Canny acquisitions, self-help and improving conditions in the construction market are leading to predictions of explosive earnings growth at heavy materials sector consolidator Breedon Aggregates (BREE).
- Geared to economic recovery
- More acquisitions likely
- Huge aggregate reserves
- Strong barriers to entry
- No dividend
- OFT investigation on Scottish acquisitions
Breedon is the largest independent aggregates business in the UK, owning 37 quarries, 22 asphalt plants and 48 concrete batching plants in England and Scotland. Total mineral reserves now stand at nearly 400m tonnes, which is enough to keep it going for 76 years at current output levels. Crucially, these outlets are dotted all around the country, which is a major competitive advantage because delivering aggregate any great distance is an expensive business. And supply is severely restricted as no significant licences for new quarries have been issued for at least 25 years.