Breedon Group (LON:BREE) Announces Earnings Results

Key Points

• Breedon reported a solid first half: Revenue increased 5% and like-for-like revenue rose about 3%, while underlying EBITDA was broadly flat; the company also increased its interim dividend.
• Performance varied by region: Ireland and the U.S. posted strong growth, but ongoing residential weakness in Great Britain drove an 8% decline in ready-mix concrete volumes, with management expecting difficult market conditions to persist.
• Cash generation and leverage remain manageable: First-half free cash outflow improved to approximately £15 million from £25 million, and full-year net debt is expected near £650 million, or roughly two times leverage. Analysts maintain a “Moderate Buy” consensus, though some firms recently lowered price targets.

Breedon Group (LON:BREE - Get Free Report) announced its quarterly earnings results on Wednesday. The company reported GBX 9.40 earnings per share for the quarter, Digital Look Earnings reports. Breedon Group had a net margin of 4.89% and a return on equity of 7.14%.

Here are the key takeaways from Breedon Group's conference call:

• 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.
• 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%.
• 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.
• 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.
• 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.

Breedon Group Stock Performance

Shares of LON:BREE traded down GBX 9.80 on Wednesday, reaching GBX 315.80. The company's stock had a trading volume of 789,266 shares, compared to its average volume of 7,289,363. Breedon Group has a 52-week low of GBX 271.40 and a 52-week high of GBX 383.80. The stock has a market capitalization of £1.10 billion, a P/E ratio of 13.05, a PEG ratio of 1.56 and a beta of 1.06. The stock's 50-day moving average is GBX 297.94 and its two-hundred day moving average is GBX 316.81. The company has a debt-to-equity ratio of 53.71, a current ratio of 1.35 and a quick ratio of 1.12.

Analyst Ratings Changes

Several research firms have recently weighed in on BREE. Stifel Nicolaus reduced their target price on Breedon Group from GBX 430 to GBX 415 and set a "buy" rating for the company in a report on Tuesday, March 31st. Citigroup dropped their price target on Breedon Group from GBX 340 to GBX 310 and set a "neutral" rating on the stock in a research note on Wednesday, June 24th. Finally, Berenberg Bank reaffirmed a "buy" rating and set a GBX 465 price target on shares of Breedon Group in a research report on Wednesday, June 10th. Four investment analysts have rated the stock with a Buy rating and one has given a Hold rating to the company. According to MarketBeat, Breedon Group presently has a consensus rating of "Moderate Buy" and a consensus price target of GBX 443.

Insider Activity

In related news, insider Clive Watson purchased 11,271 shares of the stock in a transaction that occurred on Monday, May 11th. The shares were purchased at an average price of GBX 301 per share, with a total value of £33,925.71. Insiders bought a total of 16,411 shares of company stock worth $4,937,100 over the last 90 days. Company insiders own 23.27% of the company's stock.

About Breedon Group

Breedon Group plc, 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.

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