Breedon Group PLC on Wednesday raised its annual dividend by nearly 30% and announced a $300 million acquisition, as it reported higher revenue in 2023 and mostly steady profit.

The Derby, England-based construction materials firm said pretax profit edged down to £134.4 million last year from £135.8 million in 2022. Revenue rose 6.5% to £1.49 billion from £1.40 billion, but rising costs meant that the operating earnings margin narrowed to 9.8% from 10.6%.

Earnings before interest and tax declined to £145.7 million from £148.0 million, beating market expectations, Breedon said.

The company declared a final dividend of 9.5 pence, up 36% from 7.0p a year before. This increased the full-year payout by 29% to 13.5p from 10.5p.

Looking ahead, Breedon said it expects to continue to pay out 40% of underlying basic earnings per share. Since starting to pay dividends in 2021, Breedon has paid out a total of £110 million to shareholders, it noted.

Breedon also deployed its cash toward acquisitions. On Wednesday, it said it has purchased BMC Enterprises Inc for an enterprise value of $300 million.

St Louis, Missouri-based BMC is a supplier of ready-mixed concrete, aggregates and building products. It had adjusted earnings of $35.5 million in financial year 2023 on revenue of $178.9 million.

Breedon will pay $285 million in cash, plus $15 million in Breedon shares for BMC, with completion of the deal expected by Thursday.

‘The acquisition of BMC represents a compelling opportunity for Breedon to launch our third platform in the USA,’ Breedon Chief Executive Officer Rob Wood said. ‘BMC has an excellent performance track record over a sustained period and is positioned in an attractive market for future growth.’

Breedon shares were up 5.8% at 401.89 pence in London midday Wednesday.

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