Upping its share price target to 92p from 86p, the house broker said that ‘clean’ earnings for 2020 were 5% ahead of its expectations but it was the 64% jump in underlying profit [EBITDA] that caught the eye.
Acquisitions helped, but management has extended its record of improving the returns of acquired businesses said Liberum, hence the broker has raised EBITDA forecasts by 10% across the forecast period though it said that reflects only the recent Belgian transactions.
“With these acquisitions now in place, the group has reached critical mass with four platforms and strong enough cash flows to self-fund acquisitions and other opportunities.”
Earlier, the construction materials and aggregates group had reported underlying revenues in the year to end-December 2020 rose by 76% to £124.2mln with underlying profit [EBITDA] up by 64% to £23.9mln. Pre-tax profit increased to £7.1mln from £2.2mln.
Max Vermorken, chief executive, added: “Looking forward, we continue to seek ways to invest, improve, integrate and innovate, and in the first quarter of 2021 we launched our cement-free concrete building block – Greenbloc.
“We also recently entered into an agreement with LafargeHolcim which will see an expansion of our aggregates operations in Belgium and, subsequent to that, we acquired two large-scale concrete suppliers in the Limburg area of Belgium.”