Breedon on track for record FY earnings

Construction materials group Breedon said on Friday that it was on track for record full-year earnings after trading conditions in the second half remained "supportive", enabling it to fully recover rising input costs through "robust pricing" and "disciplined cost management".

In the four months to October, Breedon delivered revenue growth of 16% year-on-year, resulting in revenues of £1.18bn year-to-date, roughly 14% ahead of the same period twelve months earlier and 12% on a like-for-like basis.

Breedon stated that the "successful implementation" of its dynamic pricing strategy had offset the impact of softer market volumes and said that while volumes were behind "the exceptional levels" recorded during its post-Covid recovery in 2021, they were still ahead of 2019 levels on a like-for-like basis.

The AIM-listed firm also noted that it was on track to deliver "record earnings in 2022", despite seeing construction output soften in the second half, as the majority of its end markets remained "resilient".

"While the short-term economic outlook limits visibility for the sector, our longer-term prospects remain well-underpinned by structural growth dynamics, and our exposure to infrastructure, housing, and industrial end-markets is favourable," said Breedon.

"Independent of market conditions, there are many opportunities for progression within our control; optimising our assets, executing our active M&A pipeline in GB and Ireland, and continuing to recover input cost inflation through our dynamic pricing strategy."

As of 0830 GMT, Breedon shares were up 2.10% at 58.40p.

Reporting by Iain Gilbert at Sharecast.com