TIDMBREE
RNS Number : 6315H
Breedon Group PLC
26 March 2020
News release
26 March 2020
BREEDON GROUP PLC
Response to COVID-19 and AGM update
Breedon Group plc, a leading construction materials group in
Great Britain and Ireland, issues the following update on the steps
being taken to mitigate the impact of COVID-19.
Colleagues and customers
In light of recent Government measures, and to ensure the safety
and wellbeing of our colleagues, subcontractors, customers and
communities, we have decided temporarily to suspend production at
our UK sites, with the exception of our Hope cement plant and those
of our operations which serve critical supply needs. During the
course of this week we have begun gradually winding down the
relevant sites, whilst ensuring that they are in a condition to be
quickly and safely brought back online at the appropriate time.
Our operations in the Republic of Ireland, including our cement
plant at Kinnegad, continue to operate pending further guidance
from the Irish Government.
We welcome the introduction of the UK Government's Coronavirus
Job Retention Scheme, which should ensure that our UK colleagues
continue to receive a proportion of their pay during a period of
furlough.
Trading and immediate priorities
The Group's trading performance in 2020 was until this week
broadly in line with our expectations. However, following the more
stringent measures introduced by the UK Government on 23 March,
there has been an immediate and significant reduction in demand for
our products which we expect to continue until restrictions on
movement are relaxed.
The Group is well invested, which has enabled us to immediately
restrict capital expenditure solely to committed and critical
projects without compromising the longer-term performance of our
operations. In addition, we have halted all discretionary
expenditure and continue to apply robust discipline to our
management of working capital. We will make full use of any
government support, including tax reliefs and other forms of
financial aid, as they become available.
Financing
The Group has a strong balance sheet and significant liquidity
headroom. As at 25 March the Group has GBP335 million of drawn debt
on our facility, cash of GBP60 million and an undrawn committed
facility of GBP220 million. The covenants attached to our facility,
agreed before the adoption of IFRS 16, require that leverage (net
debt as a multiple of EBITDA) should not generally exceed 3.0 times
and that interest cover (EBITDA as a multiple of interest) should
be not less than 3.5 times. As at 31 December, our leverage for
covenant purposes was 1.4 times and our interest cover was 20
times. The facility does not mature until April 2022.
Completion of our acquisition of certain of CEMEX's UK assets
remains subject to satisfactory conditions being met, including a
TUPE consultation and IT migration. In light of COVID-19,
completion may take longer than originally anticipated. We continue
to believe that these well-located, resource-backed assets will
enable us over time to create significant additional value for
shareholders.
We have conducted stress testing of the Group's liquidity
requirements under different scenarios, assuming the completion of
the CEMEX acquisition, and believe that headroom will remain
adequate for our needs under those scenarios, particularly in light
of the robust actions we are taking to manage our cost base and
preserve cash.
We have strong relationships with our group of banks, with whom
we have been in regular dialogue since the onset of COVID-19 and
who are being highly supportive.
Annual General Meeting (AGM)
In light of the restrictions relating to COVID-19, the Board has
agreed to defer the 2020 AGM to a later date. We are monitoring the
ongoing situation, and will notify shareholders via our website (
www.breedongroup.com ) and the regulatory news services as soon as
the revised AGM arrangements are confirmed.
Outlook
Given the current economic uncertainty and the as yet
unquantifiable longer-term impact of COVID-19 on our trading
environment, we are unable to provide accurate market guidance for
the current year. However, looking further ahead, we have a
fundamentally robust and diversified business with traditionally
strong cashflow characteristics, and are well positioned to prosper
in the long term . The pending addition of a high-quality portfolio
of assets from CEMEX in the UK will further strengthen our
position.
We will provide further updates in due course as and when
appropriate.
The information contained within this announcement is deemed by
the Group to constitute inside information under the Market Abuse
Regulations (EU) No. 596/2014.
- ends -
For further information:
Breedon Group plc 01332 694010
Pat Ward, Group Chief Executive
Rob Wood, Group Finance Director
Stephen Jacobs, Group Head of Communications 07831 764592
Cenkos Securities plc 020 7397 8900
Max Hartley
Numis Securities (joint broker) 020 7260 1000
Heraclis Economides
Ben Stoop
Teneo (Public relations adviser to Breedon) 020 7420 3180
Matt Denham/Rachel Miller
NOTES TO EDITORS:
Breedon Group plc is a leading vertically-integrated
construction materials group in Great 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 employs
nearly 3,000 people and has nearly 900 million tonnes of mineral
reserves and resources. Its strategy is to continue growing
organically and through the acquisition of businesses in the
heavyside construction materials market.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
UPDKKPBQFBKDPNB
(END) Dow Jones Newswires
March 26, 2020 03:00 ET (07:00 GMT)
Breedon (LSE:BREE)
Historical Stock Chart
From Apr 2024 to May 2024
Breedon (LSE:BREE)
Historical Stock Chart
From May 2023 to May 2024