Jul 6 2006
Hanson PLC, one of the world’s leading heavy building materials companies, has issued a trading statement in advance of the 2 August 2006 announcement of its interim results for the six months ending 30 June 2006.
Hanson said it expected to report an increase in operating profit of approximately 10% for the first half of 2006 compared to the first half of 2005 (H1 2005: £197.3 million).
Alan Murray, Chief Executive, said: “The first half performance of both North American divisions has been excellent, and our UK Aggregates, Australian and Continental European operations have performed well. These have more than offset difficult market conditions for our UK Building Products division. We have completed over £500 million of acquisition investment so far this year and earnings from these transactions are in line with our expectations. Overall, we look forward to further progress in the second half of this year.”
On the clay and other building products side, Hanson Building Products North America is anticipated to deliver an increase in first half operating profit of a similar amount to that of Hanson Aggregates North America. It is expected that much of this increase will be due to good demand for pipe and pre-cast products, particularly in Florida. Brick volumes should be in line with the first half of last year. The division has continued its growth and cost saving initiatives and secured selling price increases across all main product lines.
For Hanson Building Products UK, the severe reduction in the brick market has continued, led by weak demand in the repair, maintenance and improvement sector. First half brick volumes are expected to be around 20% below the first six months of last year. The earnings impact of this volume reduction, and of higher energy costs, has been mitigated by selling price increases, aggressive cost saving initiatives, production cutbacks and closures. Nevertheless, operating profit for this division for the first six months of 2006, which includes the cost of restructuring and closures, is expected to be around half of that achieved in the first six months of last year (£21.5 million).
The first half operating profit for Hanson Australia & Asia Pacific is expected to be similar to the strong first six months of 2005. Hanson Continental Europe is expected to deliver a first half operating profit slightly ahead of the first half of 2005.
Looking ahead, amongst many other observations, Hanson noted that in the UK whilst there are some signs that the brick market may have reached the bottom of the cycle, no significant improvement in demand is anticipated in the second half of the year. Comments on other operating divisions and overseas operations can be viewed on the company website.