Breedon moves into the Irish market

Of the four, the key purchase was Lagan Group for £455m, as it gives Breedon access to the markets in the Republic of Ireland. Trading in the first 10 weeks showed Lagan performing ahead of expectations.

Underlying cash margins, which Breedon sees as its key performance measure, were maintained at 11.1 per cent, despite higher input costs. However, the Lagan acquisition is expected to have some dilutive effect in the short term, although the underlying target remains at 15 per cent.

Poor weather at the start of the year affected trading in the UK, notably in ready-mixed concrete, where volume output fell by 10 per cent, and because projects are being held back due to Brexit uncertainty. However, aggregate and asphalt volumes were higher against a decline in the UK overall.

Just after the half-year end, Breedon completed its Tarmac asset swap, whereby it gained four new quarries with around 25m tonnes of additional reserves in exchange for 23 ready-mixed concrete plants and £6.1m in cash. The deal means that Breedon will be less reliant on third-party aggregates to supply its concrete and asphalt plants.

Analysts at Peel Hunt are forecasting pre-tax profits for the year to December 2018 of £89m and EPS of 4.4p (up from £74m and 4.1p in 2017).