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Record results for Breedon despite reduced volumes

8 Mar 23 The rising cost of building materials has helped Breedon to post record financial results, ahead of market expectations

Breedon has a mineral pipeline in excess of 100 million tonnes
Breedon has a mineral pipeline in excess of 100 million tonnes

In the year to 31st December 2022, Breedon Group revenue rose 13% to £1,396.3m (2021: £1,232.5m).

Pre-tax profit rose 19% to £135.8m (2021: £114.3m).

The results were also helped by three bolt-on acquisitions – marine dredging business Severn Sands, concrete supplier RT Mycock and surfacing contractor Thomas Bow – although like-for-like revenue was still up 11%.

However, the volume of materials sold by Breedon in 2022 (aggregates, asphalt and concrete) was actually lower than in 2021. This was attributed to a bumper 2021, inflated by post-Covid demand – suppressed in 2020, released in 2021.

For example, cement volumes were down 9% in 2022 to 2.2m tonnes, but revenue from cement was up 22% to £300.7m (2021: £245.6m), with prices rising steadily through the year to more than compensate for rising input costs.

Breedon's 2022 sales, therefore were simultaneously both up and down.

Chief executive Rob Wood said: “2022 was another record year. Each division progressed and we made meaningful headway on our growth strategy, expanding organically, acquiring strategically important assets, and moving our sustainability agenda forward.

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“We grew sustainably through replenishing and optimising our mineral assets, investing in our colleague’s safety and wellbeing, and reducing our carbon footprint while maintaining a secure financial position. We have a mineral pipeline in excess of 100 million tonnes, we achieved the highest substitution of fossil fuels at our cement plants in our history, and we invested for growth while still reducing our leverage.

“In recent years our local and entrepreneurial operating model has been tried and tested, keeping our people safe while growing high-quality earnings, and maintaining a strong balance sheet. Despite the uncertain economic and geopolitical landscape, 2023 has begun positively and we are in a strong position. We will continue to supply essential materials to growing end-markets, and we remain confident in our ability to deliver.

“We recognise the UK economic backdrop remains uncertain, particularly with regard to residential housebuilding. However, the end-markets we serve benefit from long-term structural growth dynamics.”

Breedon Group also revealed today that it plans to move from the Alternative Investment Market (AIM) to the main market of the London Stock Exchange.

Chairman Amit Bhatia explained: “Being a member of AIM has served us well. For over a decade the AIM market provided us with access to diverse and engaged investors, within a supportive community that understands the needs of entrepreneurial businesses such as Breedon and we thank them wholeheartedly for their support.

“As an established business, with a track record for growth and value creation, we believe the main market now offers the appropriate listing for a company of our scale and heritage.”

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