Breedon Group plc, announces its unaudited interim results for the six months ended 30 June 2017.

Interim results (unaudited) for the six months to 30 June 2017

Breedon Group plc, the UK’s largest independent construction materials group, announces its unaudited interim results for the six months ended 30 June 2017.

30 June 2017                                         30 June 2016                             Change
Revenue £326.3 million                             £163.0 million                             +100%
Underlying EBIT† £35.8 million                 £22.8 million                               +57%
Profit before tax £31.2 million                    £20.9 million                               +50%
Underlying basic EPS† 1.84 pence               1.50 pence                              +23%
Net debt/(cash) £146.8 million                   £(17.6) million

† Underlying results are stated before acquisition-related expenses, redundancy and reorganisation costs, property items, amortisation of acquisition intangibles and related tax items. References to an underlying profit measure throughout this announcement are defined on this basis.

7.9 million tonnes of aggregates sold (30 June 2016: 4.6 million tonnes)
0.9 million tonnes of asphalt sold (30 June 2016: 0.9 million tonnes)
1.7 million cubic metres of ready-mixed concrete sold (30 June 2016: 0.5 million cubic metres)

Highlights

• Strong profit improvement from former Breedon Aggregates business and robust contribution from former Hope Construction Materials (“Hope”)
• Underlying EBIT margin of 15.8% achieved in former Breedon Aggregates business, comfortably ahead of our 2020 target of 15%
• Further progress on safety improvement: Lost Time Injury Frequency Rate reduced from 1.87 in 2016 to 1.41 at half-year
• Net debt reduced to £146.8m (Dec 2016: £159.3m)
• Both cement kiln maintenance and upgrade shutdowns completed in first half, on time and to budget
• Integration of former Hope operations completed, with planned synergies expected to be fully delivered in 2018, ahead of schedule
• Pro Mini Mix acquired; further bolt-on acquisitions in pipeline
• Organic development underway in two new quarries in Scotland and County Durham
• Remain confident that we will meet 2017 market expectations

Peter Tom CBE, Executive Chairman, commented:

“I am pleased to report that in the first half of 2017 the former Breedon Aggregates business posted a strong profit improvement and the former Hope Construction Materials business made a robust contribution, even after taking into account the shutdowns of both our cement kilns for planned annual maintenance and upgrade during the first half, which were completed on time and to budget."

“Although the outcome of the General Election, coupled with the commencement of Brexit negotiations, have created some further uncertainty for the UK economy, the outlook for UK construction remains encouraging. It is reassuring that the Government’s direction of travel appears to be moving away from continued austerity towards fiscal stimulus, which can only be helpful to our industry."

“We have consistently demonstrated our ability to generate value for our shareholders irrespective of economic conditions, through flexible and imaginative customer service, rigorous cost control, focused investment and a culture of continuous operational improvement. These disciplines, coupled with a strong balance sheet and healthy cashflow, put us in a strong position to take advantage of future growth opportunities, both organically and through further bolt-on acquisitions."

“More immediately, our performance in the first six months and our prospects for the second half give us confidence that we will meet 2017 market expectations.”