Blue Circle focuses on acquisitions as six-month profits slump by 18%
Rick Haythornthwaite, the chief executive, said that senior staff were studying up to 30 firms as possible acquisition targets, with a takeover budget of up to pounds 500m.
"We will be focused again," Mr Haythornthwaite said. "We've done now 18 deals over the past 30 months across five continents, so the myth that Blue Circle can't grow has been cast to the winds."
The declaration, which follows Blue Circle's pounds 253m sale of its bathroom division to American Standard in February, comes as the group strives to shed non-core operations.
Mr Haythornthwaite said talks to sell the heating-products division were progressing well and set for completion in the fourth quarter. No potential buyers were named for the deal, which analysts expect to raise about pounds 400m.
Blaming higher interest charges and poor returns from emerging-market operations, Britain's largest cement maker said pre-tax, pre-exceptional profits in the six months to June were pounds 110.4m, down 18 per cent
The figures were worse than City expectations, despite a warning from the group in June that conditions this year remained "challenging".
Blue Circle shares slipped 30p to 410.25p yesterday as analysts revised down full-year forecasts. Credit Lyonnais Securities' analyst Mike Foster said he had clipped his 1999 underlying profits call to pounds 297m from $313m. "You have got to be more and more patient in terms of current trading," Mr Foster said. "It is the same old story."
Operating profit from continuing operations rose to pounds 139.6m from pounds 136.2m, supported by a robust performance across North America. Profits from trading in the United States and Canada rose 15 per cent to pounds 356.8m.
Across Asia, which is still struggling from the after-effects of the economic crisis, the group reported losses of pounds 1.4m compared with a pounds 6.6m gain in the year-ago half.
In South America, operating profits fell to pounds 5.1m from pounds 19m as volumes slumped by more than a quarter.
In the UK, operating profits dipped to pounds 35.8m compared with pounds 37.5m in the year-ago half. Domestic volumes slipped by 3 per cent, although the impact was offset by cost reductions and price increases.
Net borrowings rose to pounds 893.9m from pounds 240.5m, pushing interest payments in the half to 30 June to pounds 27.9m from pounds 11.8m. Gearing rose to 53.2 per cent from 18.9 per cent.
Mr Haythornthwaite said Blue Circle's purchase of Greek cement-makers Heracles and Halkis would be closed before the end of the year.
"The due diligence process is finished. There's nothing alarming," Mr Haythornthwaite said.
Blue Circle said that it had booked an exceptional gain of pounds 78.6m from the spring sale of the bathroom division to American Standard.
Despite the fall in pre-tax gains, an interim dividend of 5.05p was declared, up 4.1 per cent from last year's 4.85p.
"Looking beyond this year, we are confident not only about delivering results from our recent acquisitions but also achieving improved performance across our entire asset base," Mr Haythornthwaite said.
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