5th Sep 2018 09:11
LONDON (Alliance News) - Breedon Group PLC on Wednesday reported a dip in its profit for the first half of the year, as administrative expenses rose on the back of new acquisitions.
For the six months to June 30, the construction materials manufacturer posted pretax profit of GBP30.4 million, down 3% year-on-year from GBP31.2 million. On an adjusted basis, before acquisition, redundancy and reorganisation costs, pretax profit was GBP37.4 million, a 15% increase of the year before.
Meanwhile, revenue grew by 16% to GBP378.4 million from GBP326.3 million a year prior.
In the period, Breedon completed four new acquisitions which increased administrative costs by 37% to GBP34.3 million from GBP25.0 million.
"This was one of the busiest periods in the group's history, with four acquisitions completed by July 1 including our first outside the UK, coupled with continued organic investment in a number of key projects," Chairman Peter Tom said.
He continued: "We had anticipated a challenging 2018 and so it proved in the first half, with testing trading conditions exacerbated by the severe weather in the first quarter and rising input costs throughout the period. Despite these headwinds, we delivered a resilient performance."
The company sold an aggregate of 9.3 million tons of material, up from 7.9 million a year ago, of which 1.2 million was asphalt. Sales of ready-mixed concrete decreased slightly to 1.6 million cubic metres from 1.7 million.
Looking ahead, Breedon said it remains confident in meeting market expectations as a positive outlook in Ireland continues to offset the short-term challenges encountered in the UK market.
In a separate announcement, Breedon said it appointed Peter Cornell as independent non-executive director with effect from the start of October. Cornell is currently chairman of Grant Thornton LLP and Lexington Consultants Ltd. He also holds the role of non-executive director at Schroders Ltd and F&C Commercial Property Holdings Ltd.
The company added that it expects to appoint a further non-executive director by the end of 2018.
Breedon shares were trading 0.3% higher at 78.80 pence each.
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