LONDON: British building materials company Hanson PLC today reported a 28 percent rise in first-half profits but warned that this would be a tough act to repeat in the second half of 2005. Consequently, Hanson shares were down 1.38 percent at 572p in early trading today.
Hanson reported that the first- half profits for the current year stood at £172.3 million as compared to the £134.6 million at the same time last year. The net turnover for the group posted a 9.3 percent increase to £1.75 billion in the first six months of 2005 as against £1.59 billion posted at the same period in 2004. The main reason for this rise in profits despite a weak UK economy is the concurrent boom in the U.S. housing market, according to analysts.
Consequently the North American arm of Hanson accounted for 44 percent of the turnover and 53 percent of overall profit. Assessing the performance of the group in a research note, Morgan Stanley analyst Rhiannon Evans said, "Although the results from the first half are clearly excellent, driven by strong pricing growth almost across the board, the outlook statement for H2, 2005 is disappointing in our view."
However despite warning on the second half, Hanson said that it expected to beat the £230 million profit posted last year. Chief Executive Alan Murray said, "We would expect to increase our profits in the second half over the second half last year.
Remember the second half last year was a very strong half with good volumes and weather. Overall, Hanson expects to make further progress in the second half of 2005, albeit against a good performance and significant property profits in the second half of 2004."
Hanson's North American Building Products division performed exceptionally well with an increase in profit of 17.8 percent to £344.5 million as against an operating profit, which was 31 percent higher at £56.3 million.
Posted
on : Wed, 03 Aug 2005 17:55 GMT | Business News
By : Chris Rowe
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