5th Mar 2025 09:16
(Alliance News) - Breedon Group PLC on Wednesday delivered annual earnings ahead of consensus and announced an acquisition which it said will more than double its US revenue.
In response, shares in Leicestershire, England-based construction materials company soared 13% to 483.22 pence each on Wednesday morning.
Pretax profit fell 6.7% to GBP125.4 million in 2024 from GBP134.4 million a year prior, despite revenue rising 6.0% to GBP1.58 billion from GBP1.49 billion.
Earnings before interest and tax rose 2.7% to GBP149.6 million from GBP145.7 million, 2% ahead of company compiled consensus.
Underlying adjusted earnings per share of 34.4p was up 1.2% from 34.0p a year prior, and 4% ahead of company-compiled consensus.
The total dividend was increased 7.4% to 14.5p per share from 13.5p a year ago.
Revenue growth was driven by the entry into the US with the first bolt-on deal completed in October.
Revenue in Great Britain fell 4% amid "challenging" market conditions, which stabilised in the second half, while Ireland delivered a strong performance.
Breedon said enquiry levels were "healthy" towards the end of 2024 and have remained encouraging in the first two months of 2025.
"The economic landscape in the US is robust while return on investment is strong, benefiting from a budget surplus and net inward migration," Breedon said.
In the UK, the company is "optimistic" that 2024 should represent a floor in construction market activity, although the broader economic outlook is less clear.
Reflecting its US optimism, Breedon announced the USD238 million acquisition of Lionmark Construction Companies LLC.
Lionmark is a Missouri-headquartered construction materials and surfacing solutions business with a focus on road infrastructure end markets.
Breedon said the deal is expected to more than double its US revenue and is likely to provide "immediate and attractive financial returns while maintaining a strong and flexible balance sheet".
It expects the deal, which should complete on Friday, to be immediately earnings enhancing.
Synergies of not less than USD3 million per annum are expected to be fully delivered by the third year of ownership.
The transaction will be financed through USD226 million in cash, funded through a drawdown on the existing revolving credit facility and through USD12 million payable in Breedon shares.
Andy Arnold, managing director, Breedon US, said the acquisition represents a "significant milestone" in the development of its US business.
"Lionmark is extremely complementary to our existing operations, diversifying BMC's product to supply asphalt and surfacing solutions into an attractive market which is well-positioned for future growth," he added.
By Jeremy Cutler, Alliance News reporter
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