Breedon turns in 'robust' performance for 2020

Breedon described a “robust performance” in its annual results for 2020 on Wednesday, as its revenue was broadly flat at £928.7m, compared to £929.6m in the prior year.

The AIM-traded construction materials company said its underlying EBIT fell 34% in the year ended 31 December to £76.5m, against the backdrop of “considerable disruption” caused by the Covid-19 pandemic.

Its profit before tax was 49% weaker at £48.1m, while underlying basic earnings per share were down 45% on 2019 at 2.8p.

The firm said its net debt at year-end stood at £318.3m, widening from £290.3m at the end of 2019.

Breedon said it sold 21.7 million tonnes of aggregates in the year, rising from 20.2 million tonnes a year earlier, as asphalt sales improved to 3.3 million tonnes from three million tonnes.

Ready-mixed concrete sales totalled 2.6 million cubic metres, falling from three million cubic metres in 2019, as two million tonnes of cement was sold, in line with the prior year.

The board said the company experienced a “strong” recovery in the second half, with like-for-like revenue and underlying EBIT ahead of the prior year.

During the year, it also progressed its sustainability agenda, appointing its first group head of sustainability and developing a “clear roadmap” for the firm.

The acquisition of Cemex completed on 31 July, with the company reporting on Wednesday that its integration was on track.

Breedon said its leverage stood at 2.1x at year-end, due to strong second half trading and free cash flow generation, with the board adding that it was intending to pay a maiden dividend during 2021.

“Although we remain mindful of the ongoing impact of Covid-19, with the worst of the pandemic now hopefully behind us and some welcome clarity on Brexit, I believe the prospects for Breedon and for our industry are increasingly positive,” said group chief executive officer Pat Ward.

“With robust commitments from the UK and Irish governments to infrastructure investment and continuing long-term demand for housing, forecasters are expecting this year and next to see steady growth in demand for our products in both countries.”

Ward said that during 2020, the company proved its ability to deliver a resilient performance against a backdrop of unprecedented disruption.

“Our track record, coupled with improving market conditions, gives us considerable confidence in the long-term outlook for our company.”

At 0944 GMT, shares in Breedon Group were down 1.41% at 90.31p.