Breedon Aggregates earnings well ahead in first half

Independent aggregates business Breedon Aggregates posted its unaudited interim results for the six months to 30 June on Thursday, with revenue rising 2% over the period to £163m.

Underlying EBIT improved 21% to £22.8m, and profit before tax was ahead 19% at £20.9m.

The AIM-traded firm reported underlying basic earnings per share of 1.5p, up 16% from 1.29p a year ago, with net cash on 30 June at £17.6m, a £75.9m increase on its net debt of £58.3m on 30 June 2015.

“We delivered an excellent operating performance in the first half, with both our businesses making strong contributions, improving revenues and EBIT margins,” said Breedon executive chairman Peter Tom.

"Whatever the prognosis for the UK economy, we remain confident that we can continue to generate value for our shareholders.”

Tom said the company has some major contracts which will help to underpin its performance during a period of uncertainty, along with a strong balance sheet and a record of strong cash generation in challenging markets.

He added that Breedon has also demonstrated its ability to deliver a strong performance through determined self-help, and it will maintain that discipline irrespective of market conditions.

"The strategic rationale of the acquisition of Hope remains compelling and it will present new opportunities to deliver self-help improvements.

“It will also give us an even stronger platform for growth through a broader geographical footprint, increased scale, improved product mix, greater financial capacity and some highly talented people,” Tom said.

He added that the company fully intends to use the strengthened platform to continue to pursue “Indeed, we believe that market uncertainty may create further opportunities for value-creating acquisitions and we are currently considering a number of potential bolt-ons.

"Against this background we remain confident of meeting 2016 market expectations,” Tom confirmed.