I have posted several fragmentary pieces about this company and hope to find time to do a more comprehensive write up in the near future. Until then my apologies for the fragmentary nature of related posts.
Summary
Breedon sells bulk materials to the construction industry. It has grown from a market cap of 2 million to a market cap of 800 million in a short time. It is a growing business with a small market share in a growing market, so there is lots of head room. Its strategy includes organic growth plus consolidation of smaller players. Every one of its past acquisitions has delivered more than was expected/identified at the time of acquisition. It is currently waiting on regulatory approval for its biggest acquisition to date - Hope - and that should come through within the next fewmonths. There is a pipeline of further acquisitions in the offing. Margins have been raised from 9 to 12% in the past year and are expected to reach 15% in a few years.
There are a number of obvious risks (market downturn etc )and I'll go into them when I do a fuller write up.
Reason for this post
BREEDON AGGREGATES (BREE) have posted onto their website a copy of the slides used in a presentation to analysts on March 9 – see Breedon slides ,
together with an audio recording of the presentation and the subsequent Q&A session – see Breedon Audio
The audio is 55 minutes long and in combination with the slides it covers a lot of material. I listened to it at 3am the other day when I was suffering from insomnia during a recent illness. Can’t guarantee I did not nod off and miss things, but did my best to take notes of the points that stood out and thought I'd share.
Here are my notes in bullet point format.
Note 1: market cap is 800 million
Note 2: Breedon’s market share is 5-8% of the UK total market depending on product range
Conference call
P Tom chairman
• v pleased with past year
• record results in terns of revenue, profit, margin
• margins increased by 3% to 12%
• well on target to reach 15% margin by 2020
• useful review of highlights
• acquisition of Hope was stand out event (acquisition has been agreed but is currently under review…
