Breedon Group H1 2026 Earnings Report

Breedon Group EPS Results

• Actual EPS: GBX 9.40
• Consensus EPS: N/A
• Beat/Miss: N/A
• One Year Ago EPS: N/A

Breedon Group Revenue Results

• Actual Revenue: N/A
• Expected Revenue: N/A
• Beat/Miss: N/A
• YoY Revenue Growth: N/A

Breedon Group Announcement Details

• Quarter: H1 2026
• Date: 7/29/2026
• Time: Before Market Opens
• Conference Call Date: Wednesday, July 29, 2026
• Conference Call Time: 3:30AM ET

Breedon Group (LON:BREE), a leading vertically-integrated construction materials group in Great Britain, Ireland and the USA, delivers essential products to the construction sector. Breedon holds 1.5bn tonnes of mineral reserves and resources with long reserve life, supplying value-added products and services, including specialty materials, surfacing and highway maintenance operations, to a broad range of customers through its extensive local network of quarries, ready-mixed concrete and asphalt plants. The Group’s two well-invested cement plants are actively engaged in a number of carbon reduction practices, which include utilising alternative raw materials and lower carbon fuels. Breedon’s c.4,900 colleagues embody our commitment to ‘Make a Material Difference’ as the Group continues to execute its strategy to create sustainable value for all stakeholders, delivering growth through organic improvement and acquisition in the heavyside construction materials market.

Breedon Group H1 2026 Earnings Call Transcript

Key Takeaways

• Positive Sentiment: Solid first-half performance: Reported revenue rose 5% and like-for-like revenue increased about 3%, while underlying EBITDA was broadly flat; the company also raised its interim dividend.
• Neutral Sentiment: Regional performance diverged: Ireland and the U.S. delivered strong growth, including mid-teens like-for-like revenue and EBITDA growth in the U.S., while continued residential weakness caused G.B. ready-mix concrete volumes to fall 8%.
• Positive Sentiment: Cash generation and leverage remain manageable: First-half free cash outflow improved to approximately £15 million from £25 million, with full-year net debt expected near £650 million and leverage close to two times.
• Positive Sentiment: Breedon continued to pursue strategic acquisitions and investment, including Falling Springs in the U.S. and Booth in Ireland, while highlighting a healthy pipeline of primarily bolt-on opportunities and major Scottish renewables-related infrastructure demand.
• Negative Sentiment: G.B. market conditions remain difficult: Management expects market demand to decline for a fifth consecutive year, sees little underlying pricing growth beyond surcharges in 2026, and reported post-tax returns on invested capital remain below target.

Presentation

[Rob Wood, CEO at Breedon]

Good morning, everyone, and welcome to our 2026 results presentation. James and I will guide you through our presentation, then we'll open things up for questions. I'm pleased to report that in another challenging period, Breedon has proved once again the strength of our model and the quality of our people and has delivered a really solid performance. Positive momentum in Ireland and the U.S. has offset continued market challenges in G.B. Across the group, the short-term impacts of the Middle East conflict have been well managed. Given the strength of our cash generation and our confidence in our long-term prospects, we have again increased our interim dividend. In parallel to delivering this performance, I'm pleased to report that we have made significant progress on our strategic priorities.

[Rob Wood, CEO at Breedon]

The acquisitions which we completed in the U.S. and Ireland demonstrate the ability of our teams to source and execute strategically compelling earnings accretive transactions at attractive valuations. We launched our Back British Cement campaign. More on this later. We continued to replenish our mineral reserves, the lifeblood of our business. We continued to focus on self-help. Lastly, our Breedon 3.0 strategy is enabled by our continued investment in people, sustainability and finance, the lenses through which we view our business. In summary, I'm pleased with our first half's performance and with the progress we are making building an increasingly diversified business. I'd like to recognize the shift put in by our 4,900 colleagues for controlling the controllables to deliver a performance and continuing to make Breedon a better and stronger business. I'll now pass over to James and the financial review.

[James Brotherton, CFO at Breedon]

Good morning, everyone, and thank you, Rob. We've delivered a pretty solid first half to 2026, with our reported revenue increasing by 5%, on a like-for-like basis, increasing by around 3%. For context, that's the first time we've recorded like-for-like growth in the first half of a financial year since 2023. Underlying EBITDA was flat to 2025 and slightly ahead on a like-for-like basis, with the EBITDA margin being a touch lower at 13.5%. Our post-tax return on invested capital remains lower than we would like it to be, impacted by the short-term dilution from acquisitions and our absolute levels of profitability. We remain confident that when markets recover, we will see a rapid improvement in our reported returns. Our free cash outflow is lower than we saw last year, principally down to a well-controlled working capital build in the first half.

[James Brotherton, CFO at Breedon]

The relatively small year-on-year increase in our net indebtedness mostly reflects the strong cash generation that you'll recall came through at the back end of 2025, offset by the acquisitions and an increase in our IFRS 16 liability, which I'll talk about later. You'll find the usual detailed breakdown of our maturity profile of our facilities in the appendices. Covenant leverage at 2.1x is slightly improved from where we were 12 months ago. Bear in mind that the timing of the cash payment of the 2025 final dividend falls into the second half of this year. On a like-for-like basis, we're in roughly the same place as where we were this time last year.

[James Brotherton, CFO at Breedon]

As well as investing back into the business and completing two strategic acquisitions, we've continued to progress the dividend, reflecting our sustained confidence in the group's long-term prospects and our thoughtful approach to capital allocation. Digging into the revenue and EBITDA movements in a little bit more detail. For the group overall, we saw modest net pricing, which principally reflects the impact of the necessary charges we've had to implement in the first half. Volume and mix was very slightly ahead of last year, with significant improvements in both aggregates and asphalt offsetting cement and ready-mix concrete volume decreases. The acquisitions combined contributed around GBP 17 million to revenue.

[James Brotherton, CFO at Breedon]

Pricing and surcharges combined with our hedging program to help offset the increase in costs, and we saw a small absolute drop through on those improved volumes within the M&A contribution from the consolidation of the loss-making months of Lionmark offsetting the positive contributions that came through from Falling Springs and from Booth. As you recall, we changed the reporting structure of the group this time last year, our segmental disclosure has been restated under the revised format for the first time, and those restated half-year comparatives have been published on the website. Turning now to each of the divisions. In G.B., our revenue was flat, with the surcharges broadly balancing out marginally higher costs. Performance benefited from major infrastructure project wins being delivered.

[James Brotherton, CFO at Breedon]

This was more than offset by the negative drop through that we saw on those lower ready-mix concrete volumes as a function of the residential market. We have made further progress on operational excellence initiatives in G.B., that's helped to underpin these results, and we'll have more to say on those as the rest of the year unfolds. As you know, we can't comment specifically on G.B. cement volumes and pricing, our assessment is there's been little fundamental change to the G.B. market dynamics so far this year, as evidenced by our steady first half performance in cement. The introduction of an effective domestic CBAM from this coming January has to remain a key priority for the government, Rob will talk about that a little bit more later.

[James Brotherton, CFO at Breedon]

In Ireland, we've seen a really solid first half, delivering strong revenue growth with volume and price up mid-single digits and a promising initial contribution from Booth. Profitability in Ireland was impacted by the unscheduled cement mill shutdown, we estimate that the net overall opportunity cost for us was a couple of billion pounds. Importantly, the repair was completed on a timely basis, we don't expect any further impact from that this year. In the U.S., we've seen a really strong like-for-like trading performance in the first half, with both revenue and EBITDA up in the mid-teens and positive trends across each product category. As I referenced earlier, our working capital build has been really well controlled to the half year, as usual, I'd expect the majority of that to unwind over the course of the next six months.

[James Brotherton, CFO at Breedon]

Our CapEx spend reflects the fact that we are continuing to invest back into the business. Projects of note that are underway this year include our replacement Dublin asphalt plant, our new Scottish cement rail head, and the expansion of our bitumen storage facilities in St. Louis, which will allow us to do a meaningful U.S. winter fill for the first time. In G.B., we also took delivery of further cement rail wagons during the period. As we've done previously, we've acquired these on long-term leases, and that's the reason behind the increase in the IFRS 16 liability. In practice, there was very little change to the cash profile of the group arising from this transaction. Overall, we saw a free cash outflow in the period of around GBP 15 million, which compares with around GBP 25 million this time last year.

[James Brotherton, CFO at Breedon]

As usual, I've summarized our technical guidance to cover the balance of the year. For the year as a whole, we're expecting the first half, second half split of revenue to be around 48%-52%, with profitability, as usual, even more weighted towards the second half of the year. The rest of our income statement guidance is largely unchanged from March, other than a slight increase in the depreciation charge. Some points to note on the cash flow. Our CapEx guidance is slightly higher than it was at March, at GBP 125 million-GBP 135 million, that principally reflects the acquisitions. To confirm that we will see the usual working capital unwind across the balance of the year with our overall year-on-year position expected to be a working capital outflow of between GBP 20 million and GBP 30 million.

[James Brotherton, CFO at Breedon]

One thing that is different this year is the timing of our cash dividend payments. All cash dividend payments of GBP 55 million will be paid out in the course of the second half of the financial year, I'd expect that to be the timing going forward as well. Cash exceptionals, which principally comprise acquisition and integration-related costs, together with Peak Cluster and its associated decarbonization initiatives, will total between GBP 10 million and GBP 15 million. That should lead you to a net debt number for the full year of around GBP 650 million, with leverage reducing to close to two times. To summarize, we continue to deliver against our capital allocation framework, as evidenced by our organic investment back into the business, securing incremental reserves in G.B., investing in our cement distribution network, and upgrading our asphalt capabilities in Ireland and our bitumen capabilities in the U.S.

[James Brotherton, CFO at Breedon]

Inorganic investment through the strategically compelling acquisitions we've completed in the period, all of which came to pass as a result of the depth of our local relationships. In terms of the balance sheet, we've again extended our debt facilities, we continue to progress returns to shareholders through the dividend. Our covenant leverage at 2.1x at the peak of our in-year working capital cycle will reduce as the year progresses. Post-tax returns on invested capital remain lower than we want it to be. However, we are confident that when our markets recover, we will see that rapid improvement in our reported returns. We retain balance sheet flexibility, we're on course to deliver results in line with expectations for the full year. Thank you, I'll now pass back to Rob.

[Rob Wood, CEO at Breedon]

Thanks, James. The one theme that runs through the operational review is the Middle East conflict. I'm pleased to report that our hedging programs, along with our pricing actions, has ensured that the impact of this has been minimal in the first half. Look first at our U.K. market, where the ongoing residential weakness weighs on market volumes. Year-on-year, May 2026 GDP has grown by 1.3%. Momentum has stalled in recent months, and the economy recorded zero growth across April and May. Construction output has fallen 1.6% over the first five months of the year compared to the first five months of 2025, with infrastructure being the only part of the market that continues to provide some resilience.

[Rob Wood, CEO at Breedon]

Activity levels within our sector have been well reported, and you are all aware of the concrete 1963 stat, but the MPA now predicts that 2026 volumes will be the fifth year of market decline. The latest data available from the MPA, volumes for Q1 confirmed that the market for mineral products is still declining, with volumes in the year to March down 3% for aggregates, up 5% for asphalts, and down 12% for concrete. The residential weakness is clear to see in the concrete number. Confidence, as measured by the Construction PMI Index, stands at only 38.4 in June, after hitting a six-year low of 38.2 in May. Given all this, recent MPA and CPA forecasts have been downgraded. Considered against this backdrop, I am really pleased with our G.B. performance.

[Rob Wood, CEO at Breedon]

Revenue was flat, reflecting modest improvement in selected infrastructure and non-residential building end markets, offset by continued weakness in residential construction. Volume and pricing trends were flat overall, but varied across products according to their end market exposure. Low levels of residential construction particularly impacted concrete, where volumes declined further 8% to the first half of 2025, putting pressure on both pricing and margins. Our cement operations had a steady first six months, with earnings broadly flat compared to the first half of 2025. We continued to invest in our cement distribution capability with a new Scottish rail head expected to open in early 2027. Our teams maintained a strong commercial focus while delivering further operational excellence and self-help initiatives. I think you will now understand why I'm so pleased with the G.B. performance.

[Rob Wood, CEO at Breedon]

Before moving away from our G.B. performance, I would like to give an update on our Back British Cement campaign and also give an example of a material infrastructure opportunity that is coming down the line. In March, we launched our Back British Cement campaign to reinforce the vital role domestic cement manufacturing plays in supporting U.K. construction, economic growth, and national resilience. The key policy asks for the campaign are targeted at providing a level playing field, including effective border measures, carbon border measures, to allow domestic cement producers to compete fairly with overseas manufacturers who do not face the same costs arising from U.K. policy choices. To date, we've had good engagement with stakeholders, but the government's commitment to introducing a robust Carbon Border Adjustment Mechanism from January 2027 is an imperative. Turning to the material infrastructure opportunity, I want to briefly highlight Scottish renewables.

[Rob Wood, CEO at Breedon]

The GBP 50+ billion Scottish renewables opportunity is to be delivered as part of Ofgem's Accelerated Strategic Transmission Investment framework, or ASTI, to upgrade the electricity grid, and it will have a material impact on demand for our industry's products in Scotland over the next few years. To put the potential scale of this demand into context, it's estimated that the Beauly to Peterhead upgrade in the north of Scotland alone will require over 4 million tons of aggregates. For context, across 2025, our G.B. business, we sold just over 20 million tons of aggregates. Given our footprint in Scotland that you can see highlighted as yellow dots on this slide, we are well-positioned to participate in this opportunity. I want to turn next to the market in the Republic of Ireland, where the operating environment was more positive.

[Rob Wood, CEO at Breedon]

A record 12.1% fall in Irish GDP in the first quarter of 2026 was distorted by the surge in exports in 2025 ahead of the feared U.S. tariffs. Modified domestic demand, the better measure of domestic economic activity, rose by 4.3%. Construction output over the same period grew by 3.9%. Whilst the June Middle East impacted Construction PMI stands at only 45.4, it is clear that there is significant confidence in the 12-month outlook for construction activity. Also, the latest Euroconstruct forecast predicts that the Irish construction sector is entering a multi-year period of construction output growth at a rate more than double the Western European average, and it is expected to remain the fastest growing construction market in Europe through 2028. It is clear that the economy is in a much better place than the U.K. one, and our business in Ireland benefited from this backdrop.

[Rob Wood, CEO at Breedon]

Ireland delivered a strong revenue growth benefiting from improved construction activity in the Republic of Ireland, including some major projects delayed from 2025 and the initial contribution from Booth. Pricing trends were positive across our core product categories. Volumes were generally ahead of 2025. There was a short-term impact on our Irish margin following an unscheduled shutdown of the cement kiln at Kinnegad during May. The mill is now back operating at full capacity and is not expected to impact the performance during the second half of the year. Excluding this disruption, the trading performance of the business was encouraging, reflecting strong market fundamentals and continued commercial progress. We made further investments to support our growth strategy, reopening a quarry in County Sligo, progressing the replant of a Dublin asphalt plant, and completing the acquisition of Booth, which secured mineral reserves within reach of the strategically important Dublin markets.

[Rob Wood, CEO at Breedon]

Next, I want to talk about our market in the U.S. U.S. GDP increased by 2.7% in the year to March. Construction output over the year to May declined by 1.5%, impacted by weak rate-sensitive residential. Infrastructure spending remains comparatively resilient. There is no Construction PMI in the U.S., but the latest FMI forecast concluded that whilst construction output in 2026 is likely to be broadly flat, growth is restored in 2027 and 2028. Our U.S. business had a strong start to the year, with growing market demand and more supportive weather conditions than those experienced in the first half of 2025. While residential demand, which is more sensitive to interest rate environments, was slightly softer, healthy infrastructure and non-residential demand provided an overall favorable trading backdrop with pricing and volume trends positive for all products.

[Rob Wood, CEO at Breedon]

Reported profitability included the two loss-making winter months for Lionmark, which were consolidated for the first time following completion of the acquisition in March 2025, partially offset by the initial contribution from Falling Springs. The business continues to demonstrate success in its tendering processes with healthy backlogs as we enter the second half of the year. This included some initial wins for the supply of materials to data center projects, a sector which activity levels are noticeably increasing in the Midwest. We also expanded our footprint in the U.S. in the period, and I'd like to touch on the acquisition of Falling Springs at this point. Falling Springs Quarry is a well-invested, highly automated quarry with significant reserves, strategically located approximately 15 minutes from downtown St. Louis.

[Rob Wood, CEO at Breedon]

It's very complementary to our existing St. Louis area footprint, as you can see on this slide, where you can see our existing quarries as blue dots and Falling Springs as yellow dots. Integration into the group's existing operations in the region is progressing to plan, and the business delivered an encouraging additional contribution for the first month of ownership. We now have a great platform in the U.S. and look forward to scaling it further. I'd now like to turn to the outlook. We are building an increasingly diversified business in the structurally attractive Irish and U.S. markets, while still retaining significant upside in G.B. when volumes recover. Across the balance of the year, we expect continued positive momentum in Ireland and the U.S. with organic growth complemented by the contributions from acquisitions completed to date.

[Rob Wood, CEO at Breedon]

In G.B., although infrastructure activity provides some support, demand is expected to decline for the fifth consecutive year, and the timing and pace of recovery is unclear. Overall, we continue to expect to deliver 2026 in line with current market expectations. I want to close our presentation with a clear message. With a strong team, significant mineral reserves, and a well-invested production capacity, we are well positioned to deliver long-term growth in all three of our platforms. Thank you. We now welcome your questions.

[Rob Chantry, Analyst at Berenberg]

Hi. Rob Chantry, Berenberg. Thanks for the presentations, guys. I guess two questions. Firstly, vertical integration in the U.K. Do you think there's any areas where you're short exposure and hence pull through volumes are limited, i.e are there any areas you want to kind of expand on? Secondly, in terms of further diversification in the U.S., clearly there's kind of quite a St. Louis bias, and the kind of related weather impact that has during the season. Is there any kind of prospecting you're doing outside of that area? Is it all kind of very Midwest centered focused?

[Rob Wood, CEO at Breedon]

I'll start and we'll see where we go. In terms of vertical integration in the U.K., what we've always said consistently and reaffirmed when we've had capital markets events is that, in the U.K., there's white space where we would like to grow our business, and then we would like further vertical integration. Our core products being aggregates and cement, we've always said it's likely to be more into concrete products. In terms of the U.S., again, we've been very clear. BMC was our beachhead. Lionmark, Falling Springs Quarry have complemented that and vertically integrated the business. We've always set the ambition to base ourselves in Missouri, but include what we consider to be the Midwest, which is the neighboring states. In the appendix, there is a slide which just gives you a feel of the opportunity that's available in those surrounding states.

[Aynsley Lammin, Analyst at Investec]

Thanks. Aynsley Lammin from Investec. Just two from me as well, please. Maybe if you could comment on some of the trends you're seeing in the kind of G.B., particularly around energy costs and how you're dealing with that. Are the surcharges sticking? What's the underlying pricing kind of dynamics looking like for H2? The second question, you mentioned we'd hear more about potential cost savings towards the end of this year. Have you got plans underway to take more cost out of G.B., or is it a wait and see approach as you take a better view of next year?

[James Brotherton, CFO at Breedon]

Thanks, Aynsley. Clearly, there's been significant volatility that's come through in the first half around energy costs. We have managed that through surcharges. The narrative, it's fair to say, is inconsistent, and that does present some challenges because clearly, when the oil price is coming down at speed, customers are much more reluctant to take surcharges. The business is being proactive and is staying close to the customers. What we're trying to do is to be fair to everyone. Clearly, if we're seeing increased costs coming into the business and increased cost to serve, then we would expect that to be recoverable from the customers. Equally, what we're not trying to do is overexploit the volatility in the oil price. In terms of cost savings and operational excellence, the programs still continue.

[James Brotherton, CFO at Breedon]

What we've seen in the first half is really the tailwind from 2025 coming through and to help support performance. We're continuing with our targeted approach that we first adopted last year of identifying a smaller number of projects where we're dedicating resource, and we'd expect some things to come through in the course of the second half. We remain focused, that the one thing we don't want to do is to compromise the recovery. Clearly, the recovery has taken longer to come than any of us hoped or expected, but we still fundamentally believe that our markets will improve. When that happens, we want to be in the best possible position to take advantage of them.

[James Brotherton, CFO at Breedon]

Rob put the slide up earlier highlighting the opportunity that exists in Scotland because of the fact that we have all of those sites, all of those quarries that are in a position to support that investment that is going to come. I think it's, if you like, a real-life case study of why we want to stay invested and why we're not looking to cut costs that would compromise the future.

[Clyde Lewis, Analyst at Peel Hunt]

Thank you. Clyde Lewis at Peel Hunt. Two from me. You talked about the acquisition pipeline looking pretty good at the moment. Could you maybe expand on that in terms of, I suppose, the geographical mix within that? The second question, probably one for James, around the split of costs. It'd be great to get a bit of an update as to how much is fixed and how much is semi-variable, and obviously I can work out the variable as the balance. It'd be great to get an update on that, thinking about, again, operational gearing going forward.

[Rob Wood, CEO at Breedon]

In terms of the acquisition pipeline, you're right. It is healthy. I think given the momentum in the U.S. and Ireland at the moment, it's likely that that will be our priority in the short term.

[James Brotherton, CFO at Breedon]

Clyde, if you haven't got to slide 34, at some point. I suggest that you do, because that does break down the cost base and gives you the mix of fixed and variable. It does move around a little bit, and sometimes costs that you would like to think are variable, you actually find out in reality are fixed. Equally, it can also go the other way around. Ballpark, we reckon the cost base is 40% fixed and 60% variable.

[Christian York, Analyst at Deutsche Bank]

Christian York from Deutsche Bank. I'll just do two as well. Thanks. Just maybe following up on the M&A one. Are you seeing more opportunities in the U.S. come across your desk now that you've been active then? I suppose how do you balance that with current leverage levels versus target? The second one, just a refresher on the decarbonization exceptional costs. Just how long we should expect those to go on for. Also, I suppose, what's the catalyst for those to either become underlying or capitalized at some point? Thank you.

[Rob Wood, CEO at Breedon]

I'll do the first one. Look, in terms of the U.S., there are significant opportunities. We continue to evaluate them. I think it's fair to say that our focus is predominantly on bolt-on opportunities, the team are encouraged to bring the opportunities to us, we will review those at the appropriate time. We still genuinely believe that we have capacity to continue to do bolt-ons, maybe, James, it's worth just maybe just talking a bit about what capacity we might have given the sort of target ranges we have for leverage.

[James Brotherton, CFO at Breedon]

Yeah. If you look at where our leverage has ended up at the first half, broadly in line with where we were this time last year. We obviously saw significant de-leveraging across the second half of 2025. One of the advantages that we have as a business is that our working capital cycle is very well-defined in year. You do get the expansion in the first half, you see the contraction come through in the second. There remains the scope and the capability to do bolt-on acquisitions off the balance sheet. Clearly, the timing is not within our gift. We can be a willing buyer of businesses, we need to find willing sellers.

[James Brotherton, CFO at Breedon]

Something like a Falling Springs, whilst the end-to-end from active engagement in terms of the transaction was a relatively short period of time, the only reason we got to that position was because the U.S. team had known that asset, had known the management team, had known the shareholder group for a long period of time before that. Turning to decarbonization. What we've always said is that the investment into the Peak Cluster, the decarbonization initiatives that attach to that, we feel confident we can manage through our existing cash expenditure envelope. I would expect to see a similar sort of charge to the one that we're seeing this year over, say, the next five years in relation to those sorts of projects.

[James Brotherton, CFO at Breedon]

It is worth noting, though, that all of the decarbonization projects that have happened at scale have all had some form of either governmental or supra-governmental support, and in some instances, that support has effectively funded the entire decarbonization operation. I think that it's an area that we continue to engage with government, both directly as Breedon, but also through the Peak Cluster. We will continue to advocate that whilst we as a business and we as an industry are very committed to decarbonization, it does need to be done with the appropriate levels of support.

[Rob Wood, CEO at Breedon]

I would just add to that. What you don't see and what goes above the line is everything we're doing every day to increase the use of alternative fuels, to reduce the clinker factor, and lower carbon-intensive cement. It's all business as usual. The real prize for us is to deliver significant decarbonization of our cement in advance of having to make a decision on carbon capture.

[Harry Dow, Analyst at Rothschild & Co]

Harry Dow from Rothschild & Co. Just two, please. On the U.S., it was really very strong like for like in the first half. There's obviously the weather comp from last year. I just wonder whether you had a view on what the sort of underlying step-up was maybe in the U.S., maybe versus the second half of last year, just sort of what we should expect for the second half of this year in terms of like-for-like growth. Then I think you mentioned the opportunity cost in May from the cement plant. Just a clarification, was that of a couple of million, I think. Is that at EBITDA or is that revenue as kind of an opportunity cost?

[James Brotherton, CFO at Breedon]

On the second one, that's EBITDA. Effectively, in the month of May, which was the month that the mill was down, we made a distribution margin on cement, but we didn't make the manufacturing margin. In terms of your first question, Harry, it's a bit difficult to disentangle whether activity is better because the weather is better, or whether actually underlying activity has picked up. I think in this instance, it genuinely is a case of it's both. If you look, for example, at Lionmark's business. Lionmark, we always expected would be loss-making in the first two months of the year, and it was.

[James Brotherton, CFO at Breedon]

The loss was significantly lower than it has been in the last couple of years as a function of the fact that it was a milder winter, and therefore they were able to get out onto the roads earlier in the season than they have done in the last couple of years. We were always confident that in a more normal weather pattern year, the U.S. business would perform. I think that's what you've seen in the first half of this year. Clearly, the exam question now is: When does winter come? If winter is deferred, conceivably the business can trade all the way into mid-December. Equally, if winter comes sooner, people will choose to come off building sites, come off construction sites, and to all intents and purposes, will not go back on until the spring.

[Cedar Ekblom, Analyst at Morgan Stanley]

Thanks very much. Cedar Ekblom from Morgan Stanley. I just wanted to talk a little bit more about the competitive landscape in G.B. specifically. In your chart book, you've got a little bit of positive volume growth in aggregates and asphalt. I appreciate the concrete volumes are down quite a lot. The like-for-like growth is flat. I suppose the question is, what's going on with pricing, even in an environment where some of your segments are growing? Not everything, but some. Is there anything to say around imports as it relates to the ability to get pricing through in G.B., specifically on the cement side, clearly? Because we do hear from others in the market that the U.K. or G.B. in particular appears to be a market where pricing is more difficult to get at the moment than maybe some of the continental European markets.

[Cedar Ekblom, Analyst at Morgan Stanley]

A bit of perspective on the ability to actually push through price and grow your earnings in an environment where growth on volumes is a bit tepid.

[James Brotherton, CFO at Breedon]

I'll take the first part of that, Cedar, and Rob, if you take the second. What I would say is that the pricing in the first half in G.B. is all surcharges, I'm not expecting any real pricing in the G.B. market across all product sets in the course of 2026. Ultimately, you need certain precursors in order to secure pricing into a market, the first of those is, at the very least, a stable market. Doesn't necessarily have to be growing, doesn't necessarily have to be expanding, you have to have a stable market. When you're looking at a market with ready-mix volumes down 8% off what were already multigenerational lows, that presents a real challenge.

[James Brotherton, CFO at Breedon]

Any pricing that we see this year will be in the nature of surcharges, and as I touched on earlier, there's quite a lot of volatility around the background noise that attaches to that surcharge discussion.

[Rob Wood, CEO at Breedon]

In terms of cement and imports, they have been increasing. The MPA do track them. It tends to be in arrears, but I think the last statistic is it's of north of 30% is imports. That's also a factor of production capacity that's been put in place in the U.K. We're naturally short. I think the most important thing is to do with the U.K. CBAM. It's in place in Europe. The government have committed to it, and even only back two weeks, or I think it was on the 14th of July, they have reconfirmed their commitment to putting that in place in Parliament. We do need that. We do need a level playing field.

[Rob Wood, CEO at Breedon]

In the U.K., we've made a number of policy choices, which means that we, in terms of cost of carbon and the cost of electricity, without that CBAM, we don't have a level playing field. I don't want to be alarmist, but it's a foundation industry, and we need the level playing field. That's all we want. If we get that level playing field, I'm very positive about the long-term future of the cement business and our cement business. I think the only thing I can say, and we've got the Cement Market Data Order, but the comment we've made in our half year is that our performance in our cement business in G.B. was comparable to the first half of last year, and that leads you to your own conclusions. Are there any people on the lines at all that have got questions?

[Operator]

We currently have no questions, as a reminder, if you would like to ask a question, please press star followed by one on your telephone keypad. We'll pause for just a moment.

[Rob Wood, CEO at Breedon]

I'm paused.

[Operator]

It appears we have no questions. I'll hand back.

[Rob Wood, CEO at Breedon]

Thank you very much. Look, thank you very much, everyone. I know how busy you are this week, and next week I know is another busy week. I'd like to leave you with a couple of things. Firstly, I'm really impressed that you all stuck to two questions. I think that's the first time in as many years as I can remember that you've managed to do that, so something's improving. The other thing I'd like to say is that it was a solid H1. James and I and the board are really pleased with where we are, and we really do have a strong team. We've got significant mineral reserves. We've got invested production capacity, well-invested production capacity, and we are well-positioned to deliver long-term growth. Thank you very much

Participants

Analysts

• Rob Wood, CEO at Breedon
• James Brotherton, CFO at Breedon
• Rob Chantry, Analyst at Berenberg
• Aynsley Lammin, Analyst at Investec
• Clyde Lewis, Analyst at Peel Hunt
• Christian York, Analyst at Deutsche Bank
• Harry Dow, Analyst at Rothschild & Co
• Cedar Ekblom, Analyst at Morgan Stanley