Materials firm in £187m US expansion amid UK construction slowdown

Breedon Group has taken a major step towards expanding its US operations after agreeing to buy Missouri-based Lionmark.

The Leicestershire-based construction materials business anticipates the $238million (£187million) takeover will more than double its US revenues.

Breedon’s US expansion efforts come as the the sector suffers the impact of a sharp slowdown in UK construction activity last year, with peers SIG and Ibstock each reporting a sharp fall in profitability on Wednesday.  

Andy Arnold, managing director of Breedon’s American arm, said the business was ‘extremely complementary’ to its operations and would help diversify its offering into supplying asphalt and other surfacing materials.

Breedon expects to accrue ‘immediate and attractive financial returns’ from the deal, whose completion is set to happen this Friday.

Rival building materials group SIG saw its underlying turnover slide by around £150million to £2.6billion last year, driven by sluggish sales in its UK interiors, French roofing, and Benelux segments.

Combined with lower gross margins, its reported pre-tax losses climbed by 40 per cent to £44.8million.

The Sheffield-based group warned that market conditions would likely remain soft in 2025, with any possible trade rebound likely only in the second half of the period.

SIG shares rose 3.7 per cent to 12.3p on Wednesday morning, although their value has still shrunk by about 59 per cent over the past year.

Meanwhile, brickmaker Ibstock reported its adjusted earnings before nasties fell by 26 per cent to £79million in 2024 following a ‘significant’ drop in sales volumes.

The company’s overall turnover declined by £40million to £366million due to weaker trade, especially in the first half, and modestly lower average transaction prices in its clay division.

While Ibstock’s concrete business achieved a slight sales growth, its like-for-like revenues were 7 per cent down amid lower rail infrastructure and newbuild housing activity.

However, the FTSE 250 firm expects improved market volumes this year, having seen trading in the early weeks of 2025 surpass the comparable period last year.

Joe Hudson, its chief executive, said the firm is ‘well-positioned for a market recovery’, adding ‘the fundamental drivers of demand in our markets remain firmly in place’.

He said: ‘We see a significant opportunity for a new era in housebuilding in the UK, and with the investments we have made and our market leadership positions, the group remains well placed to support and benefit from this over the medium term.’ 

Britain’s property sector is showing some healthy signs of recovery, with the number of residential transactions on a seasonally adjusted basis in January up 14 per cent year-on-year at 95,110, according to HMRC.

Mortgage rates have fallen to more reasonable levels following the Bank of England’s three base rate cuts since last August. The current interest rate stands at 4.5 per cent.

Ibstock Group shares jumped 7.6 per cent in early trading to 164p, while Breedon Group shares climbed 13.6 per cent to 485.5p, making them the FTSE 250’s top riser.