3rd Mar 2015 10:41
LONDON (Alliance News) - Breedon Aggregates Ltd Tuesday said its pretax profit almost doubled in 2014, as it sold more aggregates, asphalt and ready-mixed concrete, and it said it was confident of further progress in 2015.
The company reported a pretax profit of GBP21.4 million in 2014, up from GBP11.0 million in 2013, as revenue rose 20% to GBP269.7 million from GBP224.5 million, its operating margin improved and it booked a much bigger gain on property disposals.
Its closely-watched earnings before interest, tax, depreciation and amortisation excluding acquisition and restructuring costs and property items rose by more than a third to GBP38.5 million, from GBP28.3 million, as its underlying Ebitda margin rose 1.7 percentage points to 14.3%, close to its medium-term target of 15%.
It said it sold 7.7 million tonnes of aggregates, up from 6.1 million tonnes in 2013, 1.5 million tonnes of asphalt, up from 1.4 million, and 0.8 million cubic metres of ready-mixed concrete, up from 0.6 million cubic metres.
"Market conditions in England were strong, with good demand from housing, commercial, industrial and agricultural customers. Scotland was more subdued, undoubtedly affected by the independence vote in September, and there seems to be less visibility on government spending plans than there is south of the border," it said.
Breedon spent GBP33.4 million on acquisitions in 2014, GBP3.5 million on an investment and GBP11.9 million on other capital projects. It will continue spending in 2015 on capacity increases, improving efficiency and further development, notably on a plan to replace, improve or upgrade a number of asphalt and concrete plants. It also intends to make more acquisitions.
"This expenditure represents an investment in the future and will generate additional revenues, reduce costs and improve productivity in the years ahead," it said.
"The economic outlook is the most favourable for our industry since the end of the recession. Construction output and demand for our products are expected to increase over the next three years and infrastructure in particular is expected to grow strongly in 2015-18 on the back of recently-announced public spending plans. We continue to see many opportunities to grow and improve our business and we are confident that we will make further progress in 2015," Chairman Peter Tom said.
It said the lower oil price should continue to help its cost base and help accelerate the recovery of margins in the industry, "which still remain below pre-recession levels and in some cases below the cost of capital".
Breedon Aggregates shares were up 1.1% at 48.90 pence Tuesday morning, a near one-month high for the stock.
It isn't currently paying a dividend, instead focusing on delivering capital growth for its shareholders.
By Steve McGrath; [email protected]; @stevemcgrath1
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