Construction materials group posts major profit jump after £336m acquisition

An organisation which claims to be the UK’s largest independent construction materials group has reported a 50% rise in profit before tax following its acquisition of a rival last year.

In its latest annual results, Breedon Group – which specialises in aggregates, concrete products and cement – announced profit before tax of £46.8m for the year ended 31st December 2016, up from £31.3m the previous year.

The group attributed this transformation in part to the £336m acquisition of cement specialist Hope Construction Materials in August 2016.

Peter Tom, executive chairman of Breedon Group, said: “2016 was arguably the most eventful year in the group's history.

“We completed our largest acquisition to date, invested a record amount in our business, began supplying our biggest ever contract and delivered an excellent financial performance – all against the background of an uncertain economic environment and challenging trading conditions in many of our markets.”

The Hope acquisition was followed by the purchase of Durham-based Sherburn Minerals Group, which added two cementitious import terminals, a further five quarries and four ready-mixed concrete plants to the group’s portfolio.

Breedon also reported it had established a strong platform for growth in 2017 on the back of expected increases in infrastructure and housing investment.

Peter added: “As we look ahead, the government appears to have finally committed to substantial investment in the UK's infrastructure and this, coupled with anticipated growth in the private housing market, is expected to bring significant medium- and long-term benefits to our business.

“We will carry on doing what we do best: running our company as efficiently as possible, delivering healthy organic growth complemented by earnings-enhancing acquisitions, and thereby continuing to generate the excellent returns our shareholders expect of us.

“We look to the future with considerable optimism.”

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