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Fri July 10 2020

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Breedon profits rise but so do injuries

6 Mar 19 Building materials group Breedon continues its growth trajectory, posting improved revenue and earnings on the back of recent acquisitions.

Breedeon paid £455m for Lagan Group last year and swapped some of its ready-mix plants for three Tarmac quarries.

The result was a 32% rise in revenue to £862.7m for 2018 (2017: £652.4m) and a 12% rise in pre-tax profit to £79.9m (2017: £71.2m).

On the downside, the Lagan acquisition saw net debt at year-end total £310.7m – equivalent to 2.0 times underlying EBITDA – although ‘a material proportion’ of the post-Lagan debt had been paid off by then.

Executive chairman Peter Tom said of the company’s 10th anniversary year: “The acquisition of Lagan in April was transformative. It took us into an attractive new market with significant growth potential, also helping to offset a muted GB performance in the year under review. In addition, the Tarmac asset swap was important as it enabled us to streamline our concrete network by relinquishing 23 peripheral plants in exchange for 25 million tonnes of reserves in four quarries, together with an asphalt plant, thereby further strengthening our asset base and improving the quality of our earnings.”

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He said: "We can be justifiably proud of our results. We outperformed the GB market in sales volumes of all our key products, grew our revenues and underlying EBIT, and once again generated strong cash flow, enabling us to pay down a material proportion of our post-Lagan debt by the year-end.

"Our company is in excellent shape and well placed to benefit from the medium-term growth predicted for our markets.  We have a strong asset base, a highly cash-generative business and a talented management team, all of which give us a significant competitive advantage whatever the market conditions.”

Chief executive Pat Ward reflected on the unsatisfactory safety performance of the company in 2018 and the need to improve. “After making further progress in reducing the frequency of lost-time injuries in the first half of the year, I am disappointed to report a poorer performance in the second half, with the result that we ended the year some distance from our target reduction for 2018,” he said.

“It was particularly disappointing that the accidents involved – all of which resulted in a colleague being absent from work for at least a day – were easily avoidable: typically slips, trips or falls,” he continued. “However, we have made great strides in embedding our Safety Commitments, engagement with our colleagues is steadily improving and with the commitment of everyone in the business we are confident of delivering marked improvements in our safety performance.”

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