Hanson looks to UK and Australian businesses to balance US downturn

Hanson is looking to its UK and Australian businesses to offer protection from a trading downturn in the United States.

Announcing its preliminary results today (Thursday), the building materials group said it feared the weaker markets which led to a 9% fall in profits at its American arm in 2002 would continue this year.

Lower state spending on infrastructure projects has driven the decline in the region, but Hanson believes the weakness can still be offset elsewhere.

However, it has been encouraged by the prospects for its UK operation, which is expected to benefit from the government's increased public spending budget.

Chief Executive Alan Murray said: "A focus on cost control, operational efficiency and price improvement helped the group hold its pre-tax, pre-exceptional profit at last year's level, despite a 4.3% decline in total revenue and adverse currency movements. ADVERTISEMENT   "Looking ahead, market conditions in North America are likely to remain difficult, but the UK and Australia should continue to provide some protection against short-term earnings pressure."

Chairman Christopher Collins added: "Our strength is our consistent ability to generate strong cash flow. This enables us to reduce debt, invest in the business and raise the dividend."

Collins also revealed that a focus on costs and operational efficiency and price increases had enabled the company to keep underlying profits for the year to 31 December at £350.3m, broadly unchanged on 2001.