LONDON (ShareCast) - AIM-listed Breedon Aggregates has blasted back from a rocky start to lift profits by two thirds in the first half of the year.

Pre-tax profits were lifted 69% to £6.6m thanks to cost control and better productivity, with revenues rising 21% to £100.2m thanks in part to two months' contribution from two new acquisitions.

Executive Chairman Peter Tom added to the bullish feeling: "The general outlook for construction in the UK looks more positive than it did at this time last year. The decline in construction output appears to be levelling out and there is no doubt that a sustained recovery in the housing market is already underway.”

In April the AIM 100 company raised £61m from investors to fund its shopping, buying Aggregate Industries' operations in northern Scotland and Marshalls' construction aggregates business in England.

The transactions added 10 active quarries, four asphalt plants, seven ready-mixed concrete plants and two concrete block plants to its operations, together with lifting total mineral reserves and resources to nearly 400m tonnes, or enough to last 76 years at current production rates.

Excluding the acquisitions, revenue was still ahead 13 per cent, with earnings before acquisitions, interest, tax, depreciation and amortisation (EBITDA) up 18%.

Poor weather in the first quarter, where aggregates producers were hit hard, was followed by much stronger levels of activity, which are expected to improve further in the second half.

The company said the performance of the UK construction sector remained “lacklustre”, with output down 4.7% in the three months to April, but the rate of decline has slowed significantly since then, “providing some hope that the downward trend of the past few years might be coming to an end”.

Sales volumes of aggregates and concrete, excluding acquisitions, were above last year while asphalt was flat.

Tom said: "We expect product volumes in the second half of the year, on a like-for-like basis, to be slightly ahead of the comparable period last year, with the exception of asphalt which will continue to suffer from reduced local authority spending until recently allocated funding starts to come through.

"The group has performed well in the first six months of 2013 and we expect to make further progress in the second half."

Shares in Breedon Aggregates were up 1.9% at 27.25p at 09:10 on Thursday.

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