ONE of Scotland's largest quarrying and aggregates businesses has signalled it will post profits "somewhat ahead" of market expectations mainly because of improvements in the construction sector.

Breedon Aggregates, which has 29 quarries plus dozens of concrete and asphalt plants in Scotland, said its trading performance has been "very encouraging". It expects to beat targets as long as weather conditions do not turn nasty before the end of December.

The company, which also has extensive operations in England, said: "Group sales revenue in the second half of the year has been stronger than in the first half and the full-year [earnings before interest, tax, depreciation and amortisation] margin is expected to be ahead of the prior year, driven by continuing improvement in the underlying business and the benefit of acquisitions."

AIM-listed Breedon boosted its Scottish operations in April with a £34 million acquisition of 11 quarries, seven ready-mix concrete plants, four asphalt plants, and two concrete block factories from Aggregate Industries in the Grampian, Tayside and Fife, Highlands and Hebrides regions.

The move added around 206 million tonnes of mineral reserves which doubled Breedon's holding and gave it more than 70 years worth of materials. It also snapped up Marshalls' quarries in England for around £19m in April. In its trading update yesterday, Breedon said: "Both the English and Scottish businesses continued to make good progress this year, helped by a general improvement in construction demand and a continued focus on management of costs, prudent investment and careful selection of work."

The company indicated there were better signs from most areas of the construction industry with the pick-up in housebuilding just one factor behind the improvement in financial performance. It added it was optimistic about the current trading year and "confident of making further progress in 2014".

The Scottish deal to buy the Aggregate Industries assets is still being probed by competition authorities, although a decision is unlikely until next year.

Breedon, which employs around 600 people in Scotland, confirmed the investigation is ongoing but reiterated its belief that there are only "minor issues in one product area" which could lead to a disposal of a "limited number of individual assets".

Breedon said finance director Ian Peters is stepping down to pursue other interests and will be replaced by Rob Wood, from Drax Group, in March next year.

The company also owns a significant minority stake in trunk road maintenance firm BEAR Scotland and a majority stake in Alba Traffic Management.

Shares in Breedon closed up 1p, or 3%, at 35.75p.