REG - Breedon Group PLC - November trading statement

BreedonAnnouncement

25/11/2022 07:00

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RNS Number : 5665H  Breedon Group PLC  25 November 2022

25 November 2022

 

BREEDON GROUP PLC

 

On track to deliver record earnings

Trading in line with expectations

 

Breedon Group plc ("Breedon" or the "Group"), a leading vertically-integrated
construction materials group in Great Britain and Ireland, reports on its
performance for the 10 months to 31 October 2022.

 

Trading performance

 

Trading conditions during the second half remained supportive, enabling the
Group to fully recover rising input costs through robust pricing and
disciplined cost management. In the four months to October 2022, the Group
delivered revenue growth of 16% compared to the same period in 2021. This
resulted in Group revenue of £1,186m in the year to date, some 14% ahead of
the equivalent reported period last year and 12% on a like-for-like(1) basis.

 

Successful implementation of our dynamic pricing strategy has offset the
impact of softer market volumes. While our volumes are behind the exceptional
levels recorded during the post-Covid recovery in 2021, they remain ahead of
2019 on a like-for-like(1) basis.

 

The Group continued to generate strong free cash flow and is on track to
deliver year-end covenant leverage comfortably below 1x.

 

Highlights

 

 •    In GB, as well as delivering a strong operational performance, we advanced the
      business strategically. In surfacing, we were delighted to be awarded a place
      on the National Highways Pavement Delivery Framework, North Super Region and
      we acquired Thomas Bow, an East Midlands surfacing business. In materials we
      are in the process of commissioning our new Mansfield asphalt plant and we
      expanded our capability to include marine sand dredging through the
      acquisition of Severn Sands.
 •    In Ireland, activity in RoI accelerated in line with normal seasonal trends.
      The pace of activity in Northern Ireland continues to be impacted by the
      absence of the governing Assembly; nonetheless, we were pleased to be awarded
      a number of framework contracts.
 •    The Cement business performed well and at our Hope plant we completed the
      scheduled maintenance of the second kiln, on time and to budget.
 •    We have made further progress on our sustainability ambitions. Achieving our
      highest ever rates of alternative fuels substitution and biomass usage
      together with expanding the production of reduced clinker cement; all
      contributing to further reductions in our carbon intensity.

 

Outlook

 

The Group is on track to deliver record earnings in 2022. While construction
output has softened in the second half, the majority of our end-markets remain
resilient, with infrastructure and industrial markets continuing to deliver
growth. Consequently, we expect to deliver full year results in line with
expectations as set out with our interim results.

 

While the short-term economic outlook limits visibility for the sector, our
longer-term prospects remain well-underpinned by structural growth dynamics,
and our exposure to infrastructure, housing and industrial end-markets is
favourable. Independent of market conditions, there are many opportunities for
progression within our control; optimising our assets, executing our active
M&A pipeline in GB and Ireland and continuing to recover input cost
inflation through our dynamic pricing strategy.

 

Rob Wood, Chief Executive officer, commented:

"This time last year we reminded our investors of the agile and
entrepreneurial DNA that sets Breedon apart. Our rapid response to changing
market conditions, local focus, vertically-integrated business model and
disciplined financial framework will again enable us to deliver record
results.

 

"Visibility in the trading landscape has been poor for some years now, for a
variety of reasons. Against this constantly changing backdrop, our team's
commitment and resolve have delivered quality products and great service to
our customers, regardless of the economic or political landscape. For this, we
thank them. Their focus and determination in turn continues to deliver for all
our stakeholders."

 

 

Notes

1.   Like-for-like reflects reported values adjusted for the impact of
acquisitions and disposals.

 

 ENQUIRIES
 Breedon Group plc                                +44 (0) 1332 694010
 Rob Wood, Chief Executive Officer

 James Brotherton, Chief Financial Officer
 Louise Turner-Smith, Head of Investor Relations  +44 (0) 7860 911909
 Numis (NOMAD and joint broker)                   +44 (0) 20 7260 1000
 Ben Stoop

 Oliver Hardy (NOMAD)
 HSBC (Joint broker)                              +44 (0) 20 7991 8888
 Sam McLennan

 Joe Weaving
 Teneo (Public relations adviser)                 +44 (0) 20 7420 3180
 Nick de Bunsen

 Elizabeth Mobed

 

About Breedon Group plc

Breedon Group plc, a leading vertically-integrated construction materials
group in Great Britain and Ireland, delivers essential products to the
construction sector. Breedon holds around 1bn tonnes of mineral reserves and
resources with long reserve life, supplying value-added products and services,
including specialty materials, surfacing and highway maintenance operations,
to a broad range of customers through its extensive local network of quarries,
ready-mixed concrete and asphalt plants.

 

The Group's two well-invested cement plants are actively engaged in a number
of carbon reduction practices, which include utilising alternative raw
materials and lower carbon fuels. Breedon's c.3,600 colleagues embody our
commitment to 'Make a Material Difference' as the Group continues to execute
its strategy to create sustainable value for all stakeholders, delivering
growth through organic improvement and acquisition in the heavyside
construction materials market.

 

 

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