Conference Call Participants

Josef Schachter – Schachter Energy Research Services Inc.
Tim Monachello – ATB Cormark Capital Markets Inc., Research Division

Presentation

Breedon Group CEO Rob Wood warns Labour’s 1.5m homes target will fail due to lack of government support for construction industry, cement supply threats and falling housing stock additions

Labour’s ambitious housebuilding pledge was destined to fail from the moment it was unveiled, according to the head of a prominent construction materials company.

Rob Wood, chief executive of materials specialist Breedon Group, told City AM that the government’s commitment to deliver 1.5m homes before the next general election is doomed because Labour has failed to adequately support its construction sector.

Mr Wood is urging ministers to safeguard the UK’s domestic cement supply, which he argues faces significant threats from inconsistent carbon regulations, elevated energy costs, climbing labour expenses and a growing influx of imported cement.

He argued that Labour’s failure to properly value the broader construction industry represents a key factor in why it will fall short of its housing ambitions.

Mr Wood said: “The day they announced it, it was already impossible. I can’t believe they still talk about it.

“They haven’t got that long left, and if you look at the current run rates they’re not going to get anywhere near it.”

According to the Office for Budget Responsibility’s most recent projections, net additions to Britain’s housing stock are set to decline from an average of 260,000 annually to a low of 220,000 in 2026-27.

Labour’s relaxation of planning regulations has yet to “meaningfully materialise” in accelerated housebuilding rates, the watchdog noted.

Whilst the next election – Labour’s deadline for meeting its housing target – is anticipated in 2029, the OBR indicated that construction activity will not see a substantial upturn until 2030.

Mr Wood is urging the government to tackle the cost of electricity in the UK and champion domestically produced cement in public procurement, to counter the “serious risks” confronting the cement industry.

“If there isn’t a robust and healthy domestic cement industry, everything will have to be imported, […] and ultimately it will all depend on the availability of products from overseas,” the boss of Derbyshire-based Breedon said.

Demand for essential construction materials such as concrete (-9.9 per cent), aggregates (-1.6 per cent) and asphalt (-1.1 per cent) declined for a fourth successive year in 2025, according to a Mineral Products Association (MPA) report.

Mr Wood argued the inflationary risks stemming from the Iran conflict – and the strain it places on mortgage rates and consumer confidence – demonstrate that the government should be able to depend on its domestic construction sector.

The costs confronting British construction firms threaten their capacity to deliver Labour’s industrial strategy and could jeopardise jobs, he warned.

Earlier this month, the head of a leading construction industry body revealed inheritance tax pressures on material and machinery suppliers, which are frequently family-run, are placing companies at risk.

Productivity levels are a crucial indicator of the UK’s economic health and the government celebrated improvements to these forecasts at last year’s Budget, but Breedon Group cautioned crumbling infrastructure is hindering productivity growth. Mr Wood said: “We don’t have enough schools, we don’t have enough hospitals, our road network is in a terrible state of repair, and the government keeps talking about productivity. “.

“If we don’t have the distribution networks, if we don’t have rail or road networks that are operating efficiently, no wonder productivity can’t improve.”

The FTSE 250 company unveiled its annual results for the year ending December 2025 on Wednesday, revealing a nine per cent revenue increase to £1.7bn.

However, pre-tax profit dipped by 16 per cent to £105m, whilst Breedon posted a record post-pandemic free cash flow generation of £133m, a rise of 17 per cent from 2024.

The firm’s results statement highlighted a “subdued” construction sector, with a “dynamic” economic environment overshadowing indications that growth might be on the upswing.

The Ministry for Housing, Communities and Local Government was approached for comment by City AM.

This article was written by

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RICS has published its latest residential market survey for Wales

The number of new homes coming onto the housing market in Wales rose during February, according to the latest Royal Institution of Chartered Surveyors (RICS). However, its latest residential market survey shows chartered surveyors in Wales remain cautious about the short-term outlook.

A net balance of 15% of respondents reported that new instructions to sell were up through the month of February, indicating that more sellers were putting their houses on the market. However, whilst supply is stronger, demand seems to have dipped. A net balance of -37% of Welsh surveyors reported that new buyer enquiries fell through, which is further into negative territory than the -21% that was seen the month previous.

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Subdued demand is leading to fewer sales. A net balance of -36% of respondents in Wales reported that sales declined in the most recent survey, which is the lowest this balance has been since July 2025. And surveyors are cautious on the sales outlook with a net balance of -6% of respondents in Wales anticipating sales will fall over the next three months.

When it comes to pricing, a net balance of 14% of Welsh respondents reported that house prices have risen over the past three months, which is up from the 5% seen in the January survey. However, there is a hesitation when it comes to the short-term outlook, with a net balance of -6% of surveyors in Wales expecting prices to fall over the next three months.

Commenting on the sales market, Anthony Filice of Kelvin Francis in Cardiff, said: “Increasing levels of new instructions and serious interest is bringing about early sales, several at the full price or near. There are no effects of the Middle East conflict noted yet, although it is anticipated that interest rates are unlikely to continue their downward trend.”

Commenting on the UK picture, RICS head of market Research and analytics, Tarrant Parsons, said: “February’s survey highlights renewed volatility in the market. While activity indicators at the start of the year suggested a tentative improvement, the deterioration in the geopolitical backdrop has clearly weighed on confidence.

“The recent rise in oil and energy prices has also increased the likelihood that mortgage rates will remain higher for longer. As a result, near-term expectations have softened. Although the twelve-month outlook remains positive overall, maintaining that trajectory will depend on the recent spike in inflationary pressures easing in the months ahead.”

Former Starbucks CEO Howard Schultz and his wife announced they’ve moved to Florida for their “retirement phase,” leaving Washington state after nearly half a century.

Schultz shared the news in a post on LinkedIn, recounting how he, his wife Sheri, and their golden retriever Jonas, made the move from New York City to Seattle 44 years ago.

“We were starting a new life,” Shultz wrote, recalling how Sheri would be their primary income earner as he started a new job “at a place called Starbucks” in September 1982.

Schultz would later become the coffee company’s CEO, serving in the position from 1986 to 2000, from 2008 to 2017, and as its interim CEO from 2022 to 2023.

STARBUCKS TO OPEN NEW OFFICE IN NASHVILLE, MOVE SOME JOBS FROM SEATTLE

Howard Schultz, CEO of Starbucks, speaks during the company’s annual shareholders meeting in Seattle, Washington March 19, 2014. (David Ryder / Reuters Photos)

“The spirit of continuing forward has long underpinned our approach to life—in business, in philanthropy and most importantly, as a family,” Schultz wrote. “For those of you who know us well, we have entered the ‘retirement’ phase of our lives. (A term we are both just getting used to.)”

Former Starbucks CEO Howard Schultz testifies about the company’s labor and union practices during a Senate Committee on Health, Education, Labor and Pensions hearing on Capitol Hill in Washington, D.C., March 29, 2023.  (SAUL LOEB/AFP via Getty Images)

Schultz added that he and Sheri moved to Miami, where they were enjoying the sunshine and being close to their kids on the East Coast as they raised their own families.

“We will be forever grateful for the memories made in Seattle and the relationships built along the way,” Schultz wrote. “To the family, friends and partners who made Seattle our home for so many years, thank you.”

STARBUCKS’ TURNAROUND PLAN SHOWS PROMISE IN US AS SALES GROWTH RETURNS FOR FIRST TIME IN 2 YEARS

Schultz has an estimated net worth of $3.5 billion, according to Forbes.

The news of Schultz’s move to Florida comes a week after Starbucks said it will be opening a new corporate office in Nashville.

People pass by a Starbucks coffee shop in Manhattan, New York, on Jan. 15, 2025.  (Mostafa Bassim/Anadolu via Getty Images)

Both announcements come as Washington state has been working to pass what has been dubbed the “millionaires tax,” which would impose a 9.9% income tax on households earning more than $1 million annually.

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The Washington State House of Representatives passed the controversial bill in a 51-46 vote. The bill must now be confirmed by the State Senate before Democratic Gov. Bob Ferguson can sign it into law.

Small Business Administrator (SBA) Kelly Loeffler unveiled a sweeping fraud crackdown on Wednesday, announcing an audit of a decades-old $50 billion program she said has “never been looked at” and barring 112,000 borrowers from future aid over COVID-era loan fraud.

“There are dozens of programs across this government that need to be reviewed,” Loeffler said on “Mornings with Maria.”

“I found a program that we had in our agency about 50 years old, [that has] never been looked at, $50 billion, so what we’re doing is auditing each participant in the program, and we’re looking back at COVID-era loans.”

GOP SENATORS LAUNCH TASK FORCE TO CRACK DOWN ON FRAUD TIED TO MINNESOTA SCANDAL

U.S. Administrator of the Small Business Administration Kelly Loeffler speaks ahead of U.S. Vice President JD Vance at Pointe Precision on Feb. 26 in Plover, Wis. (Matt Rourke-Pool/Getty Images / Getty Images)

The SBA chief said 112,000 borrowers in California are banned from ever getting SBA assistance again for allegedly defrauding COVID-era loan programs and expressed gratitude to Vice President JD Vance for leading the charge in the fight against fraud.

President Donald Trump tapped Vance to spearhead the administration’s “war on fraud” during his State of the Union address last month, a task the vice president accepted with a promise to root out “stolen” taxpayer money on a systematic level.

PHILADELPHIA MEN REPEATEDLY TRAVELED TO MINNEAPOLIS TO CARRY OUT $3.5M HOUSING FRAUD SCHEME: DOJ

Vice President JD Vance delivers remarks at Hatch Stamping on Sept. 17, 2025 in Howell, Mich. President Trump tapped Vance to spearhead the administration’s “war on fraud.” (Bill Pugliano/Getty Images / Getty Images)

“The American people want accountability. They want to make sure their hard-earned tax dollars are not going to fraudsters,” Loeffler said.

“People that have come here and built businesses on defrauding the government… we’re going to see results on that and make sure that we change it for good. These changes need to be durable and sustainable for the American taxpayer.”

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Loeffler has already paused some SBA loans to Minnesota amid a widespread fraud investigation in the state.

She vowed to go “state by state” to weed out offenders, telling the New York Post that the push is part of a greater effort to “contribute meaningfully” to Vance’s fraud task force.

Peter Grom
UBS Investment Bank, Research Division

All right. Good morning, everyone. Welcome to the UBS Global Consumer and Retail Conference here in New York City. My name is Peter Grom, I’m the U.S. Consumer Staples Analyst here at UBS, and we are very excited to have joining us Rahul Goyal, President and Chief Executive Officer; and Tracey Joubert, Chief Financial Officer from Molson Beverage or Molson Coors Beverage Company this morning. So clearly, beverage alcohol has been under pressure from the top and bottom line perspective over the last several years. And several weeks ago, both Rahul and Tracey outlined the Horizon 2030 strategy as the company looks to navigate this challenging backdrop and return to more consistent growth.

In terms of format for today, I have a series of questions that I plan to run through with Rahul and Tracey during the 45 minutes we have here. But before we start, I’m required to read a legal disclaimer. As a research analyst, I’m required to provide certain disclosures relating to the nature of my own relationship and that of UBS with any company on which I express a view on this call today. These disclosures are available at www.ubs.com disclosures. Alternatively, please reach out to me. I can provide them to you after this webcast.

So with that, why don’t we get started? Rahul, Tracey, thank you so much for joining us.

Rahul Goyal
President, CEO and Director

Thanks for having us, Peter.