Breedon Group (BREE) H1 2024 earnings summary

Executive summary

• Delivered resilient H1 2024 performance despite challenging GB market and adverse weather, with strong results in Ireland and a positive initial contribution from the U.S. BMC acquisition.

• Strategic progress made through three acquisitions, including entry into the U.S. via BMC, and continued organic investments and sustainability initiatives.

• Focused on operational excellence, efficiency, and sustainability, with advancements in safety, alternative fuels, and carbon reduction.

• Integration of BMC in the US progressing well, establishing a scalable third platform for future growth.

• Interim dividend increased 13% to 4.5p, reflecting confidence in long-term growth.

Financial highlights

• Revenue rose 3% year-over-year to £764.6m, with underlying EBIT up 2% to £71.6m and margin at 9.4%.

• Free cash outflow of £9.6m; net debt increased to £472.3m, mainly due to BMC acquisition.

• Statutory Profit Before Tax: £46.5m (-18%); Underlying PBT: £61.2m (-6%).

• Adjusted EPS: 13.9p; Statutory EPS: 10.0p; ROIC at 8.8%.

• Interim dividend per share up 13% to 4.5p; cash cost of dividend at £48m.

Outlook and guidance

• Full-year expectations unchanged; underlying EBIT to be more weighted to H2, consistent with historical patterns.

• CapEx guidance for the year is £130m; net debt expected to be around £430m at year-end, absent further M&A.

• Net interest expense for 2024 c.£25m; effective tax rate c.22%; dividend cash cost £48m.

• Growth expected in all markets from 2025 as economic and political conditions stabilise.

• Strategic flexibility to maintain progressive dividend, invest for growth, and execute M&A pipeline.