Breedon Group (BREE) H2 2024 earnings summary

Executive summary

• Delivered record, market-beating performance in 2024, outperforming expectations despite economic and weather headwinds, with strategic progress and the launch of a third platform in the U.S.

• Evolved strategy to "Breedon 3.0," upgraded sustainability ambitions, and refreshed financial framework.

• Completed integration of BMC and acquired Lionmark, expanding U.S. operations and diversifying revenue streams.

• Maintained strategic flexibility with reduced covenant leverage to 1.4x since the half year.

Financial highlights

• Revenue rose 6% year-over-year to £1,576m; underlying EBITDA up 11% to £269.9m with margin expansion to 17.1%.

• Earnings per share increased, with BMC accretive to EPS 12 months ahead of schedule; adjusted underlying basic EPS at 34.4p.

• Dividend per share up 7% to 14.5p; total distributions since 2021 near GBP 160 million.

• Free cash flow before major projects was £114.1m; net debt (excl. IFRS 16) at £356.6m; covenant leverage at 1.4x.

• Like-for-like revenue fell 5%, but EBITDA remained flat; EBITDA margin improved by 80 bps, now just below 17.5% target.

Outlook and guidance

• Entering 2025 in a strong position, with structural growth drivers in housebuilding and infrastructure; 2024 expected to be a floor for construction activity, with modest growth forecast for 2025 and 2026.

• U.S. and Ireland markets remain strong; U.K. outlook less clear but inquiry levels are elevated.

• 2025 guidance: consolidated Lionmark for 10 months, group tax rate c.23%, capex £125–135m, dividend cash cost c.£50m, working capital outflow expected at £20–30m.

• Group depreciation charge to be around £115m; interest charge around £35m.

• Year-end net debt expected just over £550m.