Breedon Group reports earnings up 43% to GBP652m

Breedon Group PLC reports revenues grew by 43 per cent to GBP652.4m (US$904.9m) in 2017 while underlying earnings before interest and tax (EBIT) increased by 35 per cent to GBP80.4m, including a full-year contribution from Hope Construction Materials Ltd. This equates to an underlying EBIT margin of 12.3 per cent and Breedon reports that it is making good progress towards its 2020 target of 15 per cent.

Profit before tax rose by 52 per cent to GBP71.2m and underlying basic earnings per share increased by 19 per cent to GBP4.14.

In 2017 the company invested a further GBP46m in its quarries, cement plant and downstream operations and around GBP10m was spent on acquisitions.

Cement division
The earnings included a full-year contribution from Hope Construction Materials, which was fully integrated into the group less than 12 months after completion of the acquisition, and from Sherburn Minerals Ltd. Total revenues for Breedon Cement rose to GBP141.6m, generating underlying EBIT of GBP25.8m. 

Following two major kiln shutdowns, two kiln pit-stops and a cement mill shutdown - all completed safely, on time and on budget - the reliability factor of the plant at the year-end reached 97 per cent, a world-class level of performance, said Breedon's company statement.

"Our two import terminals at Blyth and Dundee, which were acquired as part of the Sherburn acquisition in November 2016, were successfully integrated into the division, enabling us to expand our cementitious business through the importation of cement and ground granulated blast-furnace slag (GGBS). They also provide a complementary source of supply and back-up support to our main cement plant," said Tim Billingham, Breedon Cement's interim managing director.

"We completed a major programme of capital investment during the year, including a fleet of new tractor units and powder tankers; upgrades to the preheater riser, kiln feed and rail line at Hope Works; and a replacement excavator at the limestone quarry," added Mr Billingham.

The company plans to accelerate its shale replacement project, sourcing increased quantities of pulverised fly ash (pfa) as a shale substitute, to ensure that it has in place a sustainable alternative source of waste-derived raw material for the cement-making mix by the mid-2019.