Breedon ‘encouraged’ by trading performance

Construction materials group Breedon has said the improving trends reported in its September trading update have continued into the fourth quarter, with group revenues in both September and October ahead of the same period in the prior year, on a like-for-like basis.

Breedon 'encouraged' by trading performance

As a result, the group delivered revenues for the first ten months of the year of £750 million (2019: £800m), including three months contribution from the former CEMEX assets in the UK.

In the trading update, Breedon noted: “We welcome the various commitments made by UK and Irish governments to maintaining activity in the construction sector. We continue to operate our sites with a focus on the health and safety of all our colleagues, and expect limited impact from recently announced restrictions. As a result, the board now expects the group’s Underlying EBIT for the full year to beat least £70m, which is ahead of current market expectations.

“The combination of continued positive trading and our focus on cost control and prudent cash management, as well as the recently announced agreement to dispose of certain assets to Tillicoultry Quarries Limited (subject to final clearance by the CMA), means that we currently expect net debt to be below £400m at the year end.”

Looking ahead, Breedon said the ongoing COVID-19 pandemic and Brexit negotiations create continued economic uncertainty and result in limited visibility on trading conditions going into next year.

The firm added: “Nevertheless, with forecasters expecting a further recovery in construction activity in GB and Ireland in 2021 and the UK and Irish governments making significant commitments to infrastructure spending, the outlook for our markets remains encouraging. The group will also benefit from the integration of the former CEMEX UK assets into its existing operations, along with initiatives to improve performance, anticipated to begin by the end of this year.

“During 2020 we have proved our ability to deliver a resilient performance against a backdrop of unprecedented disruption, which gives us considerable confidence in the long-term outlook for our business.”

Breedon plans to announce its preliminary results for the year ended 31 December 2020 on 10 March 2021.

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