The last remnant of Lord Hanson's once-sprawling conglomerate said that a buoyant US market would lead to a jump in profits despite some weakness in the UK. The chief executive Andrew Dougal said that second-half earnings growth "will exceed the 15 per cent gain achieved in the first half".
The announcement triggered a round of forecast upgrades, with City analysts moving their1998 profit estimates from pounds 241m to around pounds 248m. However, the positive mood did not filter through to the share price. The stock closed down 4p to 461p as investors booked in profits after a recent positive run which took Hanson into the FTSE-100.
Industry experts said that Hanson is reaping the benefits of its expansion in the US. The company has spent more than $300m on bolt-on acquisitions of American building materials producers during the last year and 50 per cent of its profits now come from the US.
Cornerstone, the company's US aggregates subsidiary, was behind yesterday's bullish statement. Robust demand, driven by the strength of the US economy, enabled Cornerstone to push up prices and boost its margins, the company said.
City analysts are optimistic about the division's near-term future. Over the next six years, Hanson's US business will be among the key suppliers to a $216bn roadbuilding programme, recently approved by the US Congress.
However, other investors are worried about Hanson's business in the UK, where construction has been hit by the economic downturn. The company said it wanted to reduce its exposure to the UK in 1999 through another aggressive round of bolt-on buys in the US.Reuse content