Breedon Aggregates expects its takeover of Scottish assets from a rival during 2013 to deliver financial benefits before the end of this year.
Reporting a sharp rise in first half profits yesterday, the Derby-based building material firm said it was at last able to get on with integrating the acquired business folllowing the end of a long-running investigation by the Competition and Markets Authority (CMA).
In April, the UK’s new competition watchdog ordered Breedon to sell an asphalt plant in the Aberdeen area – at Craigenlow in Dunecht or Tom’s Forest at Kintore – and a ready-mix concrete plant near Peterhead.
The company also faces a price control for asphalt produced in the Inverness area.
CMA said the measures were needed to preserve competition and protect customer interests following an inquiry into Breedon’s acquisition of a package of assets from Aggregate Industries (AI) UK in April last year.
Breedon took over 11 aggregate quarries, four asphalt plants, nine ready-mix concrete sites and two concrete-block factories located at 18 sites in Grampian, Tayside, Highland and the Hebrides in a £34million deal.
Welcoming the end of the saga yesterday, Breedon said: “We have six months to comply with the findings.
“Pleasingly, we are now able to fully integrate the business, which has been operating as a commercially independent entity for the past year, and we expect to deliver synergy benefits in the second half of this year.”
Breedon reported underlying pre-tax profits up 77% at £9.4million during the first half of 2014, with revenue 25% ahead of a year earlier at £125.2million.
The group, which describes itself as the largest independent aggregates business in the UK, with more than 1,100 employees, said underlying demand for its products and services in Scotland was not as strong as in England.
But it added: “The north-east (Scotland) market remains very busy and we have a significant presence there following the AI acquisition last year.
“We have recently secured a contract to extend Stornoway harbour, with BAM Nuttall as main contractor.
“In addition, the £745million Aberdeen Western Peripheral Route has moved a step closer, with Connect Roads – a joint venture between Balfour Beatty, Galliford Try and Carillion – appointed preferred bidder in June. Work should start early in 2015.”
Breedon said the independence referendum continued to create uncertainty for businesses north of the border but the medium-term prospects for infrastructure investment and housing in Scotland were good, whatever the outcome.
It also said it had a number of acquisitions and internal investment opportunities under review, adding: “We would anticipate further business development activity in
the coming months.”