Breedon says underlying outlook remains positive

AIM-listed construction materials group Breedon, which recently completed the acquisition of Belfast-based Lagan Group, said on Tuesday that the underlying outlook remains positive.

In a statement to be delivered at the annual general meeting later in the day, chairman Peter Tom said the group is now in the early stages of integrating Lagan, which is its largest acquisition to date.

He expects to update the market on the company's progress at the interim results in September, by which times he also expects to have completed the planned acquisition of four quarries and an asphalt plant from Tarmac, in exchange for a number of ITS ready-mixed concrete plants and a cash payment.

"Although forecasters are expecting this year to be challenging for our industry, the underlying outlook remains positive. Construction output is forecast to grow by 4.8% in the UK and by 28% in the Republic of Ireland over the next three years. Growth is expected to be driven primarily by housing and infrastructure, which together account for the majority of our end-use markets," Tom said.

He reiterated comments from the company's announcement on 17 April regarding its acquisition of Lagan.

"In common with the rest of our industry, we have experienced disruption from the severe weather in the first quarter which has impacted the phasing of some of our work. However, with the worst of the weather behind us, we have seen an improvement in recent weeks and anticipate a continuing recovery in activity. The board's expectation for the full year remains unchanged."

At 1110 BST, the shares were down 1% to 83.25p.