LONDON (ShareCast) - (Sharecast News) - Construction materials group Breedon reported a robust first-half performance on Wednesday despite challenging market conditions, driven by strategic progress and operational efficiency.
The FTSE 250 company said its revenue increased 3% to £764.6m for the six months ended 30 June, supported by its entry into the US market.

Its EBITDA rose 5% to £118.1m, with an EBITDA margin improvement of 30 basis points to 15.4%.

EBIT grew 2% to £71.6m, while the EBIT margin slightly decreased by 10 basis points to 9.4%.

Profit before tax fell 6% to £61.2m, and basic earnings per share declined 9% to 13.9p.

The interim dividend was hiked by 13% to 4.5p per share, reflecting confidence in long-term growth.

In Great Britain, revenue decreased 5%, primarily due to wet weather conditions and a challenging market.

However, the group said it saw a strong performance in Ireland, with underlying EBIT improving by 37% due to successful tenders and an active order book.

The newly-acquired BMC in the US traded ahead of plan, contributing nearly four months of revenue and earnings.

Breedon's cement division's underlying EBIT margin meanwhile improved to 15.2%, supported by resilient pricing and lower energy costs.

The firm launched a scalable third platform in the US through the acquisition of BMC during the period, marking a significant strategic expansion into a fragmented and growing market.

Its active merger and acquisition pipeline also saw the completion of two bolt-on transactions in Great Britain.

Sustainability efforts continued with the implementation of a new health, safety, and wellbeing strategy, the start of solar farm construction at Kinnegad, and increased use of alternative fuels in the cement business.

Breedon said it expected growth in all its markets from 2025, supported by a stabilising economic and political landscape.

The board said the UK government's growth agenda, particularly in housebuilding and infrastructure, along with the resumption of a governing Northern Ireland Assembly at Stormont, were seen as positive developments.

In Ireland, high-profile road projects and the structural need for housing and infrastructure investment provided a strong outlook, while stateside, significant infrastructure and housing deficits, robust stimulus funding, and healthy state budgets underpinned long-term growth prospects.

Management expectations for the full year remained unchanged, with underlying EBIT anticipated to be slightly more weighted towards the second half of the year.

"We achieved a major strategic objective in March, entering the US and establishing our third platform with the transformative acquisition of BMC, creating the foundation from which we will build out our US business," said chief executive officer Rob Wood.

"We expanded our routes to market, delivering two bolt-on transactions in GB, and growing organically through our downstream businesses, pulling through more of our own material.

"We moved our sustainable growth strategy forward on all fronts in the first half of 2024 and were pleased to see this recognised by CDP with our first ratings placing us at the forefront of our sector for climate change and water security."

At 1058 BST, shares in Breedon Group were down 4.63% at 391p.

Reporting by Josh White for Sharecast.com.

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