26th Nov 2013 12:17
LONDON (Alliance News) - Breedon Aggregates Ltd Tuesday said it expects pretax profit to be "somewhat" ahead of market expectations in the full year, driven by a general improvement in construction demand, cost control and careful selection of work, as long as weather conditions remain favourable for the rest of the period.
In a trading update, the company said its trading performance had been "very encouraging", with sales volumes of aggregates, ready-mixed concrete and asphalt all ahead year-on-year in both England and Scotland.
"Group sales revenue in the second half of the year has been stronger than in the first half and the full-year (earnings before interest, tax, depreciation and amortisation) margin is expected to be ahead of the prior year, driven by continuing improvement in the underlying business and the benefit of acquisitions," it said in a statement.
The company said it was being helped by recent acquisitions: Aggregate Industries' operations in Northern Scotland and Marshalls' quarries in England.
It said an investigation into the Aggregate Industries acquisition by the Competition Commission is continuing, with talks about potential remedies set to start in January. Breedon currently thinks there are only minor issues in one product area which might require it to dispose of a limited number of individual assets. It didn't give any further details.
It said it is also optimistic of making further progress in 2014, citing forecasts from the Mineral Products Association for 2% to 4% growth in aggregates volumes, 3% to 5% growth in ready-mixed concrete and 2% to 4% growth in asphalt - a more positive outlook than for a number of years. The Construction Products Association is also forecasting a return to growth in UK construction output in 2014, it added.
Breedon also said that Finance Director Ian Peters intends to step down to pursue other interests. He'll be replaced by Rob Wood, who currently works as financial controller of Drax Group PLC, from March.
Breedon Aggregates shares were up 3.2% at 35.85 pence Tuesday morning, not far from the all-time high of 36.50 pence hit October 24.
By Steve McGrath; [email protected]; @stevemcgrath1
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