Breedon Group - COVID-19 update – UK operations now largely shut

Davy Research
/Read Important Disclosures

Breedon’s COVID-19 update is broadly similar to sector peers, with UK operations now largely shut. The group has sensibly moved to trim costs and conserve cash. It has significant liquidity headroom, which will support it through this temporary shutdown. The likely delay of the Cemex deal until Q3 is a helpful unintended consequence of the crisis. While the group remains firmly committed to the deal, the delay provides further breathing room in a difficult trading environment. We remain overweight the stock, seeing significant upside potential from UK infrastructure spending once trading resumes.