Breedon posts 8% growth YoY in 10M23

Breedon Group has reported eight per cent growth in revenue YoY in the first 10 months of 2023, driven by robust pricing and operational excellence, that more than offset the effect of moderating volumes. According to the company, changes to building regulations in the UK that came in in June, impacted ready-mixed concrete (RMC) volumes, while aggregate and asphalt volumes have continued to moderate.

“However, pricing has been sustained and we have maintained tight control over our cost base,” Breedon said in the statement. “We continue to generate good free cash flow and are on track to deliver a further reduction in covenant leverage at the year end, providing financial flexibility to continue to invest for growth.” 

The company’s cement business maintained a robust performance in Great Britain and Ireland. The Hope plant completed its second scheduled kiln shutdown on time and on budget, while the Kinnegad cement works maintained its world leading performance with alternative fuel substitution in excess of 80 per cent. Breedon also continued to make progress in respect of its sustainability priorities with its Breedon Balance range of products gaining traction and a continued focus on reducing the clinker content of its cement. 

In Ireland, market dynamics were unchanged with tendering in the Republic of Ireland underpinned by long-term structural growth drivers and healthy budgets, while the pipeline in Northern Ireland was impacted by the ongoing lack of a governing assembly. The integration of Robinson Quarry Masters, which completed in the first half of 2023, continues to progress according to plan.

Looking ahead, the company says that, due to the macroeconomic landscape, visibility in the construction materials sector remains limited in the short-term, particularly in Great Britain, offset by long-term structural growth drivers in infrastructure and housebuilding. Consequently, the group continues to focus on self-help, executing operational and commercial excellence programmes while pursuing opportunities in its M&A pipeline.

Breedon expects full-year 2023 underlying EBIT to come in ahead of market consensus, on the back of its strong performance in the year to date.