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[August 2003]
Hanson Interim Results
Hanson PLC Chief Executive Alan Murray, commenting on half year results, said: "As indicated earlier in the year, first half profits are down on the prior year due to increased pension costs, US dollar weakness and weather related volume declines in our major aggregates market. Assuming normal weather patterns and no significant change in the /$ exchange rates, Hanson's second half performance is expected to be more resilient".
Profit before tax and exceptional items was 120.6 million (first half 2002: 145.1 million) on continuing turnover totalling 1.8184 billion (2002: 1.8427 billion). Adverse currency movements impacted the results and accounted for 8.1 million of the reduction in pre-tax profit. On a constant currency basis, turnover remained unchanged and profit before tax and exceptional items for the period declined by 12%.
Before goodwill amortisation of 28.2 million and net exceptional profit of 9.9 million, earnings per share were 16.1p. Basic earnings per share (post goodwill and exceptional items) were 13.5p.
Continuing trading profit (pre-exceptional/goodwill) declined by 13% to 194.2 million. Increased trading profit in Australia, the UK and continental Europe partially offset declines in the US businesses. Significant adverse factors in the period were higher pension costs, the exchange rate effect and volume declines of 6% to 9% in major aggregates markets. Despite these factors, Hanson's pricing discipline, focus on costs and cash flow generation has been maintained.
Capital expenditure has increased by 62.3% to 96.4 million, reflecting opportunities to continue improving productivity and efficiency. Hanson is investing in some major projects. These include a new steel pipe plant in Dallas which is close to completion and the proposed replant of two quarries to the north west of Dallas. In respect of recent capital projects, the Aldershot brick plant in Toronto is now producing an annual output of 150 million bricks.
Hanson said the financial position remained strong. Cash flow from operating activities was 217.6 million. Net debt at 30 June 2003 was 1.0734 billion, down from 1.1699 billion at 31 December 2002, with gearing falling to 39% from 44% and pre-exceptional EBITA interest cover remaining above 5 times.
ENDS