Breedon Group plc has reported a robust trading performance for the ten months leading up to 31 October 2023.
This achievement is attributed to the company’s resilient business model and dedicated team, which have successfully navigated the challenges of moderating volumes through effective pricing and operational strategies.
Steady Growth Amidst Challenging Conditions
Despite the fluctuations in market conditions, Breedon has demonstrated considerable growth. Compared to the same period in 2022, the Group’s revenue for the first ten months saw an 8% increase, and a 4% increase in the four months to 31 October. On a like-for-like basis, revenue grew by 5% in the first ten months and 1% in the latter four months.
Adapting to Regulatory Changes
The recent changes to building regulations in the UK, effective from June 2023, have impacted the volumes of ready-mixed concrete. Despite a moderation in aggregate and asphalt volumes, Breedon has managed to sustain pricing and maintain control over costs. This strategic approach has enabled the Group to continue generating robust free cash flow and is set to achieve a further reduction in covenant leverage at the year-end.
Operational Highlights and Market Dynamics
In GB, Breedon remained focused on self-help actions, implementing an operational excellence programme in response to a softening market. The Group has successfully completed several aviation projects and maintained a strong presence in National Highways work.
In Ireland, market dynamics remained steady. In ROI, long-term growth drivers and healthy budgets support tendering processes, while in NI, the pipeline was affected by the lack of a governing assembly. The integration of Robinson Quarry Masters, acquired in the first half of the year, is progressing as planned.
Cement Business and Sustainability Efforts
Breedon’s Cement business in both GB and Ireland maintained strong performance. The Hope plant completed its second scheduled kiln shutdown within budget and on schedule, while the Kinnegad Cement plant excelled with over 80% alternative fuel substitution. Breedon’s commitment to sustainability is evident in the traction gained by its Breedon Balance range of products and efforts to reduce the clinker content of its cement. The 2023 colleague engagement survey also showed positive trends in participation and engagement.
Rob Wood, Chief Executive Officer, said: “Notwithstanding the market backdrop, the Breedon team continues to deliver and we are delighted to report a trading performance ahead of expectations. Against the uncertain political and economic backdrop, our teams have adapted well to deliver a compelling performance, whatever the prevailing market conditions.
“Our strategic focus on ensuring Breedon is a great place to work, taking care of our people and the communities around our sites, has once again been reflected in both our financial performance as well as our colleague engagement, of which I am particularly proud. But we never settle – we will continue to seek ways to operate as efficiently and sustainably as possible, invest in our people and grow our business so we are positioned to succeed when the construction materials market returns to growth.”