Breedon recovers cost increases in solid first quarter

Breedon Group said in a trading update on Thursday that it started the year “well”, with order intake and volumes following usual seasonal patterns through the first three months of 2022.

The AIM-traded building materials supplier, which was holding its annual general meeting later in the day, said its end markets remained “supportive”, leading to reported and like-for-like revenue growth of 16% over the first quarter of 2021.

It said acceptance of rising input costs, and an “increasingly dynamic” price environment across all major product groups, enabled full cost recovery through the quarter, which the board said was “encouraging”.

Breedon also confirmed that its 37.5%-owned associate BEAR Scotland retained responsibility for Scotland's north west trunk roads for at least another eight years, maintaining supply relationships and long term visibility for its Scottish surfacing business.

“We recognise that international events have increased macroeconomic uncertainty,” said chief executive officer Rob Wood.

“Nonetheless, we are encouraged that our end markets, particularly infrastructure and housing, remain supportive and we have successfully recovered input cost inflation in the first quarter through dynamic pricing.”

Wood said the business offered a “natural hedge” against inflation, with the board confident in the resilience of its local operational model.

“Normal seasonal patterns of activity are evident with orders and enquiries increasing throughout the quarter and we continue to trade in line with management expectations.”

Breedon said it would announce its interim results for the six months ending 30 June on 27 July.

At 0925 BST, shares in Breedon Group were up 0.38% at 80.3p.