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Hi Stebo, what changes are you referring to?
Londoner7, would need to check with my contact what all I can say, but the upshot of his comments were "20 or so lads being let go for the sake of making Breedon more investible and adding a few pence to the share price".
I live local to Whitemountain's head-office and I drove past it today and seen that they are changing the signs from "Whitemountain" to "Breedon", so there's definitely changes afoot.
Stebo, thanks for clarifying your comments.
Was chatting to my pal again last night. Whitemountain are shutting down their civil engineering side of the company to focus more on the higher profit and lower risk activities. Also dropping the Whitemountain name and starting to trade as Breedon, which to me suggests a focus more so on the materials side of the business.
My pal is led to believe that it’s following feedback from large potential investors in USA who see civil engineering contracting as high-risk. That would likely tie up with the new presence in USA, and potentially signal either a buy-out from a large American company, or maybe Breedon starting to look at acquisitions in USA and moving into a new territory. All just speculation though.
Thanks for you input, we are lucky to have such a super poster
Hi Stebo, thanks for your additional comments.
I knew Whitemountain are involved in airport runway surfacing and thought that might be the 'civil engineering' component, but looking again I see Whitemountain has a separate 'civil engineering' division from runway surfacing. They are currently inviting tenders on a project called 'Lambeg Sluice Gate',
I don't know what such a project might involve but it sounds very different from Breedon's standard business. The division will be a relatively small part of Breedon and perhaps a small part of the Ireland business too.
There are clearly two factors in play, aside from any US influence. One, the division may be taking up a disproportionate amount of management time. Two, the nature of contracts, say if they are largely fixed price in an inflationary environment would make them a higher risk than the more straightforward supply of materials as demand rather than contracts dictate. Breedon does pursue some contract business - they did this through 2018-19 in Scotland when other work was drying up - but their preference is for short term supply at a premium pricing point.
I remember a comment by the founder of Breedon, Peter Tom, who memorably said, "Breedon feeds off the crumbs from the big boys table". I thought it summed up their strategy very well.
I'm aware of many companies that have been hammered by a single bad contract, when the rest of the business has been performing well. As I say, I suspect the Whitemountain civil engineering business doesn't have the scale to have a big impact on Breedon overall, but if its a distraction, better to let a business focused on civil engineering handle the work.
On rebranding. This might be a 'flag' to the local market, that there has been a restructure, or refocus, of the business, but it might be unrelated. Breedon went through a similar exercise with 'Hope Cement'. They thought the Hope name was a significant Brand in the industry but the message coming across was that the Breedon name was better known, so they rebranded to 'Breedon Cement'.
While looking at Whitemountain I noticed a concrete mixer badged 'Whitemountain' with the Breedon logo alongside. I don't know the company that paints the Breedon wagons, but I'd guess business is good.
Thanks for your input.
There was a full rebrand when Breedon took them over and all the plant (and head office signage) that was previously marron / white / gold was painted the Breedon colours, but it was still Whitemountain written down the side.
Whitemountain did do full on civil engineering works right across the UK (eg https://www.youtube.com/watch?v=hToxwtgcxqk) but it does seem that Breedon always kept it under the radar and there's very little mention about it. Seem that they have now finally pulled the plug on it completely.
Definitely seems to have been a tough decision taken for the betterment of Breedon as a whole. Keeps the business simple and easy to understand without too many off-shoots away from the core business plan. My pal was definitly under the illusion that the decision was made due to "investability", and came following feedback. He mentioned to me about Civil Engineering Contracting being considered so high-risk that it was almost toxic to US investors.
Culling that department is possibly to pave the way for some major investment - will be interesting to see what comes down the tracks in the next couple of months, but I'm taking it as a buy-signal and loading up now when they're cheap!
Just to follow up on the below - https://www.linkedin.com/feed/update/urn:li:share:6926485413259837440/?midToken=AQERz7smiSztEA&midSig=0isH04xGNl1Gg1&trk=eml-email_network_conversations_01-hero-1-check_update_cta&trkEmail=eml-email_network_conversations_01-hero-1-check_update_cta-null-9x36dq%7El2qiojvc%7Ejd-null-neptune%2Ffeed%2Eupdate
Whitemountain, Lagan Asphalt and Lagan materials all now rebranded into Breedon Ireland. Will be interesting to see if the share-price reacts