/2014.

For further information:

Breedon Group plc
Pat Ward, Group Chief Executive 
Rob Wood, Group Finance Director
01332 694444 

Stephen Jacobs, Head of Communications
07831 764592

Cenkos Securities plc
Max Hartley (Nomad)
020 7397 8925

Peel Hunt (joint broker)
Justin Jones / Mike Bell 020 7418 8900

Note to editors

Breedon Group plc is the UK's largest independent construction materials group.  Following completion of the acquisition of Sherburn, Breedon will operate the country's largest cement plant, two cementitious import terminals, around 60 quarries, 30 asphalt plants, 200 ready-mixed concrete plants and three concrete products plants nationwide.  The Group will employ around 2,300 people and have more than 750 million tonnes of mineral reserves and resources.  Its strategy is to continue growing organically and through acquisition of businesses in the UK heavyside construction materials market.

 

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