Breedon reports positive post-COVID trading performance

Breedon says it has continued to deliver an encouraging trading performance since demand began to return in early May after the COVID-19 lockdown.
Concrete Plants, Equipment & Applications / September 18, 2020
By Liam McLoughlin
Breedon says there is encouraging demand in the UK and Irish housing markets
Breedon says there is encouraging demand in the UK and Irish housing markets

In a trading update the UK-based construction materials provider added that the improving trend it reported for June and July at the time of its interim results continued into August.

The group delivered revenues for the first eight months of the year of £531m (2019: £624m), including a one-month contribution from its recently-acquired CEMEX assets in the UK.

After reviewing the latest management forecasts Breedon's board said that it is in a position to reinstate guidance for the 2020 financial year. Accordingly, it currently anticipates delivering second-half underlying EBIT (earnings before interest and taxes) broadly in line with the second half of 2019, which would deliver a result in excess of the average of current full-year market expectations.

Breedon predicts that the average of current full-year market expectations for its underlying EBIT is £57m, with a range of £49m to £70m.

The company said in a statement: "We continue to be reassured by the Government's restated commitment to investment in the UK's infrastructure and by encouraging demand from the UK housing market, complemented by similar trends in the Republic of Ireland.

"As a provider of an essential service, we have proved our ability to deliver a resilient performance despite unprecedented disruption, which gives us considerable confidence in the long-term outlook for our business."

Breedon plans to issue its customary trading update for the first 10 months of the year on 18 November and to announce its preliminary results for the year ended 31 December 2020 on 10 March 2021.

The Breedon group operates two cement plants and an extensive network of quarries, asphalt plants and ready-mixed concrete plants, together with slate production, concrete and clay products manufacturing, contract surfacing and highway maintenance operations. Following the acquisition of a portfolio of CEMEX's UK assets (subject to implementation of the remedies required by the CMA), the group employs over 3,500 people and has around 1 billion tonnes of mineral reserves and resources.

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