Breedon Profits Plunge as Lockdown Takes TollNeil Hardie
Leading construction materials group Breedon revealed that annual profits had plunged by nearly 50% as the impact of Coronavirus hit it hard.
The nationwide company, which has its Scottish HQ in Angus, suffered after the March lockdown effectively brought the UK and Irish construction industries to a halt for the better part of two months.
Breedon has now reported that its pre-tax profits for 2020 dived to £48.1 million, compared to £94.6 million for 2019.
However, annual revenues were almost static at £928.7 million compared to £929.6 million previously.
Chief executive Pat Ward said: “The pandemic brought unprecedented pressures to bear on the group in 2020 which demanded an exceptional response from everyone in our business, and I would like to say thank you to all our stakeholders for their support during a difficult year.
“Most especially, I would like to thank our colleagues who have worked tirelessly and enabled us to recover strongly in the second half to deliver a very creditable outcome for the year.
“Although we remain mindful of the ongoing impact of Covid-19, with the worst of the pandemic now hopefully behind us and some welcome clarity on Brexit, I believe the prospects for Breedon and our industry are increasingly positive.
“With robust commitments from the UK and Irish governments to infrastructure investment and continuing long-term demand for housing, forecasters are expecting this year and next to see steady growth in demand for our products in both countries.”
Breedon employs around 3,500 people at around 350 sites in Britain and Ireland.
It operates two cement plants and an extensive network of quarries, asphalt plants and ready-mixed concrete plants, together with slate production, concrete and clay products manufacturing, contract surfacing and highway-maintenance operations.
The group’s strategy is to continue growing through organic improvement and the acquisition of businesses in the heavyside construction materials market.
At the start of last year Breedon announced a £178 million deal with Cemex.
It planned to take over a variety of Cemex assets, including 49 ready-mix plants, 28 aggregate quarries four depots, one cement terminal, 14 asphalt plants and four concrete-products operations.
Neartly 20 of the facilities were in Scotland, where Breedon already had a strong presence.
However the Cemex acquisition did face a hurdle raised by the Competition and Markets Authority.
The CMA found that the deal gave rise to competition concerns in relation to the supply of ready-mixed concrete, non-specialist aggregates or asphalt in 15 local markets across the UK.
It added that the Breedon-Cemex merger could have made it easier for cement suppliers in the east of Scotland to align their behaviour, without necessarily entering into any express agreement or direct communication, in a way that limited the rivalry between them.
Breedon subsequently announced a £12.2 million deal with Tillicoultry Quarries to address the CMA’s competitive concerns.
It also allowed the Fife firm to expand its operations on both sides of the border.
The 14 sites which went to Tillicoultry included two sand and gravel quarries in Collessie and Loanleven, plus a cement terminal in Dundee. These three Scottish sites employed around a dozen people.