6th Mar 2024 12:53
(Alliance News) - Breedon Group PLC on Wednesday raised its annual dividend by nearly 30% and announced a USD300 million acquisition, as it reported higher revenue in 2023 and mostly steady profit.
The Derby, England-based construction materials firm said pretax profit edged down to GBP134.4 million last year from GBP135.8 million in 2022. Revenue rose 6.5% to GBP1.49 billion from GBP1.40 billion, but rising costs meant that the operating earnings margin narrowed to 9.8% from 10.6%.
Earnings before interest and tax declined to GBP145.7 million from GBP148.0 million, beating market expectations, Breedon said.
The company declared a final dividend of 9.5 pence, up 36% from 7.0p a year before. This increased the full-year payout by 29% to 13.5p from 10.5p.
Looking ahead, Breedon said it expects to continue to pay out 40% of underlying basic earnings per share. Since starting to pay dividends in 2021, Breedon has paid out a total of GBP110 million to shareholders, it noted.
Breedon also deployed its cash toward acquisitions. On Wednesday, it said it has purchased BMC Enterprises Inc for an enterprise value of USD300 million.
St Louis, Missouri-based BMC is a supplier of ready-mixed concrete, aggregates and building products. It had adjusted earnings of USD35.5 million in financial year 2023 on revenue of USD178.9 million.
Breedon will pay USD285 million in cash, plus USD15 million in Breedon shares for BMC, with completion of the deal expected by Thursday.
"The acquisition of BMC represents a compelling opportunity for Breedon to launch our third platform in the USA," Breedon Chief Executive Officer Rob Wood said. "BMC has an excellent performance track record over a sustained period and is positioned in an attractive market for future growth."
Breedon shares were up 5.8% at 401.89 pence in London midday Wednesday.
By Tom Waite, Alliance News editor
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