BREEDON GROUP PLC
Interim results 2022
Strong first half supported by resilient end-markets
Expect full-year earnings at top end of current market expectations
Breedon Group plc (“Breedon” or the “Group”), a leading vertically-integrated construction materials group in Great Britain and Ireland, announces unaudited interim results for the six months ended 30 June 2022.
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Statutory highlights |
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U nderlying 1 highlights |
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£ m except where stated |
H1 2022 |
H1 2021 |
% change |
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H1 2022 |
H1 2021 |
% change |
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Revenue |
671.1 |
600.9 |
12% |
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671.1 |
600.9 |
12% |
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EBIT |
65.5 |
53.7 |
22% |
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66.9 |
56.4 |
19% |
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EBIT margin |
9.8% |
8.9% |
90bps |
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10.0% |
9.4% |
60bps |
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Profit Before Tax |
59.5 |
46.2 |
29% |
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60.9 |
48.9 |
25% |
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Basic EPS2 |
2.91p |
1.41p |
106% |
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3.01p |
2.39p |
26% |
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Dividend per share |
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0.70p |
0.50p |
40% |
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Covenant Leverage3 |
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1.0x |
1.2x |
(17)% |
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ROIC4 |
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10.0% |
9.2% |
80bps |
HIGHLIGHTS
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Focused execution of strategy delivering higher revenue, earnings and returns |
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Rational pricing environment and hedging policy enabled full cost recovery |
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Strong financial position maintained; Covenant Leverage 1.0x (H1 2021: 1.2x) reflects increased capital investment, seasonal working capital outflow and payment of final dividend |
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Interim dividend increased 40% to 0.70p |
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Sustainability agenda progressed; committed to the Science Based Targets initiative |
OUTLOOK
During the first half, the economic and political backdrop has grown increasingly uncertain, impacting visibility beyond 2022. While we recognise the potential for these developments to affect confidence, we are optimistic for the remainder of 2022. Our customers' order books are healthy, the mechanism for passing through cost increases has traction and enquiry levels are encouraging. We therefore expect to deliver Underlying EBIT at the top end of the range of consensus expectations5.
Our longer-term prospects are underpinned by the resilience of the end-markets we serve; infrastructure demand is well supported by large long-term projects and centrally funded schemes, material industrial projects are coming to market driven by the environmental agenda, and house building order books remain robust.
ROB WOOD, CHIEF EXECUTIVE OFFICER, COMMENTED :
“We enjoyed a strong start to 2022. Our teams are focused on getting pricing right, our end market exposure is supportive and that has produced excellent results, advancing our margins and returns towards our medium term targets. We completed two in-fill transactions during July, with further M&A activity in the pipeline, and we have continued to progress a broad range of sustainability initiatives, including a commitment to the Science Based Targets initiative.
“Crucially, we achieved this strong outturn while keeping our people safe and well. We have continued to invest in our team as we prepare for our next chapter of growth and that was reflected in our recent engagement survey where response and engagement rates were the highest ever. Our colleagues are embracing the challenges presented by the uncertain backdrop, remaining focused on responding nimbly to local market requirements, winning new business, driving efficiencies and delivering first-class service to our customers. Now more than ever, our agile and entrepreneurial DNA will set us apart.”
This announcement contains inside information for the purposes of Article 7 of the Market Abuse Regulation (EU) No. 596/2014 as it forms part of domestic law by virtue of the European Union (Withdrawal) Act 2018.