Breedon Aggregates, which produces aggregates, asphalt and concrete for the construction industry, made a pre-tax profit of £17.5m in the six months to 30th June 2015 (2014 H1: £9.1m) on revenue of £160.5m (2014 H1: £125.2m).
The results are boosted by the acquisitions of Huntsman's Quarries, which was acquired in June 2014 and Barr Quarries, which was acquired on 31st October 2014.
In the first half of 2015 Breedon sold:
- 4.5 million tonnes of aggregates (2014 H1: 3.6 million tonnes)
- 900,000 tonnes of asphalt (2014 H1: 700,000 tonnes)
- 400,000 m3 of ready-mixed concrete (2014 H1: 300,000 m3).
Executive chairman Peter Tom said: "Trading during the first half was strong, with both the underlying business and recent acquisitions performing ahead of our expectations. March was a record month for the group, with exceptional performances from both England and Scotland. Assuming that current trading conditions continue through the second half of 2015, we believe that market expectations for the year will be exceeded."
He added: “When we formed Breedon Aggregates in 2010, we set ourselves a medium-term underlying EBITDA margin target of 15%. We are pleased to have broken through that goal this year, helped by the unusually low oil price, and we think it appropriate to set a new target. We are therefore now aiming for an underlying EBIT margin of 15% by 2020 (representing an underlying EBITDA margin of approximately 20%), which is consistent with that being achieved by the industry prior to the recession.”
Breedon’s capital investment programme includes nearly £3m committed to the former Barr business, as well as new asphalt plants to replace a 40-year-old plant near Inverness and the recently sold plant at Tom's Forest quarry near Aberdeen.
In England, the board has approved a major upgrade to the crushing equipment at its largest quarry, Cloud Hill near Breedon on the Hill in the East Midlands, and also invested in additional equipment at Huntsmans to increase capacity and enable the production of dense concrete blocks at the quarry. The two asphalt plants that were bought from Hope Construction Materials last year have been refurbished. A planning application has been submitted to expand the Clearwell quarry in Gloucestershire, acquired from Marshalls in 2013, and a new sand and gravel quarry is also expected to come on stream at Earls Barton near Northampton this year.