REG - Breedon Group PLC - November Trading Statement

BreedonAnnouncement

21/11/2024 07:00

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RNS Number : 0418N  Breedon Group PLC  21 November 2024

21 November 2024

BREEDON GROUP PLC

 

Resilient performance sustained

Full Year Outlook in-line with expectations

Capital Markets Event: Evolving Breedon 3.0

 

Breedon Group plc ("Breedon" or the "Group"), a leading vertically-integrated
international construction materials group in Great Britain, Ireland and the
United States, provides the following trading update for the ten months to 31
October 2024.

Trading performance

The Group has delivered a resilient performance in the ten months to 31
October 2024 with robust pricing and a focus on operational excellence more
than offsetting the impact of a challenging GB market.

When compared to the same period in 2023, revenue for the first ten months
increased 7% and for the four months to 31 October increased 11%. On a
like-for-like(1) basis revenue decreased 4% in the first ten months and
decreased 1% for the four months to 31 October.

We have continued to invest in our assets, providing further opportunities to
optimise operational performance. We have generated good free cash flow and
are on track to deliver a further reduction in covenant leverage at the year
end, providing us with the financial flexibility to continue to invest for
growth.

Highlights

·      In GB, although market conditions remained challenging overall,
performance has improved since the half year and our Irish business has
continued to perform well. Both businesses have seen encouraging levels of
forward enquiries.

·      The integration of BMC is now well advanced; performance in the
period under our ownership was robust and ahead of plan with pricing remaining
strong.

·      During October BMC completed its first transaction under Breedon
ownership, acquiring a manufacturer of masonry blocks, retaining wall blocks,
pavers, stone, and brick products located in Western Illinois. The business is
highly complementary to BMC and generates revenue of c. US$9.0m per annum.

·      Our Cement business successfully completed the scheduled kiln
shutdown and replacement of the primary crusher at Hope on time and within
budget. Kinnegad has maintained its world leading performance with alternative
fuel substitution consistently in excess of 80%.

·      We made further progress in respect of our sustainability
priorities with our carbon reduction targets now validated by SBTi. Further
information can be found in the separate announcement released today and on
our website (https://www.breedongroup.com/media/news) .

Outlook

The Group has sustained its resilient performance in the year to date and our
expectations for the full year remain unchanged.  We continue to expect to
deliver full year 2024 underlying EBIT in-line with market consensus(2).

Enquiry and tendering levels across all three geographies are healthy as we
look forward to 2025. With interest rates falling and increased political
clarity, the conditions for a housing-led recovery coupled with an ongoing
focus on infrastructure investment are in place, most notably in GB. While
market risks remain, we expect 2024 should represent the floor in construction
materials volumes. In the meantime we will continue to focus on self-help,
executing operational and commercial excellence programmes while pursuing
opportunities in our healthy M&A pipeline.

Rob Wood, Chief Executive Officer, commented:

"These are exciting times at Breedon. We now operate across three geographies,
have built a first-class team, and are on track to deliver a further year of
record revenue and operating profit.

"2024 has not been an easy year, particularly in GB where soft market
conditions have been compounded by poor weather. But we have again proven the
power of our vertical model, whatever the economic, political or environmental
backdrop happens to be.

"Although we have immense faith in our people, our assets and our model, we
are always striving to improve. At our Capital Markets Event today, we are
announcing an evolution of our growth strategy, clarifying our priorities and
refreshing our medium-term targets.

"Since our last Capital Markets Event in 2021 we have made significant
progress. Looking forward we see further opportunities for growth and we look
forward to sharing those plans with you today."

CAPITAL MARKETS EVENT - Evolving Breedon 3.0

Breedon will host a capital markets event for institutional investors and
analysts at the London Stock Exchange from 10:00am to 12.00pm today, followed
by an informal lunch, with registration open from 9:30am. The event will
include presentations from Breedon's senior leadership team addressing the
Group's growth strategy, sustainability, approach to M&A, US market
opportunity and capital allocation.

No further information on current trading will be provided today. Presentation
materials and a recorded webcast of the event will be available on our website
(https://www.breedongroup.com/investors/results-reports-presentations)
following the event.

Notes:

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

2.     Company compiled consensus can be found on the Breedon IR website
Analysts & consensus estimates - Breedon (breedongroup.com)
(https://www.breedongroup.com/investors/analysts-and-consensus-estimates) ;
FY24 consensus mean Underlying EBIT including associates and joint ventures is
£169.4m.

 

 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
 MHP (Public relations adviser)                   +44 (0) 7770 753 544
 Reg Hoare, Rachel Farrington, Charles Hirst      breedon@mhpgroup.com

About Breedon Group plc

Breedon Group plc, a leading vertically-integrated international construction
materials group in Great Britain, Ireland and the United States delivers
essential products to the construction sector. Breedon holds c.1.4bn 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 4,500 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. Breedon shares (BREE) are traded on the Main
Market of the London Stock Exchange and are a constituent of the FTSE 250
index.

 

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