Breedon Aggregates hails ‘another year of significant progress’

breedonPre tax profits at Breedon Aggregates almost doubled in 2014 and it said it was confident of further progress in 2015.

Steadily improving market conditions, the benefits of its investment programme and a healthy contribution from acquisitions saw revenues and profits advance strongly.

The company reported a pre tax profit of £21.4 million in 2014, up from £11m in 2013, as revenue rose 20 per cent to £269.7m from £224.5m, its operating margin improved and it booked a much bigger gain on property disposals.

Underlying earnings (EBITDA) shot up 36.2 per cent to £38.5m from £28.3m.

The group sold 7.7m tonnes of aggregates, up from 6.1m tonnes in 2013, while it shifted 1.5m tonnes of asphalt (2013: 1.4m tonnes) and 0.8m cubic metres of ready-mixed concrete (0.6m cubic metres).

The firm said: “Market conditions in England were strong, with good demand from housing, commercial, industrial and agricultural customers. Scotland was more subdued, undoubtedly affected by the independence vote in September, and there seems to be less visibility on government spending plans than there is south of the border.”

Breedon spent £33.4m on acquisitions in 2014, £3.5m on an investment and £11.9mn on other capital projects. It will continue spending in 2015 on capacity increases, improving efficiency and further development, notably on a plan to replace, improve or upgrade a number of asphalt and concrete plants. It also intends to make more acquisitions.

“This expenditure represents an investment in the future and will generate additional revenues, reduce costs and improve productivity in the years ahead,” it said.

Peter Tom, Breedon’s executive chairman, said the economic outlook is “the most favourable for our industry since the end of the recession”.

He said: “We are pleased to report another year of significant progress, with results strongly ahead of 2013. These were driven by steadily improving market conditions, healthy contributions from acquisitions, the benefits of continuing capital investment and solid organic growth in the underlying business.

“As we enter our fifth year since the creation of Breedon Aggregates, the Group looks very different to the business we acquired in 2010. Sales revenue has nearly doubled, EBITDA has risen almost threefold, the balance sheet is strong and we have a stable, experienced management team in place.”

Pete added: “Construction output and demand for our products are expected to increase over the next three years and infrastructure in particular is expected to grow strongly in 2015-18 on the back of recently-announced public spending plans. We continue to see many opportunities to grow and improve our business and we are confident that we will make further progress in 2015.”

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