24 November 2021
BREEDON GROUP PLC
Full year result to be slightly above top end of current market expectations*
Strong trading performance and robust cost management
Breedon Group plc (“Breedon” or the “Group”), a leading vertically integrated construction materials group in Great Britain and Ireland today reports on its performance for the 10 months to 31 October 2021.
Trading performance
- Group revenue of £1,045m up 31% versus the same period in 2019
- Like-for-like1 revenue increased 15% on the same period in 2019
- Positive margin performance reflects dynamic pricing and cost recovery actions
- Layered hedging policy continued to mitigate key commodity cost pressures
Breedon has continued to benefit from strong end markets, with demand levels remaining encouraging across the Group. Trends evident in the first half have persisted with momentum in residential housebuilding and infrastructure spending continuing to drive volume growth. Ireland continued to gain traction during the second half following the lifting of Government restrictions on non-essential construction.
Pricing actions have increasingly reflected the dynamic cost environment and our layered hedging policy has delivered visibility of energy and carbon costs. As indicated in July, allowing for the natural lag to implement price adjustments, we have secured full cost recovery in the second half, leading to margin improvement.
Underlying EBIT2 performance for the 2021 full year will now be stronger than we expected and, assuming no adverse weather events, will be slightly above the upper end of the range of market expectations*.
Financial position
- Cash generation has remained strong and the Group has continued to degear, assisted by lower levels of capital expenditure. Our two-year capital investment plan, with its emphasis on sustainability linked projects, is unchanged and amounts to c.£170m over 2021 and 2022. However, we now expect capex for 2021 will be c.£70m with the balance deferred into next year, principally as a result of extended procurement lead times.
Outlook
- The recovery we experienced in the first half of 2021 has been sustained, with supply chain disruption managed effectively by our local teams who have stayed close to their customers and suppliers. While the dynamic cost environment is likely to persist into 2022, the medium-term outlook for our end markets and demand levels remains encouraging, with both the UK and Irish Governments committed to material long-term spending plans for construction.
Capital Markets Event
Breedon will host a Capital Markets Event for analysts and institutional investors at the London Stock Exchange today from 3:30 to 5:30pm with registration open from 3:00pm. The event will be webcast live and include presentations addressing the Group's strategy for long-term sustainable growth.
To register for the Capital Markets Event please contact pia.anand@teneo.com or visit the Breedon Investor Relations website and follow this link .
Market expectations*
Market expectations are defined as Breedon compiled analyst consensus. As at 23 November 2021 market expectations for Underlying EBIT2 for the full year 2021 were an average of £129m with a range of £122m to £131m.