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[November 2002]
Hanson Trading Update
Hanson has issued a trading update, on this occasion a little earlier than its usual December statement.Shortfalls in US aggregates volumes in the third quarter were marginally better than those experienced in the first half. Most major markets showed weakness, although San Diego continued to perform well.
Pipe & Products had a difficult quarter, largely due to delays in contract letting affecting pressure pipe demand in Texas. Brick & Tile third quarter volumes, however, remained underpinned by continuing resilience in residential housing, particularly in Canada and in Texas.
Demand in the UK remained at the low levels seen in early summer, with the anticipated post-June upturn not materialising and the Aggregates Levy affecting demand for certain products. Third quarter aggregates volumes were 9% below the 2001 level. Despite this, year to date trading profit for the UK Aggregates division remained ahead of the prior year.
UK brick volumes fell by 3% in the third quarter. However, recent demand was said to have been more encouraging with pricing remaining good and operational cost control initiatives having a beneficial impact.
In Hanson Building Materials Europe's other principal market - Spain - trading conditions were good.
Hanson Australia's performance remained strong and trading profit was anticipated to be significantly ahead of 2001.
In Hanson Pacific, Hong Kong remained affected by weaker underlying demand and increased competition, while Malaysia's performance was affected by the government's decision to expel temporarily many immigrant construction workers.
Hanson said that operations continued to generate strong cash flows. Assuming no further acquisitions or disposals, year-end debt was forecast to be approximately £1.2 billion. This represents a reduction of around £230 million on the prior year, despite year to date acquisition spend of around £130 million (2001 total = £57.8 million).
Hanson said that assuming normal weather patterns and no significant further US dollar weakness - which is already forecast to have a net negative impact of approximately £9 million - it expected to report 2002 pre-tax, pre-exceptional profit close to the median of current analyst forecasts of around £345 million. In 2001, this figure was £351 million.
ENDS