Breedon Aggregates (BREE) may look like a slow burner, but it's important to remember that it has over half a billion tonnes of aggregate reserves held in more than 50 quarries across England and Scotland, and that's without including more than 60 ready-mixed concrete plants and nearly 30 asphalt plants. And with completion of the Hope Construction Materials acquisition expected in August, this will increase to nearly 200 ready-mixed concrete plants and about three-quarters of a billion tonnes of reserves.
Despite uncertainties generated ahead of the referendum, Breedon increased its underlying earnings in the six months to June by 21 per cent to £22.8m, while its preferred performance metric, underlying margins, grew from 11.8 per cent to 14 per cent. The first half included winning its largest ever contract in Scotland, valued at up to £55m as part of a £745m project for a road round Aberdeen. And, despite relatively subdued market conditions, work on several new projects was secured in England. All in all, 4.6m tonnes of aggregates were sold, up from 4.5m a year earlier.
Finances are in good shape, boosted by £39.1m raised through a share placing late last year, and net debt of £58.3m in June 2015 has been turned into a net cash balance of £17.6m.
Analysts at Peel Hunt are forecasting adjusted pre-tax profits of £49m and EPS of 3p for the year to December 2016 (from £35m and 2.7p in 2015).
| BREEDON AGGREGATES (BREE) | ||||
|---|---|---|---|---|
| ORD PRICE: | 67.75p | MARKET VALUE: | £780m | |
| TOUCH: | 67.5-68p | 12-MONTH HIGH: | 77p | LOW: 50p |
| DIVIDEND YIELD: | nil | PE RATIO: | 27 | |
| NET ASSET VALUE: | 22p | NET CASH: | £17.6m | |
| Half-year to 30 Jun | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2015 | 161 | 17.5 | 1.3 | nil |
| 2016 | 163 | 20.9 | 1.4 | nil |
| % change | +2 | +19 | +12 | - |
Ex-div: na Payment: na | ||||
