LONDON (Alliance News) - Breedon Aggregates Ltd Thursday reported an increase in profit and revenue for the first half, boosted by recent acquisitions and a recovery in the UK construction market.
The concrete and aggregates business posted pretax profit of GBP9.1 million for the period ended June 30, up from GBP4.4 million a year earlier, as revenue rose to GBP125.2 million from GBP100.2 million.
Breedon said its results include a full six months' benefit from the acquisition of the former Marshalls PLC quarries in England and the former Aggregate Industries operation in Scotland, completed in April 2013. The results also include a month's contribution from Huntsman's Quarries which was acquired in June for GBP15 million, extending the group's operations in Gloucestershire and into Worcestershire.
The company said trading during the first half was in line with expectations and strongly ahead of the first six months of 2013, driven primarily by a much-improved first quarter compared with the same period last year, which had been severely affected by poor weather.
In addition, Breedon said the UK construction sector continued to recover, with first-quarter output growing by 5.4% year-on-year. Much of this growth was driven by housing, which in the first quarter was over 25% ahead year-on-year, the company added. Construction output is a monthly estimate of the output of the construction industry in both the private and public sectors. The estimate is a key component of UK gross domestic product. It includes general construction and demolition work, civil engineering, new construction work, and repair and maintenance.
The company said its first half sales volumes were well ahead of a year earlier, with aggregates up 31%, asphalt up 16% and concrete up 15%.
Overall, Breedon said market conditions in England remain stronger than in Scotland, although the Scottish business had a strong first quarter on the back of increased spending by Transport Scotland.
At the period-end net assets stood at GBP156.7 million, compared with GBP149.0 million at December 31 and GBP142.8 million at June 30, 2013, it said.
Looking ahead, the company said it expects demand to remain strong throughout the second half of the year in England, with supplies continuing to the A453 and i54 road projects and to the Nottingham Tramway.
The company also expects strong second-half performances from its recently acquired quarry in Gloucestershire.
In Scotland, the company said the independence vote in September is creating some uncertainty. "Whilst this is likely to continue as the referendum date approaches, we continue to believe that the medium-term prospects for infrastructure investment and housing look good, regardless of the outcome."
Breedon Aggregates shares were quoted up 0.7% at 39.00 pence Thursday morning.
By Anthony Tshibangu; anthonytshibangu@alliancenews.com; @AnthonyAllNews
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Marshalls (MSLH)
Breedon (BREE)