Breedon Group delivers H1 2025 revenue of £815.9m, dividend lifted to 4.75p

Breedon Group plc (LON:BREE), a leading vertically-integrated construction materials group in Great Britain, Ireland and the United States, has announced unaudited results for the six months ended 30 June 2025.

FINANCIAL HIGHLIGHTS

Acquisition of Lionmark and careful cost control partially offsets challenging market conditions

·      Revenue increased 7% driven by the acquisition of Lionmark;

o  LFL Revenue decreased by 3% with volume and mix down 4% due to challenging markets in GB, major project delays in Ireland and adverse US weather conditions

o  Stable pricing, supported by our teams demonstrating good commercial focus, particularly in the US, backed by strong order backlogs and enquiries in key markets

·      LFL Underlying EBITDA margin decreased 30bps reflecting operating leverage in GB and trading elsewhere, partially offset by disciplined cost management

Resilient financial performance; navigating challenging conditions well

·      Covenant Leverage increased to 2.2x reflecting the Lionmark acquisition and the peak of our in-year working capital cycle; Covenant Leverage is expected to reduce over the second half

·      Post-tax ROIC 7.8% (H1 2024: 8.8%) incorporates four months ownership of Lionmark and lower levels of profitability

·      Given the difficult first half and the macroeconomic headwinds we now expect our result for the full year will be at the low end of the current range of market expectations⁸

Interim dividend increased to 4.75p; reflecting our confidence in the Group’s future prospects

OPERATING HIGHLIGHTS

Focus on self-help, customer service and commercial discipline

·      GB enquiries remain elevated and we continue to win high-quality work despite challenging markets; focusing on self-help and delivering consistently excellent customer service

·      Ireland Underlying EBITDA margin expanded 130bps; reflecting disciplined tendering and good cost control.  While certain major projects have been deferred beyond 2025 the medium-term outlook remains positive

·      US continues to progress the integration of Lionmark in line with the plan.  Extremes of weather in the first half have required careful operational management; however underlying demand and order backlogs remain strong

·      Cement volumes were slightly lower, reflecting GB end market demand for ready-mixed concrete.  The division has successfully completed its major investment projects in the first half and continues to progress decarbonisation initiatives

STRATEGIC HIGHLIGHTS

EXPAND: Lionmark secures balanced end market exposure for our US business

·      We operate three vertically-integrated geographic platforms.  In the US we now have a balanced business with greater infrastructure exposure where healthy backlogs are underpinned by long-term federal and state funding programmes

IMPROVE: Replenishing mineral reserves and focusing on commercial discipline

·      Secured planning extensions for 8m tonnes and progressed a pipeline of 142m tonnes of mineral at various stages of development

·      Unlocking further efficiencies and adjusting capacity in response to market conditions.

LENSES: Enablers of growth

·      People; welcomed new Lionmark colleagues, reaccelerated our apprenticeship programme and, with effect from 1 July, moved to a country management structure (GB, Ireland and US) to reflect the geographical operating profile of the Group

·      Sustainability: CDP ratings upgraded (Climate Change: A- from B, Water Security: B- from C), Peak Cluster joint venture established to progress carbon capture pipeline investment; significant progress with ‘Breedon Balance’, our range of products with sustainable attributes

·      Finance: additional £79m USPP loan notes issued at attractive rates to finance Lionmark acquisition.  Strong, flexible balance sheet maintained with RCF facilities now extended to 2029

CURRENT TRADING AND OUTLOOK

·      Given the difficult first half and the macroeconomic headwinds, we now expect our result for the full year will be at the low end of the current range of market expectations⁸

·      Our key end-markets, housebuilding and infrastructure, benefit from long-term structural growth drivers across all three platforms

·      The UK Government’s encouraging commitments to invest at least £725bn into infrastructure over the next decade, including £39bn into affordable housing, should underpin future demand and we continue to believe that 2024 should be the floor for volumes

·      In Ireland, the medium-term outlook remains positive and we welcome the outcome of the National Development Plan Review 2025, committing to invest more than €275bn over the next decade

·      Our US business enters the second half with a healthy backlog and greater exposure to the growing and well-funded infrastructure market. We expect our US business will see further growth and margin expansion over the balance of the year

·      Our M&A pipeline remains well-populated and provides exciting opportunities in each of our geographies

·      We are well invested and optimally positioned to benefit when construction market activity improves

Rob Wood, Chief Executive Officer, remarked:

“Breedon has had a challenging first half to the financial year; however I am pleased at how our teams have responded to those challenges by renewing their focus on self-help and customer service while ensuring we maintain our commercial discipline.

“We are confident in the medium-term prospects for the Group and the very nature of our business, supplying local products within local markets, provides a degree of protection in the current uncertain economic climate.

“We have a strong and committed team, three leading platforms in geographies that have structural long-term growth drivers, significant reserves and resources and a well invested production capability. We remain optimally positioned to benefit when construction market activity improves.”

RESULTS PRESENTATION

Breedon will host a results presentation for analysts and investors at 08:30am today at the London Stock Exchange, 10 Paternoster Square, London EC4M 7LS, or online via www.breedongroup.com/investors. The presentation will be followed by Q&A, where it will be possible to participate through the following dial-in details: