30th Nov 2016 08:25
LONDON (Alliance News) - Breedon Group PLC on Wednesday said its revenue for the ten-month period ended October 31 was up 31% year-on-year, and announced a deal to buy Sherburn Minerals Group for up to GBP15.7 million.
The construction materials group said its sales volumes and revenue for the ten-month period were supplemented by a three-month contribution from Hope Construction Materials, the purchase of which completed in August.
Including Hope, Breedon's sales volumes of aggregates grew 25% year-on-year, sales volumes of asphalt grew 1.0% and sales volumes of concrete grew by 96%.
Revenue for the period was up 31% year-on-year to GBP361.0 million and Breedon noted synergies from the Hope acquisition were coming through earlier than previously expected.
Assuming weather conditions remain favourable for the remainder of the year, Breedon said its underlying earnings before interest and tax for 2016 is expected to be ahead of current market expectations.
Breedon noted that the UK economy has "generally held up well" following the Brexit vote and said construction activity has been broadly sustained.
The group welcomed the announcement in the Autumn Statement that the UK government will be increasing spend on national infrastructure and will continue to support housebuilding, both of which should support Breedon in the medium term, it said.
Breedon said it has a number of projects already secured and underway for next year, and said it is confident of making continued progress.
In a separate statement on Wednesday, Breedon said it has entered into a deal to buy heavyside building materials business Sherburn, which operates four quarries, five ready-mixed concrete plants and distributes cementitious products from two import terminals.
Sherburn generated revenue of GBP16.1 million in the year ended March 31 and has 21.0 million tonnes of mineral reserves and resources.
Breedon said the purchase price will be satisfied by the payment of GBP9.5 million in cash, funded from its existing resources, together with the assumption of GBP6.0 million of debt.
A further conditional payment of GBP200,000 is payable one year after completion.
"Following our acquisition of Hope earlier this year, which significantly expanded our geographical footprint in the north of England, Sherburn is a perfect infill acquisition for us," said Breedon Chief Executive Pat Ward.
"It gives us additional mineral reserves and access to new markets for our aggregates and concrete, as well as a first-rate workforce," Ward said.
Shares in Breedon were up 2.9% at 76.50 pence on Wednesday.
By Hannah Boland; [email protected]; @Hannaheboland
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