Aggregates group Breedon says it gave a robust performance in 2020 despite considerable disruption from COVID-19. While revenue remained stable, profits were down by nearly half for the year.
The Leicestershire, UK-based company’s revenue for the full-year was £928.7m (compared with £929.6m in 2019), underlying EBIT (earnings before interest and taxes) was £76.5m (34% down on the 2019 figure of £116.6m), profit before tax totalled £48.1m (down 49% from £94.6m in 2019), and net debt was £318.3m (£290.3m in 2019).
Breedon Group sold 21.7 million tonnes of aggregates in 2020 (2019: 20.2 million tonnes), 3.3 million tonnes of asphalt (2019: 3.0 million tonnes), 2.6 million cubic metres of ready-mixed concrete (2019: 3.0 million cubic metres), and 2.0 million tonnes of cement (2019: 2.0 million tonnes).
The group also completed the acquisition of a portfolio of UK assets from CEMEX in 2020 for a total of £178m.
Group chief executive Pat Ward announced last October that he would be stepping down after five years in the role, to be replaced by Breedon’s chief financial officer Rob Wood.
Following a strong start to the year, Breedon says the March lockdown effectively brought the UK and Irish construction industries to a halt for the better part of two months. This had immediate and dramatic consequences for industry volumes, which took a number of months to recover as housebuilding and infrastructure activity gradually resumed through the second half of the year.
Breedon says that, while its financial performance was markedly down on the prior year in the first half, it recovered to be comfortably ahead in the second. Volumes from July onwards were generally strong, especially in aggregates and asphalt which benefited from recovering infrastructure investment.
Commenting on the 2020 performance and future prospects for the company, Ward said: “Although we remain mindful of the ongoing impact of COVID-19, with the worst of the pandemic now hopefully behind us and some welcome clarity on Brexit, I believe the prospects for Breedon and for our industry are increasingly positive.
“Against the background of robust commitments from the UK and Irish governments to infrastructure investment and continuing long-term demand for housing, forecasters are expecting this year and next to see steady growth in demand for our products in both countries. During 2020 we proved our ability to deliver a resilient performance against a backdrop of unprecedented disruption. Our track record, coupled with improving market conditions, gives us considerable confidence in the long-term outlook for our company.”
Ward added that 2020 was “very much a year of two halves”. Breedon’s underlying EBIT was significantly impacted in the first six months as a result of the government lockdowns, however Ward said it recovered strongly in the second half to reach the £76.5m total for 2020.
He added that the company is in a fortunate position going forward: “We are a major player in an industry which governments of all persuasions view as essential and in which they are prepared to invest. In the wake of the CEMEX acquisition we are even better placed to benefit from this positive trend.”
