Hanson reports drop in profits as takeover is approved

Hanson has recorded a drop in pre-tax profit just a day after its shareholders voted to accept HeidelbergCement’s takeover offer.

For the six months to June pre-tax profit dropped 6% to £181.8m. The slump was blamed on residential demand weakness in North America and adverse weather conditions impacting volumes in the UK, North America and Australia.

However, in the UK both the aggregates and building products divisions recorded improved results.

Driven by increased demand and a higher contribution from Civil and Marine operating profit in aggregates grew 11% to £66.2m, despite a reduction in property profits and the continued drop in asphalt volumes. The company reported that the ready mix concrete market continues to experience growth in spite of cement supply shortages. Prices have now risen by 5% to recover the rising cost of aggregates and cement.

The building products division saw operating profit increase from £10.4m to £25.6m, a jump of 146%. Brick volumes contributed to the spike, as did demand for aircrete blocks and precast products.

Commenting on the results Alan Murray, chief executive, said: “Hanson has delivered solid results against the background of challenging conditions. Our strong selling price discipline has been maintained and we continue to invest in the future growth of the business through acquisitions and capital expenditure.”

“Yesterday, we were pleased to announce that shareholders approved, both at the court meeting and the Extraordinary General Meeting, the Scheme of Arrangement regarding the acquisition of Hanson by HeidelbergCement for £11 per ordinary share.

“As anticipated, we therefore expect the acquisition to complete at the end of August, assuming all necessary approvals are received and conditions are satisfied or waived.”