Source: Sharecast
Breedon said that with little help from the markets in 2025, Breedon focused on "controlling what it could control" - operational efficiency. Breedon cut costs, "tweaked and improved" working practices and RBS said there was potential for "more of both" in FY26.
The Canadian bank also noted that guidance for the full year was held and "warmly received" by the market, but also stated that "for all of us the crystal ball for 2026 is somewhat hazy and cloudy".
However, RBC said Breedon's performance in FY25 demonstrates that it can "perform in challenging times", but volume growth was what was required to "make the shares really sing".
"We update our model to reflect FY25 actuals and updated FY26 guidance. Our FY26 EBITDA of £283.3m is in line with current company consensus of £283.5m, falling 0.9% vs our prior estimates reflecting a lower GB pricing assumption ('flat' expected in FY26 by management) along with our slightly higher cost inflation assumption, partially offset by continued GB cost measures (33% of £20m expected in FY26)," said RBC.
"Higher depreciation (FY26 guide of £120m vs RBCe prior of £110m) and net finance costs (FY26 guide of £35m vs £30m RBCe prior) mean that our FY26 EBIT and PBT estimates fall 7% and 11% respectively. Accordingly, our price target (derived from a combination of FY26-27 P/E and EV/EBITDA multiples) falls 5% from 525p to 500p."
Reporting by Iain Gilbert at Sharecast.com