Ennstone unveils record interim turnover of £130m

Ennstone has delivered a strong trading performance in the first half of 2008, reported chief executive Vaughan McLeod.

Turnover in the six months to 30 June 2008 was £130m (figure in comparable period last year: £110m).

Ennstone’s pre-tax profit ran to £5.7m which was much stronger than the previous figure – a loss of £72,000, the result of Ennstone suffering a £5.3m exceptional due to a combination of reorganisation, redundancy and impairment charges.

The producer of aggregates, asphalt and ready-mixed concrete has already announced that it faces an issue over the repayment of existing debts and needs to come up with the sum of £11m by December. There is the expectation that some assets will be sold.

Capital expenditure is set to drop back to essential replacement of equipment only, a move that should cut expenditure by £10m from the level previously planned.

Also, other than spending £3.5m on further reserves of sand and gravel in Poland, there will be no additional money to spend on acquisitions in the short to medium term.

Cash generated in the six-month period was £9m while capital expenditure ran to £30m as Ennstone made further steps with its strategy of investing in downstream, value-added product capacity.

Ennstone’s operating review of its businesses was as follows.

UK Aggregates

Excellent results – Ennstone increased the sales volumes of both asphalt and ready-mixed concrete. Pricing remained strong and most of the cost increases were passed on – the main hikes were in the cost of energy and raw materials, particularly bitumen.

The upgrade in the English business is nearing completion. Asphalt is being delivered to East Anglian users from plants at Norwich and Ellough.

UK Concrete Products

The re-structured business performed positively, the focus now being the works at Doseley and Cadeby.

The main focus of the product range is in drainage materials, fencing, and Network Rail products.

US Aggregates

Continued to suffer from the impact of the deteriorating US economy. Difficult first half with volumes 20% down against 2007 which was itself already poor. The position worsened further in the second quarter.

Poland Aggregates

Record turnover and profit. The division “continues to be an exciting prospect for the future of the group”.

Bear Scotland

The term maintenance joint venture, of which Ennstone is a member, has progressed to become one of the best in the UK highway term maintenance business, said McLeod.