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. business via the BMC acquisition.

• Strategic progress included U.S. entry (BMC acquisition), two further UK acquisitions, and continued organic investment, with a focus on operational efficiency, disciplined investment, and sustainability initiatives.

• Sustainability initiatives advanced, including increased alternative fuel use, solar projects, progress toward net zero targets, and improved health and safety.

• 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, supported by acquisitions, but like-for-like revenue declined 6% due to GB market weakness.

• Underlying EBIT increased 2% to £71.6m, with margin stable at 9.4%.

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

• Interim dividend per share increased 13% to 4.5p; statutory basic EPS at 13.0p, adjusted underlying basic EPS at 15.3p.

• Acquisitions contributed £66m to revenue, mainly from BMC.

Outlook and guidance

• Full-year expectations unchanged; underlying EBIT to be more weighted to H2, with historical split of 43-57%.

• CapEx guidance for the year at £130m; year-end net debt expected around £430m-£472.3m, absent further M&A.

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

• Macro forecasts revised down for 2024 but up for 2025, with growth expected in all markets from 2025.

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