Breedon Group defies construction slowdown with record cash flow in 2025
Breedon Group has reported strong financial results despite a slowing construction market. The company's free cash flow hit a post-Covid record of £133 million in 2025, up 17% from the previous year. However, its CEO has warned that Labour's ambitious housebuilding targets remain out of reach.
Revenue for the group rose by 9% to £1.7 billion, though pre-tax profits dropped by 16% to £105 million. The latest figures come as demand for essential building materials like concrete and asphalt continues to decline.
The construction sector is facing a mix of challenges, according to Breedon Group's latest report. While the company described the economic backdrop as 'dynamic,' it also highlighted a 'subdued' market for building materials. A separate report from the Mineral Products Association confirmed this trend, showing a fall in demand for concrete, aggregates, and asphalt in 2025.
Labour's pledge to build 1.5 million homes by the next general election—expected in 2029—has been dismissed as unachievable by Rob Wood, Breedon's CEO. He argued that loosened planning rules have so far failed to speed up housebuilding. Forecasts suggest net additions to the UK's housing stock will actually drop to 220,000 in 2026-27, with no significant increase expected until 2030. Wood also raised concerns about wider economic threats. Global events, such as the conflict in Iran, could push up inflation and put construction jobs at risk. To support the industry, he urged the government to cut electricity costs and prioritise British cement in public projects. The UK's cement sector has made some progress in reducing CO₂ emissions since 2020, mainly through efficiency gains and alternative fuels. Yet it still trails behind EU leaders like Germany and the Netherlands, where carbon capture and low-carbon cement innovations have cut emissions by 15-20% by 2025. No direct comparison for the UK's performance is currently available.
Breedon Group's latest results show resilience in a tough market, but the outlook for UK construction remains uncertain. With demand for materials falling and housebuilding targets seen as unrealistic, the sector faces further pressure. Inflation risks and slower-than-expected progress in sustainable cement production add to the challenges ahead.
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