Bluechip: Hanson wins on aggregate
Sunday 14 September 1997
Of course, the reason for the ejection was its decision to split itself in four, so that the value of Hanson as of old in one sense still exists to shareholders.
The Energy Group, home to the old Hanson energy businesses, remains in the FT-SE and should stay there for many years to come.
While Hanson may be a shadow of its former self, could there be something left to provide the springboard for a comeback? The rump of the old Hanson houses the least glamorous of what was always a deliberately unglamorous collection of businesses. Slimmed down, Hanson has three arms: bricks, aggregates and cranes.
Of these, aggregates has the most potential while cranes, which could be worth up to pounds 400m, may well be sold off. Aggregates includes quarrying for gravel and the like, and supplying other raw materials to the construction and road industries.
Buried away in the report and accounts is a glimmer of the appeal that the company may yet boast. Hanson depreciates its assets in the ground - its quarries and gravel pits - at a far faster rate than its competitors. According to figures calculated by the stockbroker Charterhouse Tilney, this understates its UK profits by as much as pounds 20m a year. It also suggests that reserves of pounds 1.3bn are undervalued on the balance sheet. In addition, the stockbroker believes an pounds 800m liability in the balance sheet for environmental clean-ups will almost certainly be far less.
In the US, the aggregates business is set to reap the benefits of a heavy rationalisation programme, and Hanson can now claim a 4 per cent market share of construction aggregates, making it the third largest. The prospects in the UK also seem benign, given that construction is looking better than at any time since the late 1980s.
The company should also have learnt from the past to avoid expansion at the expense of real investment. A more disciplined approach may yet see Hanson Mark II reclaim a place in the blue chip ranks.
While overall rates of growth are likely to be modest, Hanson has the potential to build a successful future, concentrating on the industries it understands. At 306p, the shares trade on a modest p/e of 11 times current year earnings, and under 10 for 1998. With a good yield, and limited downside, the shares could well be a good bet for the long term.
- 1 Scientists create transparent mouse complete with see-through organs
- 2 Pope Francis issues top 10 tips for happiness
- 3 Disney heiress Abigail disowns her share of family profits in West Bank company
- 4 Gentle bear saves crow from drowning
- 5 Israel's propaganda machine is finally starting to misfire
Russell Brand accuses Sean Hannity of terrorism after aggressive Israel-Gaza debate
Pope Francis issues top 10 tips for happiness
Kenny Ireland dead: Benidorm actor dies aged 68
Justin Bieber posts Instagram photo of Orlando Bloom crying after Ibiza fight 'over Miranda Kerr'
Putin v Obama: Russian deputy prime minister mocks president with catty pictures on Twitter
The secret report that helps Israel hide facts
Land for gas: Merkel and Putin discussed secret deal could end Ukraine crisis
Woman and two children killed by mob in riots over 'blasphemous' Facebook post in Pakistan
Richard Dawkins tweets: 'Date rape is bad, stranger rape is worse'
Putin is 'thuggish, dishonest and reckless', says British ambassador to US
Boozy, ignorant, intolerant, but very polite – Britain as others see us
- < Previous
- Next >
iJobs Money & Business
£300 - £350 per day: Orgtel: Financial Analyst, Forecasting, Halifax, Banking,...
£500 per day: Orgtel: Business Architect - Banking - Bristol - £500 per day A...
£200 - £500 per day + competitive: Orgtel: I am currently working on a large p...
£18000 - £23000 per annum + Commission: SThree: Real Staffing are currently lo...