Shares in Breedon Group Plc (LSE:BREE) crumbled over 8% after the construction materials group said full-year results were likely to be at the low end of expectations, as like-for-like revenue and underlying profits both fell 3% in the first half of the year.
The declines reflected softer market conditions in Britain and weather-related disruption in the US.
Total revenue rose 7% to £815.9 million, supported by the acquisition of Lionmark in the US in March.
Underlying EBITDA declined 3% to £115 million, with margins down 130bps to 14.1%, while statutory profit before tax dropped 25% to £34.9 million.
CEO Rob Wood said: “Breedon has had a challenging first half to the financial year; however I am pleased at how our teams have responded to those challenges by renewing their focus on self-help and customer service while ensuring we maintain our commercial discipline.”
The company expects full-year results to come in at the low end of current market forecasts. Nevertheless, it said long-term demand remains supported by major infrastructure commitments across the UK, Ireland and the US.
The company raised its interim dividend by 6% to 4.75p per share. Net debt increased to £648.1 million, and covenant leverage rose to 2.2x, driven by the Lionmark acquisition and seasonal working capital use. Breedon said leverage is expected to fall in the second half.
Breedon continues to advance its M&A pipeline and sees further growth potential in its US business, particularly from infrastructure exposure and strong order backlogs.
The shares fell 8.5% to 355p.